Case Study – Emerging Society
In the current project there will discussion over the Oil and Gas market on the future that it has and the current themes which are progressing in the market. It can be said that Oil and gas industry is one of the largest industries in the world the market is very unstable. There are constant increase in demand and price. In the case study, it can be seen that Oil and Gas industry plays a vital role in producing energy needed for operation in all the other industries. Although there are other sources of every nowadays which firm have been using Oil and Gas is considered to be one of the most evident sources of energy which is needed by firm to conduct their operational activities. The importance of oil and gas is huge in world. There have been increasing demands with the growth of modern world. In this project there will critical analysis over the current themes of Oil and Gas market and how the companies in this sector will manage to grow and settle with the growing demand of oil and gas. The assignment will also determine the strategic changes that will be needed in the company in order to overcome the uncertainty of the Oil and Gas market.
In the case study It was found that currently OPEC holds a strong ground in the market is a market leader. It also be said that Private companies are linked with the OPEC that can stated as the governing body in the market. The regulation, supply, price are affected by the regulation which are introduced by the company. In this regards it can be said that OPEC is the prime organization and governing body that regulates the marketing activities of various companies. As it is known that OPEC will be the strong in the future as well it will grow in power full and ease to access oil and gas resources for various companies will end. This will increase the power of OPEC as it will has the large amount of resources left making it a large company which have lot of oil and gas resources left. It can be said that powerful countries like China, USA and UK will shift to another source of energy that can affect the oil and gas market in the future. As resources of oil and gas will decrease in future, the supply will decrease increasing the price of the resources available. There is a uncertain market for the oil and gas in future because shift of major countries to other energy sources may hamper the demand whereas decrease in supply may increase the price of resources available. This shows that the merging society will be based around the OPEC that is reigning supreme in the society as an market leader and regulator (Warneke et al 2014).
Emerging Work and Environment
Although the industry is a very important industry is a major source of energy supplier the industry is infamous for its environmental and social activities. The industry is also known for corruption which prevails in its work environment. It can be said that non-compliance to the environmental and social regulation has led to such infamous reputation of the industry. The pollution spread through oil spilling in sea and not meeting the emission standard is what create such bad representation of the companies in the industry. For the merging themes in the market the companies and the regulatory bodies have thought of increasing there ethical working environment within the industry to gain trust of public which may increase future investment in the market. The regulatory bodies will create an audit committee to investigated conducted by various companies in the industry. The company also tried and promote the compliance of industry to the environment standard such cleaning of seas and ocean under there CSR activities and to partner up with other companies consulting on there emission norms which is to be maintained in order to comply with emission standards. This is the emerging work and environmental them which going to happen in the future of the market. Creation of audit reports and compliance with environmental norm will be the key focus of this emerging theme within the industry to grow trust and respect from the public sector and ensure that investors increase within the sector (Papaioannou et al. 2016).
With the growth of industries and globalization companies now opt for different sources if energy rather than oil energy for there operational activities. This may increase in the future course of time that may decrease the demand of oil and gas resources. The shit of energy usage trends within high technologies equipped companies relied on solar and hydra energy for the operations. It can be said that major oil and gas resources are used in motor vehicles. In the recent time Motor vehicle companies has created a vision to shift to electric motors rather than a fuel engine. This may also emerge as a technological theme which can have an negative impact on the demand of oil an gas in the near future. The technological advancement have also occurred in the industry as there are new machineries brought into the market for checking the emission rate of oil and gas which can help the oil and gas producers to check the quality of oil and gas produced. There has been legal transformation that are to be made in order to achieve sustainable technological development in the company. Technological development will tend to bring a equilibrium between the demand and supply of the market hence helping the industry to operate in an more efficient manner and meeting the demands at a lower price which will be beneficial for the growth of the industries.
