Business and Economics Analysis

This assignment is a detailed analysis of various business and economics topics, including the impact of economic and financial variables on cash conversion cycle, dimensions of sustainable value chains, and social media's influence on business-to-business sales performance. It also includes a study of application of Altman Z score model for Oman cement company and an analysis of gender in management in Oman's labour force.

Running head: THRIVING COMPETITIVE GLOBAL CONTEXT
Thriving competitive global context
Name of the Student
Name of the University
Author note

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Table of Contents
A discussion of the value chain concept..........................................................................................2
Marketing and sales of Oman Oil Company...................................................................................6
Services provided by Oman Oil Company......................................................................................7
Identifying the specific areas along the chain where clear competitive advantages have been
gained...............................................................................................................................................8
Conclusion.....................................................................................................................................11
Recommendation...........................................................................................................................11
Improvement of Inbound and outbound logistics of OOC........................................................11
Marketing Strategy for Oman Oil Company.............................................................................12
Reference Style:.............................................................................................................................15

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A discussion of the value chain concept
A value chain can be defined as a set of activities which is performed by an organization
operating in a specific industry in order to enhance the value of its service or product in the
international market. The concept of value chain analysis was first developed by Michael Porter
in the year 1985 (Fearne, Martinez and Dent 2012). The book in which the concept of value
chain analysis was first described was named ‘Competitive Advantage: Creating and Sustaining
Superior Performance’, which was a best seller. Value chain analysis can be considered as a
strategic tool which is used to analyze the internal activities of an organization. The chief goal of
the above-mentioned analysis is to recognize the specific internal activities of an organization
that can be considered as the most valuable ones. The values of the internal activities are
measured in terms of cost, competitive or differentiation advantages. Since the value chain
analysis enables the organizations to look into the internal activities of the organization, the
management of the organization is able to understand the organization’s competitive advantages
and disadvantages in the global market. If the organization competes through cost advantage, it
will be able to perform better than its competitors by producing superior service at costs lesser
than its competitor (Soosay, Fearne and Dent 2012). This, in turn, will enable the organization to
gain a competitive advantage over its competitors in the global market.
The chief purpose of value chain analysis is to create or strengthen the competitive
advantage of an organization. In order to understand the process of utilizing the Value Chain
Analysis tool, an organization should first understand what type of competitive advantages does
it wants to create. Competitive advantage can be segmented into two parts namely, Cost
Advantage and Differentiation Advantage (Hilton and Platt 2013). The concept of cost advantage

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includes when an organization compete on the basis of costs and hence needs to understand the
cost advantages as well as disadvantages along with identification of the factors that drive these
costs. Some of the examples of organizations that use the cost advantage approach are Amazon,
McDonald’s and Toyota. On the other hand, differentiation advantages are practised by firms
who provide superior services or products to the consumer within a fixed price range. Some of
the common examples of international organizations whose goal is to obtain differentiation
advantages include Apple, Samsung Electronics, Starbucks and Google (Johnson 2016).
Advantages of value chain analysis
The Value chain analysis tool is chiefly used by the company to ensure that the value
created by the company is exceeding the cost invested by the company to create the value. This
can be done by analyzing the five primary value chain activities that include inbound logistics,
operations, outbound logistics, marketing and sales and services. If an organization successfully
creates advantages in any one of the above mentioned activities, the company gains a
competitive advantage in the global market which in turn enhances the overall revenue of the
organization.
Weaknesses of Value Chain Analysis
While there are several advantages of conducting a value chain analysis, one of the
crucial disadvantages of performing the same includes loss of the chief vision and strategy of the
company. This happens since, in order to conduct value chain analysis, organizations need to
break down its operations into segments (Ross 2012). Another disadvantage of incorporating
value chain analysis tool in the development strategy of the company includes the possibility to
lose sight of how the activities are associated with each other. Several times, the value chain

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analysis is unable to link each activity to the chain which results in enhancement of
compatibility.
A brief background of the Oman Oil Company
The Oman Oil Company (OOC) is referred to a national investment company located in
Oman. The entire organization is owned by the government of Oman. Established in 1996, the
Oman oil Company invests in energy infrastructure and transportation, power generation,
petrochemicals manufacturing and oil refining, in addition to the oil and gas exploration and
production (Fuccaro 2013). Being a highly renowned company in the global market, the Oman
oil and gas company owns 49 percent stake of the Oman Oil marketing company and has a
network of 179 oil filling stations across Oman under the brand name of OmanOil.
Application of value chain analysis to the global operations of Oman Oil Company
In order to apply value chain analysis to the global operation of the mentioned company, it is
crucial to identify the primary and secondary activities of the company.
According to the value chain analysis framework, the primary activities of the Oman Oil
Company can be segmented as follows:
Inbound logistics and Oman Oil Company
Inbound logistics can be defined as the transport storage and delivery of goods associated
with the business of an organization. The supply chain of Oman Oil Company like other oil and
gas industries is highly complex. When it comes to oil and Gas Company, The transporting
products needs strict regulatory compliance, special equipment as well as extensive safety
procedures. Along with that the supply chain of the mentioned company also requires multiple

