SOEs must identify and understand local market forces to realize greater
value on investments
CALGARY, July 17, 2013 /CNW/ - State-owned enterprises (SOEs) need a
well-planned and executed market-entry strategy to benefit from
opportunities in Canada's oil and gas industry, EY said today as it
launched a new report, Playing by the local rules: state-owned enterprise success in Canada's
oil and gas industry.
"Over the last year we've seen a number of transactions take place that
affirm foreign players' — especially Asian investors' — growing
interest in Canada," says Barry Munro, EY's Canadian Oil and Gas
leader. "But getting the green light to do business in Canada is just
the beginning. The biggest barrier to success is not having a deep
knowledge and understanding of the ongoing market forces in our
Whether a company is entering Canada in a complete-control capacity or
pursuing non-operating transactions or joint ventures, success in the
Canadian oil and gas market takes a lot more than compliance-based
approach to minimum standards.
"SOEs must demonstrate that their interests are aligned with the
interests of the Canadian economy and society as a whole," says Lance
Mortlock, Partner in EY's Oil and Gas practice. "That's where a
market-entry strategy comes into play. Thinking carefully about
important issues and opportunities in the Canadian market can improve a company's brand and
reputation, fuel collaboration and impact their ability to attract top
The six building blocks of an effective market-entry strategy include:
Canadian workforce development
Government and IOC relationships
Strategic business objectives
Community and social responsibility
Effective and transparent communication
Canadian supplier use and development
"There's always work to be done when entering a new market," adds Munro.
"SOEs should have strong foundational competitive advantages, including
capital, international operations, cost-effective value chains and
technical capabilities — all critical components to meet growth and
profitability targets in Canada. But realizing real value demands a
strong market-entry strategy."
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SOURCE: EY (Ernst & Young)
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