Archive for the ‘Week 15’ Category

h1

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

April 21, 2011

Due Date: April 21, 2011

Article Sourcehttp://www.bbc.co.uk/news/world-middle-east-13147271

Article Date: April 20, 2011

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

Summary: 

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.

Reflection:

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.

h1

Blog 13

April 19, 2011

Golden Ticket