A case study on Equilon: A Texaco/Shell Strategic Partnership.
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Case 4.5 - EQUILON: A Texaco/Shell Strategic Partnership 17 November 2004 MKTG 4354 Background Texaco, Inc. is looking for new ways to cultivate its business in the oil and lubricants industry. Texaco joined forces with Shell Oil Company because of its strong financial position, market share in the U.S., and brand recognition. By entering into alliances (Equilon Enterprises and Motiva Enterprises) with Shell, both companies looked to lower costs, improve margins by at least $800 million, and have greater returns on assets. These alliances allowed Texaco and Shell to integrate overlapping functions and assets. With a steady decline in oil prices, companies are looking for new strategic ways to compete in the industry. Many believe that the only way to survive is to partner with another company and combine complementary strengths. For example, Exxon Mobil and BP Amoco recently announced plans to merge. Texaco and Shell failed to create a joint...


