Businessmodel of Enterprise Products

Customer Segments

Enterprise Products has a niche market business model, with a specialized customer segment. The company targets its services at producers and consumers of natural gas, NGLs, crude oil, petrochemicals, and refined products.

Value Proposition

Enterprise Products offers two primary value propositions: accessibility and brand/status.

The company creates accessibility by providing a wide variety of options. Its operations include pipelines, natural gas processing, liquid and gas storage, NGL fractionation, import and export terminals, and marine transportation assets. It has partly amassed such a diverse portfolio through numerous acquisitions of competitors since its founding.

The company has established a strong brand due to its success. It is one of the largest publicly traded energy partnerships in the United States, with over $49 billion in assets. Its assets include 49,000 miles of pipelines; 250 million barrels of storage capacity for NGLs, crude oil, refined products and petrochemicals; and 14 billion cubic feet of natural gas storage capacity. Lastly, since its first initial public offering in 1998, it has completed more than $35 billion of organic growth projects and $26 billion of major acquisitions.

Channels

Enterprise Products main channel is its business development team. The company promotes its offering through its website, social media pages, and participation in conferences.

Customer Relationships

Enterprise Products’ customer relationship is primarily of a personal assistance nature. The company provides its energy services for customers while having limited interaction with them.

Key Activities

Enterprise Products’ business model entails discovering, producing, and delivering energy products to its customers.

Key Partners

Enterprise Products’ key partners are the suppliers that provide it with the raw materials it needs to manage its operations. It also maintains joint venture partnerships with a number of leading oil, natural gas, and petrochemical companies, including Chevron, BP, ConocoPhillips, ExxonMobil, Dow Chemical, Marathon, Spectra Energy, and Shell.

Key Resources

Enterprise Products’ main resources are its physical resources, which include its 25 natural gas processing plants and 22 NGL and propylene fractionators. It also maintains important human resources in the form of its employees that engage in energy discovery and production.

Cost Structure

Enterprise Products has a cost-driven structure, aiming to minimize expenses through significant automation. Its biggest cost driver is cost of sales, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

Enterprise Products has one revenue stream: revenues it generates from the sale of its energy services to customers. Sales typically occur through the formation of long-term contracts.