Malcolm Gladwell’s book David and Goliath offers interesting perspective on how those possessing seemingly little in the way of resources can successfully take on more established players using their size and ingenuity to their advantage.
The promise of the little guy is certainly germane to the oil and gas industry. If a company or individual has an idea they believe has merit, there’s little to keep them from pursuing their idea in the oilfield. And if their products or services are good enough, customers will eventually beat a path to their door.
Take for example Derrick Equipment, maker of solids control equipment for drilling. The privately-owned company has regularly been rated at or near the top in EnergyPoint’s oilfield products customer satisfaction surveys. The company has achieved this distinction despite being a fraction of the size of most of its main competitors., which include National Oilwell Varco (NOV) and Schlumberger.
Newpark Drilling Fluids also regularly rises above the fray, even as it competes with the likes of Schlumberger, Halliburton and Baker Hughes. Our research indicates discreet products and services like drilling fluids are often better received as stand-alone offerings. It’s when they are bundled with unrelated products and services that the troubles begin.
There’s also Core Laboratories. The company has rated first with respondents in our surveys several times over the years, driven by strong ratings in formation and well evaluation services (namely core and fluids analysis). When we first published Core Lab’s strong customer satisfaction scores in our 2004 report, the company had a market capitalization of less than $500 million. Today, it’s many times that.
So what is it about these companies that allows them to compete so successfully against larger players?
One advantage is their single-mindedness. While most have grown over the years, they have generally done so while sticking to their knitting. They’ve stayed focused on the offerings for which they are known, have high levels of resident expertise, and consistently add value. They’ve earned customer loyalty and market reputation along the way.
Successful small companies also remain more nimble. It’s not uncommon for larger companies to eschew promising initiatives because the business to be gained will not move the needle. As a result, they miss out on ground-floor opportunities to grow their business. In the process, they provide the space and fuel for smaller players to gain a place in the market.
The oil and gas industry is immense, and customers continue to demand that suppliers invest. As a result, its largest suppliers garner most of the attention. But the industry also benefits from smaller players that patiently pursue their own initiatives, angles and innovation, providing levels of personalization and focus many larger suppliers can’t match.
So, the next time you think a supplier is “too small” to satisfy your needs, think about what you might be missing. It might just be a better overall experience.