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modes that include every step initiating from supplying materials to the oil rigs to transporting
extremely heavy and hazardous materials. According to researchers, the inbound logistics of the
Oman Oil and Gas company demands high visibility and high sense of urgency (Wood et al.
2012). Unlike other companies, if materials are not supplied on time during the production, the
consequence can lead to a disaster. It is really crucial for the company to maintain the oilrig. Any
deterioration of oilrig may result in the loss of more than 1 million dollars per day (Wood et al.
2012). Since the mentioned company follows traditional oil and gas operation, it chiefly relies on
trucking and warehousing as major inbound logistics.
Operations of Oman Oil Company
Oman Oil Company has four chief sectors that operate the projects of Oman Oil
Company. The four sectors of the mentioned company include Takamul Investment company
SAOC, Oman Oil Facilities Development Company LLC, the Oman Oil company Exploration
and production and Oman Duqm Development LLC. In addition to the four main sectors, the
company also has international assets that are managed by the international investment unit of
the Oman Oil Company (Kumar and Chandrakar 2012). The operation of the OOC includes
exploration, extraction, refining as well as transportation of petroleum product. Along with the
mentioned operations, marketing the petroleum product in the global market can also be defined
as a part of the operation of the company. Two of the largest value product of the mentioned
organization includes gasoline also known as petrol and fuel. Petroleum also acts as a raw
material in the several chemical industries that include solvents, pesticides, fertilizers, synthetic
fragrances and pharmaceuticals (Kumar and Chandrakar 2012). In order to enhance its overall
revenue, apart from oil and gas exploration as well as production, the company also invests on

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power generation, energy infrastructure and transportation, oil refining as well as petrochemical
manufacturing.
Outbound Logistics of Oman Oil Company
Outbound logistics can be defined as the transport, storage and delivery of the products
that are moving out of the company. The Oman Oil Company has developed highly advanced
logistics and supply chain solution that ensures reliable transportation as well as storage of the
petroleum products. The management of the mentioned company also ensures high visibility into
capacity management as well as in shipments for the transaction (Terpstra, Foley and Sarathy
2012). The intermodal transportation network of the company operates with clockwork precision
in order to ensure smooth inward as well as outward cargo delivery.
Marketing and sales of Oman Oil Company
According to the researchers, all the major oil companies at Muscat, Oman has evidenced
a drastic drop in the overall revenue in the year 2017 (Terpstra, Foley and Sarathy 2012). The
chief reason behind this drastic drop in revenue is considered to be an enhancement of the fuel
prices and reduction in sales volume of Petrol. The fuel price reforms that was introduced by the
Omani Government in 2016 along with the economic slowdown has imposed a negative impact
on three major oil and Gas organizations of Oman, namely, Shell Oman Marketing Co, Al Maha
Petroleum Products Marketing Co. and the Oman Oil Company. While the other two major
competitors of OOC, that is Al Maha Petroleum and Shell Oman has evidenced a drop of 38
percent and 19 percent drop in their net profit, OCC has experienced 8 percent decline in the net
profit of the company by 2017 (Al-Shubiri 2015). Hence the company is planning to change their
marketing and sales strategies to enhance their overall revenue at the end of the year. The

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refining and marketing assets of OOC serve three strategic purposes. Firstly, the company
concentrates on fulfilling the local demands for refined products that are necessary to be used as
fuel. Secondly, the company provides building blocks for the development of petroleum industry
in Oman and thirdly, they promote Omani products that include both processed materials as well
as raw hydrocarbons to the global market. The company also markets as well as transports local
products to the international clients with the help of its Shipping and trading assets.
Services provided by Oman Oil Company
When it comes to the Oil and Gas industry, consumer service can be defined as the field
which helps the companies to earn consumer loyalty by providing efficient consumer care
service. The core objectives of the Oman Oil Company include:
 Developing and investing in profitable business both in Oman as well as Internationally
 Creating vast employment facilities within Oman
 Put more emphasis on enhancing the talent of the business leaders and the business
professionals.
 Maximize the value of from the resources of Oman.
From its objectives, it can be clearly understood that the chief consumers of the company are
both from Oman and international market. Since the company suffers from major competition in
both Oman as well as in the international market, the company pays special attention to provide
excellent after sales services to the consumers. The mentioned company understands the
requirement and expectation of the consumers to enjoy the enriching experience and authentic
services. Thus the consumer service of Oman Oil Company is committed to provide and
maintain the above-mentioned experiences. The company understands that great consumer

