Whoever let him loose?
‘Hulk’ing oil prices have gripped the world, and the problem isn’t rising consumption. karan mehrishi of 4PsB&M takes a closer look
What goes up must come down? How one wishes
this was as true for oil prices, which, besides defying gravity, have upset the budgetary calculations of millions of households across the world; not to mention bringing entire governments to their knees. When oil prices breached the $110 mark, analysts were of the opinion that prices would stabilise themselves as consumers would abstain from consumption as soon as they feel the pinch. Those analysts have been caught on the wrong barrel... er... foot, since oil prices are now touching $130, and a super spike to 200 is now considered possibile.
Even though some factions believed that a super spike, prices exceeding $200 per barrel, will be an eventuality, some analysts have a separate opinion. “I don’t think prices of crude will cross $200 per barrel simply because it’s too high. We are at the $120-130 range and consumers and governments have already started to contribute significantly,” says renowned oil expert Sebastian Mallaby, Fellow, Counsel on Foreign Relations (CFR), to 4Ps B&M.
However, there is still no respite from the reality of the impending oil shock and stakes are indeed high. According to Petro India’s Shantanu Saikia, “There is a fair amount of volatility, it all depends on what rice the demand-supply equilibrium is settled at. However, this is not a violent shock; prices can stabilise in 5-6 years, but it should be understood that this is an era of high oil prices.”
As a result, there is great insecurity among end consumers, who have found their money incomes depleted with respect to purchasing power. As per a survey by National Association of Convenience Stores, 45% of American consumers reported a decline in spending power due to rising petrol prices. While 19% wanted to buy more fuel efficient cars, an astonishing 13% had already reduced their driving on the back of $3/ gallon gasoline prices! As a result of earlier oil shocks, consumers have increasingly adapted an ‘aftermath attitude’ and eventual demands for automobiles have sagged significantly through out the world. A total of 38,214 hybrids were sold in the American market alone in March 2008, proof that these cars are now being perceived as a value proposition that’s beyond ‘fashion’.
‘Hulk’ing oil prices have gripped the world, and the problem isn’t rising consumption. karan mehrishi of 4PsB&M takes a closer look
What goes up must come down? How one wishes
this was as true for oil prices, which, besides defying gravity, have upset the budgetary calculations of millions of households across the world; not to mention bringing entire governments to their knees. When oil prices breached the $110 mark, analysts were of the opinion that prices would stabilise themselves as consumers would abstain from consumption as soon as they feel the pinch. Those analysts have been caught on the wrong barrel... er... foot, since oil prices are now touching $130, and a super spike to 200 is now considered possibile.Even though some factions believed that a super spike, prices exceeding $200 per barrel, will be an eventuality, some analysts have a separate opinion. “I don’t think prices of crude will cross $200 per barrel simply because it’s too high. We are at the $120-130 range and consumers and governments have already started to contribute significantly,” says renowned oil expert Sebastian Mallaby, Fellow, Counsel on Foreign Relations (CFR), to 4Ps B&M.
However, there is still no respite from the reality of the impending oil shock and stakes are indeed high. According to Petro India’s Shantanu Saikia, “There is a fair amount of volatility, it all depends on what rice the demand-supply equilibrium is settled at. However, this is not a violent shock; prices can stabilise in 5-6 years, but it should be understood that this is an era of high oil prices.”
As a result, there is great insecurity among end consumers, who have found their money incomes depleted with respect to purchasing power. As per a survey by National Association of Convenience Stores, 45% of American consumers reported a decline in spending power due to rising petrol prices. While 19% wanted to buy more fuel efficient cars, an astonishing 13% had already reduced their driving on the back of $3/ gallon gasoline prices! As a result of earlier oil shocks, consumers have increasingly adapted an ‘aftermath attitude’ and eventual demands for automobiles have sagged significantly through out the world. A total of 38,214 hybrids were sold in the American market alone in March 2008, proof that these cars are now being perceived as a value proposition that’s beyond ‘fashion’.
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
Top Articles on IIPM:-
IIPM makes business education truly global-Education-The Times of ...
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
IIPM ranked No. 1 B-school in India- Zee Business Survey ...
IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...
domain-b.com : IIPM ranked ahead of IIMs
and (almost) all in corporate America during 2007, even if we consider the consumer spending control measures adopted by consumers in America during 2007, even if we consider the correction of financial markets the world over, even if… Well, we could go on and on with the anguishes of woebegone America Inc. but one thing holds – holding onto the Fortune top spot for 6 years (out of the past 7) isn’t easy. “Easy” would rather be a weak expression when we refer to the top 500 US corporations (in terms of revenues), supposedly masters in the money-making business.
is despite the fact that China, the undisputed master of the pricing game, doesn’t account for much in the global pharma sweepstakes. “In generics space, the competition from Chinese counterparts is currently limited to the API space. Hence currently the pricing pressure is limited only to the API space, while the formulation space is still dominated by the Indian companies. However, Chinese players can increase the level of competition in the formulation space anytime soon,” prophesies Sarabjit. And even though they are enjoying their day in the sun, these firms still lack the financial and R&D muscle of the global Big Pharma – indeed their final destination. Thus, in this scenario, consolidation happens to be real churner for them. “ R&D is a high risk activity requiring large scale funding & a strong talent pool to bring a drug to market. All these factors are likely to prompt a consolidation in the industry. And as the industry matures, it is bound to happen,” Sujay Shetty, Associate Director, Financial Advisory Services Pharma & LifeSciences, PwC shares with 4Ps B&M.
s picturesque. However there is a price to be paid for it as there are a lot of hardships which need to be addressed tactfully. Challenge one: More and more players are planning an entry into the world of online travel booking, with existing giants like Kuoni India & Thomas Cook rolling out travel portals soon. Challenge two: The dependence of industry on air-services needs to be reduced as budget airlines time & again threaten to reduce commissions which in-turn affect their bottom-lines.