Pembina Pipeline Corporation is one of the leading companies that operate in the Canadian petroleum, natural gas, and oil sectors. Presently, this organization has around 1260 employees while its profits have been increasing steadily. The leaders rely on various business strategies and initiatives to address its challenges and pursue its goals. The four generic strategies offer powerful insights and concepts that can help companies realize their maximum potential. The leaders at Pembina Pipeline always rely on the focus generic strategy to remain competitive in the industry and meet the demands of its customers.
Defining of the Cost Focus Strategy
Cost focus is a improved version of the cost leadership generic strategy and it combines two elements. Specifically, it borrows some of the attributes of the focus strategy and combines them with the cost approach. This new framework guides leaders in a particular company to identify a niche market and improve the promoted initiatives to become a leader in service or product delivery. The company can go further to develop a unique edge that helps attract more customers and encourage them to continue using the delivered products. The company will offer its products at a competitive or average price while maximizing market share. The involved players will embrace the right mechanisms to lower operational costs (Pembina 2021). Such measures will reduce operational expenses without affecting the quality and speed of productions. Corporations that pursue such a model find it easier to overcome competition and achieve the targeted business aims.
Pembina’s Generic Strategy: Key Discussions and Recommendations
Of the four Porter’s generic strategies, Pembina has identified the cost focus because it resonates with its business objectives and aims. Such an approach integrates broad and narrow aspects to support the delivery of timely results. The focus concept allows this organization to identify the right niche market in Western Canada. It has succeeded in identifying the right regions and areas to meet the demands of its customers (Pembina 2021). Relying on the recorded experiences and resources, the company has become an expert in providing natural gas and oil to different clients in the selected region. The strategy has continued to make it possible for this organization to meet the demands of more stakeholders.
Additionally, the concept of cost is integrated in the wider generic strategy to deliver competitive edge. The presence of pipelines and the option of leasing such facilities make it possible for this organization to reduce operational costs. Through such a model, Pembina has designed superior model for meeting the demands recorded in its niche market (Canadian Energy Research Institute 2017). It relies on experience and current facilities to deliver oil and natural gas at a reduced cost. The professionals involved consider the best initiatives and approaches to minimize maintenance costs. Such an initiative has made it possible for the company to deliver quality products to its customers. The organization also considers the level of competition in the niche market and implements superior approaches to mitigate possible gaps.
The adoption and implementation of this generic strategy has helped Pembina achieve a number of goals. First, it has become one of the reputable players and service providers in the region. This outcome is possible since most of the customers have their needs met in a timely manner. Second, most of the partners and clients identify it as a trusted brand or business name in the wider sector (University of Oxford 2019). Third, the use of the generic strategy has made this company a trusted name. With proper improvements and adjustments in accordance with the trends recorded in the sector, chances are high that the company will eventually record additional positive goals and become more competitive (Canadian Energy Research Institute 2017). Fourth, the established strategy has resulted in additional partnerships with pipeline companies to improve service delivery and meet the demands of more potential clients.
Through the power of the cost focus generic strategy, the leaders are Pembina find it easier to identify the recorded challenges and address them in a timely manner. More partners find the business model sustainable and capable of delivering positive results. From this analysis, it would be agreeable that this company adopted such a generic business strategy to overcome the challenge of competition, standout in its competitive market, and focus on the best approaches to reduce the costs of doing business (Canadian Energy Research Institute 2017). Consequently, Pembina has managed to record positive gains while at the same time leaving most of its gas and oil subscribers satisfied.
Unfortunately, the adoption of this strategy has triggered several problems that might affect overall performance. For instance, the company has been unable to differentiate its products and offerings in an effort to meet the demands of more customers. This gap explains why and how most of the direct competitors might take the lead in the future and make Pembina’s business strategy less competitive. Another identifiable challenge is that the adopted strategy does not allow the company to take the concept of research and development seriously in an effort to be prepared for some of the possible challenges in the future (Pembina 2021). Despite such concerns, this company remains profitable and can make the relevant adjustments to continue recording positive gains.
The best recommendation for Pembina would be to consider a global strategy since all players in the industry appear to follow the same model. It can do so by capitalizing on the concept of cost leadership since it will help lower operational costs while at the same time delivering the right products to the customers (University of Oxford 2019). This approach can make it possible for Pembina to improve its operations and venture into new markets in different parts of North America. The concept of R&D will support the entire process and eventually deliver the outlined organizational goals.
Pembina Pipeline Corporation is a successful company operating in the natural gas and oil sectors. Its success is attributable to the leaders’ adoption of the cost focus generic strategy. Such a framework borrows a lot from the two approaches to come up with a single business model that resonates with the demands of both business partners and customers. This strategy has helped address most of the recorded challenges while at the same time maximize operational efficiency. Unfortunately, the approach has resulted in a number of gaps and weaknesses that might affect Pembina Corporation’s future profitability. The company’s top leadership can consider a global strategy since the industry has uniform procedures and practice standards. A renewed focus on R&D will help mitigate some of the recorded gaps and eventually guide the company to achieve its anticipated or outlined business goals.
Canadian Energy Research Institute. 2017. “Economic Impacts of Canadian Oil and Gas Supply in Canada and the US (2017-2027).” Ceri.ca.
Pembina. 2021. “Pembina Pipeline Corporation.” Pempina.com. Web.
University of Oxford. 2019. The Canadian Oilsands and Strategic Approaches to Profitability. Toronto: The Oxford Institute for Energy Studies.