In the United States, bigger is usually seen as better. In recent years, however, the trend has transitioned to a less is more mentality…at least where the oil and gas industry is concerned. Oil specialization is rapidly growing in popularity for a wide variety of reasons. As a company, you now have the option to specialize in one area as opposed to covering all aspects of a particular process. The displacement of the generalist approach has led to a revolution in the industry, which comes with its own set of pros and cons.
Pros
Mastery of an Area: There is a time-worn saying that a jack-of-all-trades is a master of none. One of the most critical aspects of specialization is the ability to become a leading expert in one aspect, establishing yourself as the “go-to” person or company for one particular subject. Attaining an above average level of excellence could potentially attract more business and opportunities for success. It’s an automatic competitive edge.
Efficiency: Specializing in any given industry provides companies with a unique opportunity for exclusive focus. There are fewer distractions and crossovers, thus making the work more efficient. If you don’t have to divide your attention among many different processes or procedures, there is less room for error.
Reduction in Wasted Capital: From an investor standpoint, there is more room for failure if there are too many components or moving parts for a company to keep track of. Investors are more likely to respect your best-in-class reputation if they are 100% certain you have a firm handle on your company purpose and process. They rest easier knowing that they’ve mitigated the unexpected cost of mistakes that often comes with a global approach.
Easy to Brand and Sell to Clients: Keep it simple. When establishing yourself on the market, it can be confusing to clients and investors alike if you market yourself as an active participant or producer of many different products. By specializing, you can easily communicate your purpose and services without causing confusion.
Higher Pay: With specialization comes higher pay. Companies and clients are usually willing to pay larger sums for contracts when the workers possess a desirable set of specialized skills. Those possessing those skills are considered experts and are often paid accordingly.
Cons
Limits Opportunities Going Forward: Companies that specialize in one aspect of an industry might unknowingly limit themselves in the future. For example, if a company specializes in offshore oil drilling and the supply runs low or becomes defunct, they may find it difficult to locate another available drilling area or transition to a more sustainable industry division without contingency income and processes to support them. In addition, advancements in technology could force some industry specialties to become redundant as time passes.
More Competition: If your specialization market is highly saturated, it may be hard to get a foot in the door. Other companies have already established themselves a stellar reputation, which makes it difficult for any new businesses to succeed.
The Pros and Cons of Oil Specialization
