Development in trading activities
Trading companies in the world are using different types of tactics in improving their trading activities for them to gain more profit. In Oman, a territory in the Arabs, several companies have been born which handles different trading activities. One of them is the Oman Oil Marketing company which is involved in the marketing and distribution of fuel and lubricant products across the globe. This company was developed in 1996 by the government of Oman, in its headquarters in Muscat, Oman. How does the Oman Oil Marketing company market and distribute its products?
The Oman Oil Company is a national and not a private company. It has invested in over 60 projects across a minimum of 15 countries. The company is managed by the board of directors chaired by Mohammed Al, the Oman Minister of Oil and Gas. The company has some policies which help them grow and for the fluent running of the company. They have been applied in recent years unless it was stated otherwise. The Oman company has been successful in its operation since its formation despite some of the challenges they face. One of the achievements of the company is that it protects the environment by ensuring that the production of fuel and its products does not pollute and affect the environment. There have been very minimal numbers of injuries attained in the company. This is due to the company’s quality measures provided by the company. The graph below was provided by the NCB in 2018, it shows how injuries vary in the company
The company also allows members to express their ideas about how the company should be developed. This has helped the company develop new measures on how to improve its marketing ability. Customers are also attracted to their products because the company provides safety measures for them and also provide reliable and accessible prices.
Statistics about company profits have been good generally for the past five years. It was only in 2016 that the company got a lower income from the business. All these other years the company has been receiving a good profit and this was even better in the past year. According to oil and gas 2019, there was a rise of 2.1 percent which reached the Omani Riyals as compared to the past year in the same quarter. The fuel products also rose by 1.9 percent as compared to 2018. Rising in the value of oil and its products in today’s economy has been the main reason for the development of the company. The value of gas production increased by 5.6 percent from the year 2018 to 2019. Due to the increasing oil output in the company, the PDO has gained the confidence to announce an increase of 670, 000 b/d in the coming five years in the oil capacity. “The company has developed a project which is expected to deliver 60,000 oil and 212m cu ft./d of gas.” (OIL & GAS, 2019). The rise of fuel value has also impacted the minimal costs for producing fuel hence making the company gain more revenue. The company has been gaining more profit annually in the following years. The company is also expected to make a profit of 20% to 25% in the year 2020.
They are also some important factors that affect the company and they consist of social, economic, and technological aspects. The Oman oil company has a good relationship with their neighbors and customers. Their friends promote their products nationally and internationally helping their company grow. They may be a disadvantage of having too many friends as some of them may ask for favors which could impact the company negatively; this becomes a challenge to the company. Population growth across the globe also increases the need for more fuel hence increasing the company’s income. An increase in birth rate goes directly proportionally with the increase of several consumers. The Oman Oil Company chose a good environment for the trading of the oil and its products; this makes the products to be easily accessible to its customers. A good security network and online platforms of the company have increased their gained them fame and trust in the world. The need of the government to take the risk and invest more in the Oil Company has made the company to achieve the goal and discover better ways of improving their trading activities.
The Oman Oil Company balances the prices of their products when there are economic fluctuations. This makes their product more accessible and reliable. Mobile apps can be used to improve business because it’s cheap and accessible; this has been used by the company in their business. The use of machines and computers by the company has made work easier since work is made simple, tasks like record keeping and management and storage of oil are easily executed. The programs created to be used by the users and the employees. This keeps information for a long time and also keeps the information about their company and consumers private. This also increases employees’ productivity and there collaboration hence making the company grow.
