External/Industry Analysis: Workforce Housing in the Oil and Gas Industry

Topics: Petroleum, Natural gas, Oil well Pages: 7 (2103 words) Published: July 26, 2013
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External/Industry Analysis: Workforce Housing in the Oil and Gas Industry Steve McKeon Westminster College

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Introduction The external analysis is designed to help companies identify specific trends and events that may have an impact on their business. This concept is not difficult to understand, but many companies have fallen victim to their own complacency. This is why the external analysis is so important and must be evaluated on a regular basis. When performing an external analysis it is best to focus in on a target industry to ensure that only relevant information is analyzed. The industry we are analyzing for this purpose is the workforce housing sector of the oil and gas industry. There has been an oil boom in the United States’ lower 48. New drilling techniques, namely horizontal drilling, have paved the way for domestic oil companies to exploit hard to reach homeland oil reserves. Due to a controversial technology known as “fracking,” oil and gas drilling has seen an explosion in production, and with higher production comes a need for labor. These laborers need a place to live and currently, housing is in high demand. A major concern that most cities and counties have is how much to build up for a permanent and temporary workforce. This analysis will address the housing needs of the new labor force and identify opportunities and threats within the market.

Competitive Advantage Rhino Supply SDV LLC (Rhino) is a Service Disable Veteran Owned Small Business (SDVOSB) focusing on providing supplies to many different industries. Being an SDVOSB is one competitive advantage of Rhino. Currently, the United States Federal Government has a Presidential mandate to award 3% of the Federal Budget to SDVOSBs. Rhino is poised to take advantage of the socio economic goals of the Federal Government by teaming with wholesale

INDUSTRY ANALYSIS companies looking to increase their product sales to the government. As an SDVOSB, Rhino

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can capture large volume sales to the government. In this current analysis, Rhino is looking to provide mobile housing to the government and also to the oil and gas industry. This analysis only focuses on the oil and gas workforce industry.

SLEPT Analysis The SLEPT (Social, Legal, Economic, Political, and Technological) analysis is used to identify significant outside issues that organizations must address. When applying this process to an entire industry it can be confusing. There are many issues that are specific to a certain company without impacting the rest of the industry. . Opportunities Social Transient population provides a major opportunity in this market. When an oil boom strikes an area there is an influx of workers looking for jobs. There will be an immediate need to house these workers. But after production begins to decline, “Local populations will likely also decline as production decreases, as workers in the oil and gas industries are gradually displaced and move on to other opportunities” (Shafer, 2012). Cities and counties do not want to invest in a permanent workforce knowing they will be leaving when production slows. They will look to support clean, aesthetically pleasing, temporary housing in preparing for inevitable population reduction. Restrictive rules within man camps are another opportunity for non dormitory accommodations. The following example is of one resident residing in dorm like man camps. “The many restrictions grate on Randall Ervin, 38, of Beaverton, Oregon. ''Here I am 40 years

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old and it's like I got a mom, you know what I mean?'' said Mr. Ervin, who works as an oil field pump operator” (Carrns, 2012, p. 14). Grown men may not enjoy living in dormitory style quarters with restrictive rules like boot removal policies and visitation hours. Legal Having man camps in and around the city has recently become a drain on the local population and services. Within the last...

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Abaffy, Luke. (2012). Oil ignites micro boom. Engineering News-Record, 269(1), 12. Retrieved from http://enr.construction.com Carrns, Ann. (2012, March 24). Leaving families behind for life in a 'man camp '. The International Herald Tribune, p. 14. Retrieved from http://global.nytimes.com/?iht Galbraith, Kate. (2012, July 13). In oil boom, a housing shortage and other issues. The New York Times, p. 17A. Retrieved from http://www.nytimes.com Shafer, Christi. (2012, June 4). Oil, gas rich Eagle Ford shale creates economic boom in Texas. Natural Gas Week, Retrieved from http://www.energyintel.com Sulzberger, A.G. (2011, November 25). Oil rigs bring camps of men to the prairie. The New York Times, p. 12. Retrieved from http://www.nytimes.com Warnica, R. (2012). Boom, busts and trouble. Maclean 's, 32. Retrieved from http://www2.macleans.ca
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