Emerging Technology
The market is likely to be uncertain in the future decade of the sector. IT can be said that emerging theme in marketing aspect of this sector is that the market in the future will be very uncertain and unstable which will ultimately be risk to invest in. Some scholar state that demand of resources will increase which will increase the value of Underground oil and some say that the shit of some developed major countries to different sources of energy will refrain the growth of demand and will decrease the value of underground oil. The decrease in resources of oil and gas will decrease in the near future which will ultimately affects it price and the price will increase significantly this is because the supply of this resources will decrease which will cause an imbalance between the demand and supply of the market. The trust issues with the industry may also decrease the number of investor that the industry has in the near future. It seems the merging market of oil and gas industry is very uncertain because the demand and supply of the resources are uncertain there are shift of countries that may happen in the near future and this will tend to affect the oil and gas industry. It can also be said that investors in the market will now tend to invest in market oil rather than investing underground reserve oil as there is uncertainty in the future of the industry which can affect the business of the companies in this sector (Paterson, 2017).
1. According to the case study the demand of Oil and Gas is to increase with the growth of modern world. The need of oil and gas energy will increase subsequently with the increase of development rate in different industries and sector. As gas and oil combined contribute, 52% of the energy produced in the industrial sector it no denying that this will increase by fair margin in the upcoming days. In the initial day the basic assumption of countries having oil was the industries would use oil that is easy to access and after the resources end in this sector the industries in this countries will now be dependent on the resources of OPEC or the Organization of Petroleum Exporting Countries (Finšgar and Jackson, 2014). It can be said that in this scenario the demand of oil and gas exported by the OPEC will increase drastically which can affect the equilibrium of demand and supply within the market. OPEC is expected to have a greater oil power and resources in the coming days that is positive sign for the supply of oil and gas in the market (Kelland, 2014). In this case the companies are thinking that value of in the market is more realistic that underground oil. Their risk of uncertain overvaluation of oil and gas synergies which can lead to sudden drift of energy users to use different sources of energy for three operational activities which might decrease the demand of oil and gas within the market (Yusuf et al. 2014).
Emerging Market and Industry
This is dramatic and uncertain shift of energy supply and demand that is expected to happen in the future decade of oil and gas industry.. One of biggest things that will happen is that the turn of oil based automobile engines into electric motors (Shukla and Karki, 2016). Oil and gas are majorly used in Vehicles and automobiles so sudden shift of advanced technologies can introduced electric motor vehicles that will lead a drastic downfall in the demand of oil and gas. Now, the basic option that lies here is, what is the time span in which the following can happen. It isn’t sure when the turn of events would occur hence it is important that the companies under this hector decide to enter proper agreements with retailers of buying fuel and oil product at estimated amount say for 5 years. If the companies and organization under this sector will have a time bound contract with buyers, it will be beneficial for the company to remove this uncertainty for a period of time. If there are turn of event in this time period the company will have some to time to strategies their future course of action.
Now currently there is high chance that the companies in the market have to think twice before investing in producing reserves. It is not likely that reserves underground will increase or decrease in value hence this uncertainty will shift the investing strategy of companies in the company. The company in the current should look for investing in sales rather than investing reserve. AS there is uncertainty in the market it is not efficient to investing in growing reserves rather than the company should increase in supply and sale which will be more beneficial for the financial stability of the market as well as the companies within. If there is a turn of events where the demand and rises or falls (Ablo, 2015).
2. The theme identified through the above analysis is that the market of oil and gas in the future is very uncertain. According to the modernization of the industries, as well as some countries the demand of oil and gas energy is expected to increase. However, sudden shift in powers like US, China and UK can affect the demand of the oil and gas (Hebblewhite, 2017). Hence, it is more beneficial for the companies in the sector as well as OPEC to invest in market oil and gas that will increase the supply of the product and will also increase the sales of the product. This sales oriented strategy will be the most beneficial for the company in order to deal with the uncertainty in the future of the market.