Business activities face both positive and negative impacts. This can be illustrated in the Gulf Cooperation Council, a union in the Arab States; all their members are monarchy including Qatar, Kuwait, and Bahrain. The table below shows the comparisons of the business environment of the GCC member countries;
| Qatar | Saudi Arabia | Kuwait | Bahrain | Oman | The United Arab Emirates |
| Zero percent taxations on exports | Good health care and educational system | Exchange rate advantages due to the value of the currency | No exchange control | Future-oriented economy | Protection of the interests of foreigners business |
| Good telecommunications infrastructure | Good security systems in the country | It imposes no taxation tax to investors | Zero restrictions on capital and profit repatriation | Ability to obtain free interest loans | The easy financial reporting system |
| A better environment for international and conference venues | Good tourist attraction center | Foreign investors can take 100% ownership of the company e.g. in infrastructure | They are no VAT and other sales taxes | Has the same legal rights as the nationalists | No income tax for business owners and their employees |
| Procedure for recruiting employees is simple | Capital choices depending on the type of lifestyle | Agency agreements are signed quickly for multi-national corporations | No personal taxation | No tariffs on Oman-US trade | No income tax on the gained profit |
| Foreign companies enjoy a corporate tax | Ease of doing business as there is a good attitude towards foreign capital | It is strategically located in an area of economies hence attractive for investors | Good developed infrastructure and communication | No corporate income tax | Good geographical location |
| Foreign investors can use foreign currency in full repatriation of capital and profits overseas | Investors are not held liable for significant income tax | The stable and robust financial system | Free access to Gulf Cooperation Council | No customs duties on the import of raw materials for the manufacturing process | There is a rapid pace of development |
| Delays in payment | UK largest trading partner in the middle east | Depends largely on its oil sales | The physical business address is required which can be quite expensive | Not fully relieved from taxes | No branch offices |
| Increased levels of bureaucracy | Finding an appropriate partner in the market is a challenge | Too closed foreign investment due to restrictions by the government | The legal system may be biased | Harder to recruit foreign talents | Less access to bank accounts |
| World-class international airport |
Table 1
The countries in GCC all have political stability because they have good relationships with their neighbors and other countries in the world; this has made them focus on a similar goal which is development. This increases the security within the region hence a good environment for business. The countries are strategically located near other economists like Turkey which makes them get new business partners and also to market their products efficiently. Natural resources are abundant for starting a business in the countries. Taxation burden is not felt by most of the traders who invest in countries in the union. There are medical and insurance services provided for foreign countries by the members. Most of the countries in the organization have a well-developed transport and communication system which increases the efficiency of the business. Other countries like the UAE have good international airports which are huge which help in the import and export of their products. There is the freedom to transfer capital and profit. The currencies used by the members are fixed and strong. Historical sites and sand beaches attract tourists and to the countries hence improving their trade. The members provide a good environment and opportunities for the investors to invest in their country hence the growth in the economy.
Members of the GCC are also members of other organizations; the rules of these other organizations may not be the same as that of the GCC hence mixed reactions from the countries. Another weakness among the members is that cultural restrictions are very strict and also religious discrimination is very high especially in Saudi Arabia. In Qatar, it is prohibited for foreigners to invest in the sectors of banking, Insurance, Commercial Agencies, and Real Estate which in turn weakens the economy of the country. In UAE, reserves of oil may not last for long and therefore diversification of the economy has to take place at a fast and efficient rate.
In the business expansion in the GCC, I would consider working as a CEO in Qatar. Qatar is a recreational center hence visited by many tourists annually. A hotel business will be good since tourists can make camp at the hotel for the time they are in the country. No religious fight as the Islamic religion is more welcoming to other religions hence more secure. There are world-class transport and communications facilities in Qatar; this makes it possible to transport products and to deliver services more easily. There are world-class exhibitions that can attract people in Qatar and international events together with meetings that require hotel services to be handled. Sports activities in the country attract spectators to the country, who take camp in hotels during sporting activities. Attracting more people to the services of my hotel will increase profit hence making the hotel grow gradually.
References
Cave, B. (1999). Business laws of the Middle East. The Hague: Kluwer Law International.
Kuwait., & Karam, N. H. (1989). Business laws of Kuwait. London: Graham & Trotman.
Saudi Arabia., & Karam, N. H. (1990). Business laws of Saudi Arabia. London: Graham & Trotman.
Sheil, D. E., & American Bar Association. (1991). Report of the delegation to the Middle East: Legal challenges facing Saudi Arabia, Bahrain, and Kuwait. Chicago, Ill: American Bar Association.
Walkesha Country Technical College. (2000). International bussiness etiquette: Doing bussiness in the middle east. Pewaukee, Wisconsin: Insight Media.
Walkesha Country Technical College. (2000). International bussiness etiquette: Doing bussiness in the middle east. Pewaukee, Wisconsin: Insight Media.
Zanatta, M., & Queiroz, S. (January 01, 2007). The Role of National Policies on the Attraction and Promotion of MNEs’ R&;D Activities in Developing Countries. International Review of Applied Economics, 21, 3, 419-435.