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Marathon Oil, with operations throughout the United States and Canada, will soon be two companies. The move has been in the works for nearly two years, but low oil and gas prices kept the company from making it until now. Marathon Petroleum will be responsible for refining operations. Marathon Oil will focus exploration and production.

QUESTIONS:

  1. Marathon is an established company operating in a mature industry. Should it be concerned about competitive advantage? What source of competitive advantage does the move to split into two companies represent? Can it become a sustainable competitive advantage?
  2. The business split represents what level of strategy?
  3. From the standpoint of SWOT analysis, why is now a good time for Marathon to make the split?
  4. What type of restructuring strategy does this move represent?

SOURCE: Associated Press, “Marathon Oil Will Spin Off Refining and Marketing,” USA Today (Retrievable online at http://www.usatoday.com/money/industries/energy/2011-01-13-marathon-oil-spinoff_N.htm?csp=obinsite)

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