Academic journal article Journal of the International Academy for Case Studies

Omega Geophysical Corporation

Academic journal article Journal of the International Academy for Case Studies

Omega Geophysical Corporation

Article excerpt

CASE DESCRIPTION

The OMEGA Geophysical Corporation (OMEGA) case was originally designed as a commercial lending case. The case is centered around a loan request from OMEGA to Third National Bank of San Luis Obispo. Company representatives gave the funding needed to reorganize and relocate various company operations as a purpose for the loan request. OMEGA is a multinational company engaged in manufacturing several high-technology product lines and providing related technical services in a highly competitive industry. The company provides both mature and developing products and services to both established and emerging markets. Financial statements provided for analysis include 5-year historical balance sheets, income statements, and statements of cash flows, and 5-year projected balance sheets and income statements.

CASE SYNOPSIS

The case contains sufficiently complex decisions and concepts to challenge advanced graduate students, but is flexible enough to not overwhelm junior and senior level undergraduate students if the faculty member directs the focus to the less complicated issues. In addition to the standard issues involved in commercial lending, there are production, marketing, human resources, and ethics issues that can be considered for focal points of study. Cases based upon the material included can also be developed for use in Human Resources Management, Operations Management, Marketing, and Business Ethics courses at similar levels with the same limitations. There is flexibility built into the materials and the teaching notes to allow the faculty member to adapt the case to meet instructional needs either the undergraduate or graduate level and to focus on the specific discipline of the course in which the students are enrolled. The case is designed to be taught in two to three class hours and is expected to require six to eight hours of outside preparation by students. The faculty member can choose to include all or part of the material provided. The case provides ample opportunity for faculty modification to meet individual styles and needs in commercial lending as well as the different disciplines mentioned above.

CASE INTRODUCTION

OMEGA Geophysical Corporation (OMEGA) is a multi-national corporation headquartered in San Luis Obispo, California. OMEGA is an acronym representing the various products and service areas the company provides. These business segments, and the current primary operating locations for each, are as follows:

* Overland Imaging Systems--San Luis Obispo; Chennai, India; Porto Alegre, Brazil

* Marine Imaging Systems--San Luis Obispo; Chennai; Porto Alegre

* Electronic Data Processing, Transmission, and Communication Systems--Amsterdam, Netherlands (through subsidiary Innova, BV, acquired 2005)

* Geophone Sensors--Maastricht, Netherlands (digital); San Luis Obispo (analog)

* Analysis and Interpretation Services--Menlo Park, California (through subsidiary EnergyData, Inc., acquired 2006)

OMEGA was founded in 1860 to provide equipment and services to the academic community teaching and performing research in geology and geophysics. The company experienced moderate growth for its first 100 years of operation. In the 1960s and 1970s, OMEGA developed a major market in the oil and gas exploration industry. Today sales to commercial customers for oil and gas exploration applications account for 90% of the company's sales, with the remainder going to academic and research institutions. The company established a 100%-owned Dutch subsidiary, now known as OMEGA Nederland, BV (OMEGA Nederland), in 1868, and European operations are conducted through OMEGA Nederland and its subsidiaries. This provides considerable tax advantages for operations in member countries of the European Union (EU), including oil and gas exploration operations in the North Sea.

OMEGA's initial entry into the oil and gas exploration market was through the manufacture of analog geophones, used as sensors in geological and geophysical (G&G) operations conducted by oil and gas exploration and production companies. …

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