One of the major changes which will be in the sector in the time period of 5 years is the investment decision which the private companies will make in order to mitigate the risk of uncertainty in the market. The strategic decision that will be changed through the scenario of this uncertain market is change of major operational areas that the companies as well as OPEC operate in (Ford et al. 2014). The industry is the least trustworthy industry in world although it being a source of energy producing sector. This is because of non-communication of key technical issues and not meeting to the norms of environmental and social changes. Over the next 5 years, the communication of technical issues as well as meeting the environmental standards will be addressed by the organization under this sector. Not doing so will harm its reputation and may cause major problems for the company in their operation. There are indications of the industry being corrupt. This shows that there are minimal trusts within the company in the sector. Hence it can be said that in the timeframe of 5 years there can be major changes which the private companies would take to take down corruption from the industry (Hale et al. 2016).
For addressing the issues of corruption and other significant problems which decrease the public trust over the industry in recent year the companies under this sector might introduce a worldwide reporting standard for the company which belongs from oil and gas industry. It can be said that for meeting the problems of regulatory issues the companies under this sector will have audit done in their companies to address the public about the ethical operation which company performs and compliance to environmental standard which are too followed by the firms in this industry (Tiu and Advincula, 2015).
Now in sequence of various challenges that the companies under this sector are facing it can be said that there are major changes that the industry and companies within this industry will see in time frame of ne 5 year (Appel et al. 2015). One of them being the change in marketing strategy as it is known that there are countries that might shift to other source of energy hence the firms under this sector will ensure that other major countries that will use oil and gas for their operation are targeted for future operational activities. It is also confirmed that in the time frame of next five years the investor will change their investing strategies and will investing in market oil rather than increase oil reserves. The companies in the sector will also try meet regulatory norms in relation to environmental regulation to maintain the authenticity of their operations.
3. After the analysis of the case it can be said that the future of Oil and Gas industry is very uncertain (Boltaev et al. 2017).
- The first recommendations for the companies in this sector are that they should change their marketing strategy in order of increasing and maintaining the level of oil and gas demand in the market. Through focus of some emerging powers, the companies under this sector will be able to operate more efficiently and will not get deprived of demand and supply uncertainty. It can be said that through efficient marketing in emerging oil and gas market the companies in this sector will be able to maintain and increase the demand of oil and gas.
- Now the investing operating and investing decision within the market should also change with the growing uncertainty (Ciocan, 2015). It can be said that through effective use of marketing tactic the company will be able to mitigate the risk of uncertainty over the demand of oil and gas which is prevailing in the future of the market. Hence removing the uncertainty would be more beneficial. The investing should be done on market oil in order to meet the current demand rather than investing in increasing the reserves the company has the value of oil then will be uncertain. It can be said that doing this will make the investment more practical in nature (Bergh et al. 2016).
- It can also be said that there is no trust of public within this sector due to event of corruptions and other unethical sequences. It is important that the company focus on this aspect as it may lose it potential investor through this image around the globe. The company should prove the authenticity to the world using certain measures in order make the inventor believe that companies under this sector are ethical so that the investment increase which will be beneficial for an individual company as well as the whole industry. For this purpose it is recommended that OPEC introduces a global reporting standard which is will be reported by very firm in the market showing the authenticity of their work (Skovhus et al. 2017).
- Last but not the least the companies under this sector have to comply with environmental and social norms in order to gain trust of the public sector. As seen above the company was highly infamous for not complying with operational activities which are under the environmental and social safety norms. This states that the companies under the Oil and gas industry do not comply with the norms stated under the environmental and social regulations (Eckert and Skovhus, 2018). In regards of this it can be stated that companies under the oil and gas industry should comply with the norms as stated by the worldwide standard related to oil springs cleaning, sea cleaning and other. The companies in this sector should last partner with motor vehicle companies to produce oil that has a stipulated emission rate. In this way the company will be able to communicate their technological problems and reach point of meeting environmental as well as social norms.
Conclusion
Concluding in the light of above context it can be said that the future of Oil and Gas Industry is very uncertain it is not properly known what is going to happen in the future. There are two predictions one shows that with modernization of society the demand of oil and gas for producing energy will increase whereas one shows that the shift of major power to other source of energy will decrease the demand and value. There are various major faults with the system that has decreased the trust of the public over the industry decreasing the chance of future investment. Hence following the recommendation above will the firms in this industry top manage the effect of future uncertainty.
References
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