Global recession

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Global recession, is it affecting oilcom (t) ltd to make a stand in a local market and competing to stand internationally?

Introduction

Global recession is a decline in real per-capita world gross domestic production and can be measured using other global macroeconomic indicators such as industrial production, trade, capital flows, oil consumption and the level of unemployment[1].

Global recession was caused due to the global credit crunch which original source started since in 2004 through US banking system on mortgage lending, this problem caused a global economy meltdown[2].

The environment where by there is a sudden shortage of money or credit from banks or other lenders is what called a credit crunch, lenders always follows this kind of route to reduce any other known risk to their sides[3].

The credit crunch put economies of so many countries at bad shape and caused a severe shortage of money or credit which makes people (customer and consumers) to re-think on amount of things they will spend their money on. These conditions forces so many companies to incur losses as spending trends dropped down dramatically[4].

Objectives

The purpose of this study is to find out how the global recession is affecting Oilcom Tanzania Limited to compete in a local market and at the same time within a global market and also to find out how Oilcom Tanzania Limited responded during the difficult times brought by recession.

The study aims to achieve the following objectives with the respect of marketing strategies.

The objectives are:

* To analyse marketing strategies that oilcom (T) ltd used to tackle global recession.

* To make an-depth study on how oilcom (T) ltd was competing in the market on time of recession or marketing environment difficulties.

* To show the effects of competitive advantages brought by multinational companies having financial power (capital) from all over the world and compete against Oilcom (t) Ltd who are depending on only one deployed capital.

* To find solutions for the future if similar conditions will happen again.

Literature Review

Global recession is a decline in real per-capita world gross domestic production and can be measured using other global macroeconomic indicators such as industrial production, trade, capital flows, oil consumption and the level of unemployment[5]. The measurement can also be used to determine the recession of a certain country.

As on every company, Oilcom Tanzania Limited formulate their own strategies to enable them to run the company, from a normal strategic way of making decisions on running the internal affairs of the business to a strategic methods of competing with other competitors within the market or even against any potential entrants so that they can win that particular market segment, increase the market shares, increase the profits, reduce operational costs and increase sales volume.

It is very difficult to adopt changes in a time of global recession crisis to save company operations and objectives to remain constantly positive, and those who are willingly to take radical decisions towards the change of environment they are in, will always make it through somehow[6].

Evidently, we have noted that Oilcom Tanzania Limited are likely to have multiple goals and objectives for both short and long term period[7], but the obstacles brought by global recession will have so many consequences for the business and its own customers and consumers. For instance, people will lose their jobs through redundancies from different sectors as the results of these industries to cease production and decided to reduce workers to cope with the environment conditions, which again will increase the level of unemployment to the country[8], the very same people who lost their jobs are also customers of Oilcom Tanzania Limited, Another example of impact brought by global recession would be a shortage of disposable incomes or lack of obtaining credit to customers and consumers to enable them to continue with their normal lifestyles[9], because of all mentioned and other outcomes brought by global recession will force to reduce the demands on products and services offered by Oilcom Tanzania Limited as consumer will concentrate on things that matter most and will use an opportunity cost analysis to make up their decisions[10].

On oil aspect, throughout the global recession we have seen oil prices to drop down dramatically for year 2008 from around US$150 per barrel[11] up to US$75.97 per barrel as for today 28th November 2009[12].

Exhibit: MK1: Showing price of crude oil as for 28th November 2009, source: oil-price.net

The above statement indicates that the demand is lower than the supply which caused the price of crude oil to shift from high to low, the reasons of having low demand and price as mentioned above was caused because of global financial crisis, fear of global recession which brought an increase of supply[13].

The situation will cause so many effects to Oilcom Tanzania Limited, for instance, let's take an example as above, let's say if Oilcom Tanzania Limited bought crude oil at price of US$150 per barrel to import in Tanzania and now the price of crude oil has changed to US$75.97 per barrel, from Oilcom Tanzania Limited point of view on this example will be to make loss as options to them are very few. The similar global crude oil price change has been happening throughout the time of global recession.

Evidence suggests that the only way to dissolve the current global recession impacts and after effects to Oilcom Tanzania Limited is for a company to react quickly and swiftly on the concern matter to come up with strategic decisions and methods which are unanimously agreed on its acceptability and feasibility to make course during the operations in a time of crisis[14]. Strategic decisions such as research and development, product development, market development or diversification, cost leadership, differentiation, focus on particular segments or customers, etc can be used to analyse the situation.

Intended Methods of data Collection

A large proportion of data collected will be both in a form of secondary and primary research.

Primary Research

1) This will be done by conducting telephone interviews and questionnaires to the following key people at Oilcom Tanzania Limited, their positions are as follow:

* Marketing and Sales Managers of Oilcom Tanzania Limited.

* Operations Manager of Oilcom Tanzania Limited.

* Director of Oilcom Tanzania Limited.

Secondary Research

a) Online web research will be used to find out prices of global crude oil prices and its implications.

b) Marketing Books will be used to analyse and compare strategies being followed by Oilcom Tanzania Limited to tackle global recession

c) Request will be sent to above key people to obtain annual report for the year 2007 or 2008 to see the operations of Oilcom Tanzania Limited as the global recession took place.

