Archive for April, 2011


Blog 14: Have Oman and Qatar escaped the Arab revolts?

April 21, 2011

Due Date: April 21, 2011

Article Source

Article Date: April 20, 2011

Article Title: Have Oman and Qatar escaped the Arab revolts?


Oman has often been considered a peaceful country because its monarch has often met the demands of protesters but is now seeing more and more protests because of the large job unemployment. Sultan Qaboos has been reigning for 40 years as an absolute monarch and has been seen as pro-Westerner and has reacted quickly to the protests. Qatar is not seen as a threat because it is seen as one of the richest countries and only 250,000 of its 1.9 million population are Qatari; the rest are foreign workers.


Even though Oman may not be a very oil country, if their country were to revolt it would continue the spread of protests and other revolts throughout the middle east and ultimately cause oil prices to rise. This would continue to tighten the supply of oil and energy throughout the world and as supply tightens we will see many resulting problems throughout the world. Companies need to be especially aware of the middle east protests so that they can understand what impact it will have on their business here and abroad. First, if their supply chain runs through the Middle East or Africa in any way they will see increasing prices as it becomes harder and harder to negotiate and move product around those areas. In addition, the biggest price factor is oil and as it becomes more and more limited the prices will continue to spike. It is estimated to reach over $5 a gallon this summer which is almost twice of what it is now (or at least what it was a couple months ago). This is a major impact on companies to have something double in price in only a matter of months. The second thing that companies have to be aware of is how this will impact the consumer as well. As consumer spending tightens because they also have to spend twice as much as gas and then if that price hike gets passed on in other products from food to technology they are going to have to cut back as much as they can and purchase only what they need. Therefore I think that companies are going to have to make the decision if they are going to absorb the gas prices or pass them on to their consumers. I think that it will be easier for companies that fulfill a need rather than those that fulfill a want. For example, I really wanted to get a new computer because mine is falling apart but with so many price increases to consider I decided to pass on it even though I have enough money. As you can see from this example consumers may hold back on spending because they know they might need the money down the road when taxes increase or gas increases or food increases or interest increases, etc etc. This can already be seen in the parts of Japan where the earthquake did not hit as those who have money are holding onto it so that they can help support others who got hit by the earthquake or at least so they can have some padding as the economy and country struggles to put itself back together (which could take up to 15 years with the current nuclear crisis)

All in all, these countries could become major players in the whole balance of supply and demand and the impact of increasing prices.


Blog 13

April 19, 2011

Golden Ticket


Blog 12: Japan’s government downgrades its outlook for growth

April 14, 2011

Due Date: April 14, 2011

Article Source

Article Date: April 13, 2011

Article Title: Japan’s government downgrades its outlook for growth


After the two disasters in Japan combined with the radiation leakage has resulted in the Japanese downgrading their assessment of the economy.  These disasters have caused rolling blackouts and energy shortages across the country causing many large companies to have reduced production. In addition, the radiation crisis at the Fukushima plant has been raised to a seven which is the highest level.


This news has both good and bad sides for companies all around the world. First, consumer spending from Japan will be down and will most likely impact the global economy and any companies who rely on Japan for any part of their supply chain or for their customer base. In addition, companies will have to be very aware of  consumer spending throughout Japan so that they can provide their products to the places where consumer spending is up. For example, many places throughout Japan that did not get hit by the disasters are more likely going to spend more than people who are just trying to stock up on necessities because their whole livelihood was destroyed by the earthquake and the tsunami. Finally, companies will have to be aware of the restrictions resulting from the radiation and how their exports and imports will be affected because Japan’s supply is very low while their demand is very high for almost any product.

There are many benefits for businesses other than demand from Japan being higher. First, they can take advantage of the fact that many Japanese companies being unable to produce as much because of the rolling blackouts. We can already see this as many US car makers have been able to create a profit in recent days because of the increased demand for their products as Japanese suppliers have fallen behind. Throughout all of these times companies will increasingly have to choose what strategy they will choose to last throughout the changing global economy. Will they retrench their company, stabilize it, or try and grow?