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experience is the key to the expansion of the business. The new call centre of the Oman Oil
Company that has been relaunched in the year 2009 has reordered to provide outstanding service
to the consumers in terms of technical assistance as well as an emergency complaint (Oman-
oil.com. 2018). Thus the mentioned sector of OOC has managed to successfully handle
consumer’s requirements by directing, obtaining and managing the requests of the consumers. In
order to enhance their consumer care service, in 2009, the company provides effective consumer
service training to the senior managers, consumer service agents, filler as well as the employees.
The Oman oil company is constantly working on incorporating new technologies and creates
new systems for providing superior quality of service to the consumers. In the year 2018, the
motto of the company is to provide more consumer-friendly service by using latest technologies
and equipment available in the market. According to the researchers, when it comes to consumer
care services, the consumer care services of the Oman Oil Company is much better than that of
its competitors (Oomco.com. 2018).
Identifying the specific areas along the chain where clear competitive advantages have been
gained
Considering the fact that the Oman Oil company invests in power generation, energy
transportation and infrastructure, petrochemical manufacturing, in addition to oil exploration and
production, the three specific areas across the value analysis chain where the company gains
clear competitive advantages include production, sales and marketing and after sale consumer
service. Considering the fact that the upstream investment of Oman Oil Company is managed by
the Oman Oil Company Exploration and Production LLC, the aim of the mentioned subsidiary is
to invest in strong operational processes in order to ensure huge financial as well as operational
results (Oman-oil.com. 2018). Another chief target of the production subsidiary of the company

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is to pursue opportunities that will help the Oman Sultanate to meet the energy requirement in
the future along with providing professional development of the workforce of the company.
When it comes to exploration and production of Oil, The chief assets of the Oman Oil Company
includes Abraj Energy Services, Block-42, MGP and Abu Tabul with an OOCEP share of 100
percent. Some of the major highlights of the production of Oman Oil Company are as follows:
 273 million barrels of Oil Equivalent
 Average daily production of 32,967 barrels of oil equivalent in one day
 The company signed Block 61 Joint Operation Agreement with BP (Oomco.com.
2018)
Thus it can be clearly understood that the production of the mentioned oil company is pretty high
compared to its competitors, both in Oman as well as in the International market.
When it comes to the marketing and sales strategy of the mentioned company, the
company's refining and marketing assets serve three strategic purposes to enhance the overall
revenue of the company. The first strategy of the company includes fulfilling the local demand
for oil and fuels. Secondly, the company concentrates on providing building blocks for the
overall development of the petroleum industry in Oman. The third and final marketing strategy
of Oman includes promotion of Omani products that include processed materials like
petrochemicals as well as raw hydrocarbons in the global market, through minor investment in
the key countries (West, Ford and Ibrahim 2015). When it comes to major marketing assets of
the Oman Oil Company, the mention worthy marketing assets of the company include Oman oil
Marketing Co. SAOG (Omanoil), Qingdao Lidong Chemical, Oman Refineries Limited and
Oman Oil Refineries and Petroleum Industries Company. The core business of Oman Oil

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Marketing Co. S.A.O.G. involves marketing and distribution of lubricants and fuels and direct
fuel sales to the commercial sectors as well as the government. Some of the major marketing and
refining highlights of the company are as follows
 The company is enlisted amongst the top 20 companies in the Oman Economic Review
 The ORPIC Aromatics Production of the company has risen up to 942,000 tones.
 The ORPIC Board has approved the Sohar Refinery project of the company (Paniagua
and Sapena 2014)
However, as discussed earlier, instead of having a strong marketing and sales base, the
company is suffering from decrement in the net profit due to enhancement in the price of oil.
As been discussed earlier, the third primary activity which has the potential to provide
effective competitive advantages to the company is the Oman Oil Companies Consumer service.
Considering the fact that some of the major competitors of the company include Al Baraka
Oilfield Service and Arbaco Oil and Gas Company, it can be stated that the consumer service of
Oman Oil Company is better than its competitors. The Company has understood that one of the
chief methods of gaining competitive advantage is to market the consumer feel that they have
listened and their queries have been solved. In order to enhance the skills of their consumer
service management staffs, the Oman Oil Company also implements effective consumer service
training. Apart from that, in order to provide 24*7 services to the consumers, the company has
established new call centres (Kalathinkal and Ahmed 2015). In order to cope up with the rapid
advancement in technology, Oman Oil Company has decided to implement latest technologies
that can enhance their consumer service and in turn, enhance the consumer loyalty of the
company.

