Businessmodel of Marathon Oil

Customer Segments

Marathon has a niche market business model, with a specialized customer segment. The company targets its offerings at industrial firms that need petroleum and natural gas.

Value Proposition

Marathon offers three primary value propositions: innovation, risk reduction, and brand/status.

The company places a strong emphasis on innovation. It operates a division called Technology that develops solutions to maximize its assets and explores technologies that can facilitate new resource capture. Specific areas of focus are Information Management, Seismic Imaging, Petrophysics, Reservoir Management, Drilling and Completions, Production Optimization, and Oil Sands.

The company reduces risk by maintaining high safety and security standards. It aims to engage in responsible energy production by minimizing environmental risks. Specific steps taken including utilizing natural resources in an efficient manner and reducing potential effects on air, water, land, and wildlife. It also operates the Management System, a program through which it articulates its devotion to environmental stewardship and establishes performances objectives and action plans.

The company has established a strong brand due to its success. It has a worldwide presence, maintaining operations in four regions: Africa, Middle East, Europe, and North America.

Channels

Marathon’s main channel is its direct sales team. The company promotes its offering through its website, social media pages, and participation in trade shows and conferences.

Customer Relationships

Marathon’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. The company’s website includes informational videos. That said, there is a personal assistance component in the form of phone and e-mail support.

Key Activities

Marathon’s business model entails exploring for, producing, and distributing petroleum and natural gas products.

Key Partners

Marathon’s key partners are the suppliers who provide materials and equipment the company needs as part of the exploration and production process, as well as contractors.

Key Resources

Marathon’s main resources are its reserves of proved crude oil and condensate, NGLs, natural gas and synthetic crude oil. The company also places a strong emphasis on its intellectual property, and holds a number of issued and pending U.S. and foreign patents.

Cost Structure

Marathon has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is production expenses. Other major cost drivers are in the areas of exploration, sales/marketing, and administration.

Revenue Streams

Marathon has one revenue stream: revenues it generates from the sales of its petroleum and natural gas products to customers. Sales typically occur through the signing of long-term contracts.