Resources

i) Home computer, Personal phone, Fax and Library facility at Thames Valley University will be used to enable the process of gathering all data successful and complete the project Preliminary Bibliography

* ANON - What is the Credit Crunch?, available from http://www.rotherham.gov.uk/graphics/Benefits/Money+Advice+Service/Credit+Crunch/What+is+the+Credit+Crunch.htm [accessed on 17.11.2009]

* ANON - Timeline: Credit crunch to downturn, available from http://news.bbc.co.uk/1/hi/7521250.stm [accessed on 17.11.2009]

* ANON - About Oilcom Tanzania Limited, available from http://www.oilcomtz.com/ [accessed on 17.11.2009]

* ANON - Recession: Impact on Employment, available from http://www.calculatedriskblog.com/2008/02/recession-impact-on-employment.html [accessed on 17.11.2009]

* ANON - Confronting the financial crisis, available from http://www.itu.int/osg/csd/emerging_trends/crisis/fc01.html [accessed on 17.11.2009]

* ANON - Crude oil price, available from http://www.oil-price.net/ [accessed on 28.11.2009]

* ANON - Drastic Fall in Oil Prices, available from http://www.arbahcapital.com/img/pdf/Drastic_Fall_in_Oil_Prices.pdf [accessed on 28.11.2009]

* Andrew Walker - Crude oil's rollercoaster prices, available from http://news.bbc.co.uk/1/hi/business/8144533.stm [accessed on 17.11.2009]

* Asha Rose Migiro et al - Adopt varied responses to avert global recession, advises deputy secretary-general, available from http://www.un.org/News/Press/docs/2008/gaef3211.doc.htm [accessed on 17.11.2009]

* Bob Davies - What's a Global Recession?, available from http://blogs.wsj.com/economics/2009/04/22/whats-a-global-recession/ [accessed on 17.11.2009]

* David Budworth - The credit crunch explained, available from http://www.timesonline.co.uk/tol/money/reader_guides/article4530072.ece [accessed on 17.11.2009]

* Joseph Lazzaro - World Bank sees global recession in 2009 on consumer pull-back, credit crunch, available from http://www.bloggingstocks.com/2008/12/10/world-bank-sees-global-recession-in-2009-on-consumer-pull-back/ [accessed on 17.11.2009]

* John Quelch - Marketing Your Way Through a Recession, available from http://hbswk.hbs.edu/item/5878.html [accessed 28.11.2009]

Timetable

Item

Objective

Notes

Time

1

Preparation

1.0

Dissertation Proposal

Submission

04/12/2009

Returned

11/12/2009

1.1

Meet supervisor

18/12/2009

1.2

Literature Review

20th - 24th Dec 2009

1.3

Methodology

Primary Data

28th - 02nd Jan 2010

Secondary Data

04th - 09th Jan 2010

1.4

Data Sorting

11th - 16th Jan 2010

1.5

Specification

Specify Dissertation, structure, format and revise.

18th - 23rd Jan 2010

2

Execute

01st Feb 2010

2.1

Literature review

Chapter writing and structuring

01st - 06th Feb 2010

2.2

Working hard on project follow up every data, looking for help from the supervisor.

08th Feb - 1st March 2010

3

Reviewing and updating

First review updating.

03rd - 05th Mar 2010

Second review updating.

07th - 09th Mar 2010

3.1

Break

13th - 25th Mar 2010

3.2

Final updating

Finishing up the project.

26th Mar - 07th Apr 2010

4

Submission

Printing, Binding and submission

12th - 23rd Apr 2010

[1] http://blogs.wsj.com/economics/2009/04/22/whats-a-global-recession/ [accessed on 17.11.2009]

[2] http://www.timesonline.co.uk/tol/money/reader_guides/article4530072.ece [accessed on 17.11.2009]

[3] http://www.rotherham.gov.uk/graphics/Benefits/Money+Advice+Service/Credit+Crunch/What+is+the+Credit+Crunch.htm [accessed on 17.11.2009]

[4] http://news.bbc.co.uk/1/hi/7521250.stm [accessed on 17.11.2009]

[5] http://blogs.wsj.com/economics/2009/04/22/whats-a-global-recession/ [accessed on 17.11.2009]

[6] http://www.un.org/News/Press/docs/2008/gaef3211.doc.htm [accessed on 17.11.2009]

[7] http://www.oilcomtz.com/ [accessed on 17.11.2009]

[8] http://www.calculatedriskblog.com/2008/02/recession-impact-on-employment.html [accessed on 17.11.2009]

[9] http://www.bloggingstocks.com/2008/12/10/world-bank-sees-global-recession-in-2009-on-consumer-pull-back/ [accessed on 17.11.2009]

[10] http://www.itu.int/osg/csd/emerging_trends/crisis/fc01.html [accessed on 17.11.2009]

[11] http://news.bbc.co.uk/1/hi/business/8144533.stm [accessed on 17.11.2009]

[12] http://www.oil-price.net/ [accessed on 28.11.2009]

[13] http://www.arbahcapital.com/img/pdf/Drastic_Fall_in_Oil_Prices.pdf [accessed on 28.11.2009]

[14] http://hbswk.hbs.edu/item/5878.html [accessed 28.11.2009]

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