Understanding the petrochemical cycle: Part 2
- SRI International, Menlo Park, CA (United States)
The manager of a petrochemical enterprise, to survive the competitive 1990s, must have a good understanding of the industry's cyclicality, and a good grasp of coping alternatives. To select the best strategies and tactics calls for a familiarity with such concepts as the hockey-stick profile for profitability and the experience curve for cost reductions at both ends of the supply curve. The manager must carefully weigh advantages of build-and-scrap policies and differentiation vs. diversification and recognize the pitfalls associated with the prisoner's dilemma. With these elements well understood, the manager is in an improved position to cope with the industry's boom-and-bust characteristics. The paper discusses practicalities, the prisoner's dilemma in game theory, individual company actions, leveraging cyclicability, differentiation and diversification/integration, improvement of competitiveness, and structure as part of the problem.
- OSTI ID:
- 7024361
- Journal Information:
- Hydrocarbon Processing; (United States), Vol. 73:4; ISSN 0018-8190
- Country of Publication:
- United States
- Language:
- English
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