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Conclusion
From the above discussion, it can be concluded that being one of the most popular oil companies
in Oman, the company has high brand equity in both local as well as global market. The
marketing and sales strategy of the Oman Oil Company is highly effective and have helped the
company to gain a competitive advantage in the global market. However, in this era of
modernization, the competitors of OCC are incorporating online marketing strategies to gain
more and more consumers. This trend should be followed by the company to ensure maintenance
of their brand equity. When it comes to the inbound as well as outbound logistics of the
company, the porter's value chain revealed that the logistics need to be improved in order to
ensure more productivity. The Oman oil company needs to enhance its supply chain visibility as
well as improve its compliance with the suppliers to enhance its inbound logistics. The value
chain analysis also revealed that the company has excellent consumer complaint service. Thus, it
can be stated that by improving its logistics, the Oman Oil company can gain one of the topmost
positions in global the oil and gas industry.
Recommendation
Improvement of Inbound and outbound logistics of OOC
Several factors like brand new markets, rapidly shifting geopolitical relationships an
extraction breakthrough are affecting the company negatively. The resulting volatility of the
market is compelling the oil and gas organizations including the mentioned company to
maximize the efficiency of their supply chain. Considering the fact that the Oman Oil Company
faces a high amount of logistic challenges both in the upstream and downstream spectrum, some
of the recommendations for the company to enhance its inbound logistics are as follows

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 Increment in the supply chain visibility: In order to cope up with the high cost of
downtime, the Oman Oil Company should reduce the expanses of supply inventories and
carrying slow moving parts (Kemp and Madsen 2014). For instance, the company has
lost several million dollars since the supply was not being able to meet the demand.
 Improvement in Compliance: Considering the fact that the Oil and gas industry has to
deal with the changing regulations along with innumerable numbers of complex import as
well as export requirements for multiple countries, it is highly crucial that the company is
well aware o the custom requirements (Rodriguez, Peterson and Krishnan 2012). Along
with that, in order to cope up with the rapidly changing rules and regulations of the
countries, the Oman Oil Company must use technologies in order to highlight the
documentation as well as the regulatory requirements before the occurrence of the
emergency. In order to eradicate the customs clearance bottom neck, the company must
leverage the same technology to manage the supply chain as well as the compliance
information.
Marketing Strategy for Oman Oil Company
In spite of the fact that the Oman Oil Company has an effective marketing strategy, the company
has recorded a decrement in revenue by 8 percent. Thus in order to gain a competitive advantage
in both local as well as international market, the Oman Oil Company should incorporate online
marketing policy in its marketing strategies. Internet marketing can be considered as one of the
best methods to ensure that the organization is able to reach out to a huge number of consumers
within a short range of time. The reasons for which online marketing and sales have been
recommended to the company are mentioned below:

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1. Competition: Considering the fact that the mentioned company faces a huge amount of
competition in both global as well as local market, by implementing internet marketing
strategies the Oman Oil company will be able to rank high in the search engine results for
keywords typed by consumers to find services associated with the OOC (Al-Shubiri
2015).
2. Online availability: To ensure effective marketing online, the mentioned company must
create, maintain and enhance its number of consumers as well as consumer loyalty. One
of the most effective online marketing strategies that can be considered by the Oman Oil
Company is social media marketing. For social media marketing, the company can
promote as well as market its products and services through popular social media
platforms like Facebook, LinkedIn and Snapchat. These social media platform will
enable the management of Oman Oil Company to directly communicate with the
consumers. This, in turn, enables the company to understand the specific needs of their
consumers which helps them to develop more consumer-specific products and services
(Kumar and Chandrakar 2012). Besides that, Social media platform will enable OOC to
promote their business to consumers who are not aware of the company’s product and
services. Thus the mentioned organization will be able to enhance their number of
consumers a well as their consumer loyalty.
3. Brand awareness: In this era of modernization, a majority of the competitors of the
Oman Oil Company has implanted online marketing strategies to enhance their brand
equity. If OOC builds its brand online, it will be able to inform its potential consumers
about the products as well as services of the company. In order to enhance its brand
awareness, the mentioned organizing should create its official webpage where all the

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information related to the products and services offered by OOC along with it terms and
policies will be enlisted (Rodriguez, Peterson and Krishnan 2012). Considering the fact
that the company’s official website determines its image to the consumers, OOC must
ensure that its official website is unique and different from its competitors.

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Reference Style:
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