Eni is Italy’s largest and most profitable company. The case traces Eni’s 50-year history from its founding as a state-owned oil and gas company, through its privatization and restructuring during the 1990s, to its growth and success under its present CEO, Vittorio Mincato. The case surveys the state of Eni during the early part of 2003 and considers some of the challenges facing Mr. Mincato as he seeks to sustain and continue Eni’s outstanding financial and operating performance under a strategy of “disciplined growth” and “core business focus.” The case deals with the analysis of corporate strategy for a large corporation. (By 2003, Eni was among the top-50 global corporations whether measured by sales or market capitalization.) Eni is vertically integrated, international, and diversified across several industrial sectors. The case requires students to identify and analyze the rationale behind Eni’s current corporate strategy and make recommendations for how Eni should allocate its resources across its different vertical levels, business sectors, and geographical areas of operation in the future. A key challenge of the case is that Eni is currently performing exceptionally well. Hence, there is a tendency among many students to recommend “Keep up the good work, Mr. Mincato” without looking deeply at the company and its business. In fact, Eni faces a number of key challenges, which must be addressed if Eni’s recent success is to be sustained. 
This case is used to develop students’ skills in the following:
Identifying, articulating, and analyzing a company’s corporate strategy.
Analyzing the fit between a company’s corporate strategy and (a) its external environment and (b) its resources and capabilities

Combining quantitative, qualitative, and historical information to build a profile of a company’s resources and capabilities.
Examining the structure, systems, and culture that an organization needs to support its corporate strategy.
What is Eni’s corporate strategy?
Evaluate Eni’s corporate strategy. How well aligned is Eni’s strategy with (a) the characteristics and requirements of its industry environment and (b) Eni’s resources and capabilities?

Looking ahead over Eni’s next four-year planning period (2004–7), what are the main issues that face the company? How should Eni allocate its resources across its different businesses and between different geographical areas? In particular: a) Should Eni divest its chemicals business? What about its engineering, construction, and oilfield services subsidiaries? b) Should Eni seek to establish itself as a major supplier of electrical power? Should it invest in renewable energy sources (e.g. wind power)? c) What should Eni’s international strategy be – especially in relation to its downstream businesses (Refining and Marketing; Gas and Power)?

What organizational changes should Mincato pioneer, especially with regard to organizational structure, management systems, and corporate culture? 
Note: Answer the Critical Thinking Assignment mainly based on the Module 9 Case . Chapter 5 ” Analyzing Resources and Capabilities” of the textbook is also relevant to this case. Optionally, feel free to support your reasoning with  additional valid academic sources using SEU e-library.
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ENI case
Performance Measurement E Corporate Strategy – Modulo Ii (Corporate Strategy) /
Performance Measurement And Corporate Strategy – Module Ii (Corporate Strategy)
(Università Commerciale Luigi Bocconi)
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Case 16 Eni SpA: The
Corporate Strategy
of an International
Energy Major
On May 13, 2015, Claudio Descalzi opened the annual meeting of shareholders’ of
Eni SpA. It had been little more than a year since the 59-year-old petroleum executive had been appointed as CEO of Italy’s largest company. Yet, during that time
a series of events had shaken Eni and raised troubling questions over its strategic
direction.
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CASE 16 ENI SPA: THE CORPORATE STRATEGY OF AN INTERNATIONAL ENERGY MAJOR
FIGURE 4
617
The price of Brent crude, 1987–2015 ($ per barrel)
140
120
100
80
60
40
20
1990
1995
2000
2005
2010
2015
the costs of finding and developing oil and gas fields were also rising, causing
upstream profitability to decline during 2011–2013.
Between June 2014 and January 2015, the price of Brent crude declined from
$115 to $47 per barrel (Figure 4). The principal cause was a remarkable expansion in US oil production: as a result of horizontal drilling and hydraulic fracturing,
increased output of US “tight” oil would result in the US displacing Saudi Arabia
as the world’s biggest oil producer during 2015 (Table 2). In response to falling oil
prices, the Saudis abandoned their traditional role as “swing producer” and refrained
from cutting production to support prices.
The result was a transformation in the finances of the oil majors. During the first
quarter of 2015, the pretax profits of the majors declined by between 32 and 63%.
To contain rising upstream costs, the oil and gas companies had outsourced more
and more of their E&P activities. Drilling, seismic surveys, rig design, platform construction, and oilfield maintenance were increasingly undertaken by oilfield service
companies. As these companies developed their expertise and their proprietary
technologies, and grew through mergers and acquisitions, so sector leaders such as
Schlumberger, Baker Hughes, Halliburton, and Diamond Offshore Drilling emerged
as powerful players within the petroleum industry.
Refining and Marketing The main refined products in order of importance
were: gasoline, diesel fuel, aviation fuel, heating oil, liquefied petroleum gas (LPG),
and petrochemical feedstock (e.g., naphtha). Historically, downstream was less profitable than upstream: in their refining and marketing businesses, the majors typically
earned rates of return that barely covered their costs of capital. As a result, all the
majors had divested refining and marketing assets to concentrate increasingly on
their upstream businesses (Table 3).
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by Ruth
Case16Eni SpAThe Corporate Strategy of an International
Energy Major.indd
617Holden (ruth.holden@beyondcampus.com)
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618 CASES TO ACCOMPANY CONTEMPORARY STRATEGY ANALYSIS
TABLE 2 Oil and gas production and reserves by country
Oil production
(mn barrels/day)
Saudi Arabia
Russia
US
China
Canada
Iran
UAE
Kuwait
Iraq
Mexico
Venezuela
Norway
Nigeria
Brazil
Qatar
Kazakhstan
Angola
Algeria
Gas production
(bn cubic meters)
2013
2007
1991
2013
2007
1991
Oil reserves
(bn barrels)
2013
11.5
10.8
10.0
4.2
3.9
3.6
3.6
3.1
3.1
2.9
2.6
2.1
1.8
2.1
2.0
1.8
1.8
1.6
10.4
10.0
6.9
3.7
3.3
4.4
2.9
2.6
2.1
3.5
2.6
2.6
2.4
1.8
1.3
1.5
1.7
2.0
8.8
9.3
9.1
2.8
2.0
3.5
2.6
0.2
0.3
3.1
2.5
1.9
1.9
0.8
0.5
0.5
0.2
1.4
103
605
688
117
155
167
56
16
1
57
28
109
36
21
159
19
—
79
76
607
546
69
184
112
49
13
1
46
29
90
28
14
63
15
—
83
35
600
510
15
105
26
24
1
n.a.
28
22
27
4
6
12
4
—
53
266
93
44
18
174
157
98
102
150
11
298
9
37
16
25
30
13
12
Gas reserves
(tn cubic meters)
2013
8.2
31.3
9.3
3.3
2.0
33.8
6.1
1.8
3.6
0.3
5.6
2.0
5.1
0.5
24.7
1.5
—
4.5
Notes:
mn = million; bn = billion; tn = trillion.
n.a. = not available.
Source: BP Statistical Review of World Energy, 2008 and 2014.
The main problem in refining was excess capacity. Demand for refined products
was declining in Europe and North America and new refining capacity was coming on stream in the Middle East and Asia as a result of downstream investments
by nation