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Paper is for Marathon Oil Company relies on international trade to reach consumers in different parts of the world

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Marathon Oil Company

Introduction

The marathon oil company relies on international trade to reach consumers in different parts of the world. The organization is exposed to developments in the global economy. In the 2007-2008, global financial crisis, Marathon Oil Company was adversely affected at the global, interstate, domestic and individual level. In this paper, the experience will be reviewed with the aim of identifying effective mitigation measures that can be implemented to ensure that the organization is adequately prepared for future crises.

Global Level

The 2007-2008 financial crises had an adverse effect on the international economy. The economic crisis made it difficult for organizations such as Marathon Oil Company to access credit. As a result, expansion plans were postponed. The international economy was characterized by a significant decrease in demand. The demand for oil and oil products reduced as the car industry faced a tremendous recession. The oil industry in the world was forced to contend with a decrease in oil prices. The decrease in demand in the United States and Europe was a significant blow to oil companies that sell to consumers in these key markets. In addition, governments embraced nationalistic tendencies in response to the concerns of their voters. Some countries started being hostile towards big corporations and foreign companies that were perceived to be responsible for the global financial crisis. The development was bad for international trade as organizations were forced to contend with a hostile business environment away from home. Most countries experienced significant decline in exports and imports. In spite of this general decrease in demand, a few countries in South East Asia and Africa experienced a modest increase in demand.

Interstate level

The global recession created instability in the relationships between countries. Some countries engaged in activities that triggered a trade war. The approach made it difficult for multinationals to get into protected markets. For instance, a few countries imposed higher taxes on foreign companies. The approach was meant to bolster domestic production, but it had an adverse effect on multinational companies. Furthermore, many countries revised their regulations to reflect the moods of the people. The approach had a negative impact on the business community because of a decrease in the movement of goods. The ease of doing business in many markets became difficult. It is important to appreciate the impact of the 2007-2008 global economic recessions on interstate trade. Besides resulting in a decline in supply, it exposed fault lines in existing trade agreements. The adverse reaction of the public to international trade also contributed towards a difficult business environment for multinational companies such as the Marathon Oil Company.

Domestic Level

The most significant and consequential impact of the 2007-2008 economic recession was the laying off of workers that started. Individuals lost their jobs as organizations were forced to embrace cost-cutting measures in order to survive. The actions resulted elicited negative reactions from domestic interests. Although everyone understood that the economy was bad, stakeholders viewed big companies as agents of the problem as opposed to being victims. The ensuing regulatory changes aimed at big corporations. In addition, big oil companies were attacked as people combined their anxiety over climate change with the economic recession. Public leaders came under intense pressure to raise corporation taxes. The economic recession cast a big gap between the business community and consumers. The hostility that emerged has had a negative impact on the business environment.

Individual Level

Organizations such as Marathon Oil Company became easy targets for politicians and their supporters. Regulations and policies were passed that made the business environment even more difficult for companies. The ensuing bank reforms in the United States and Europe also slowed the demand it difficult for companies to access affordable credit from their financiers. The adverse reaction of members of the public caused a significant change in the strategies of organizations. For instance, some companies were forced to scale back operations in key countries or close them altogether. In addition, companies were forced to spend a lot in lobbying for favorable outcomes in the ongoing bid to remake the global financial system. The blowback against the business community also resulted in increased scrutiny into how organizations were being managed. The developments had an adverse effect on the business environment and they contributed to the creation of a business environment that is unresponsive to the needs of consumers.

In spite of these adverse developments, some organizations enjoyed positive ratings from consumers. Everyone understood that the global economic recession was having a negative impact on all the stakeholders. Consequently, those organizations that demonstrated empathy and sought to communicate effectively with consumers enjoyed high levels of public support. Furthermore, individual organizations were forced to rethink their operations and to adopt a more prudent approach in the management of their fiscal resources. For Marathon Oil Company, the organization sought to enhance its resilience and agility in an evolving business climate. All organizations recognized that the transformations that had occurred in the business environment would result in a new competitive environment. 

Recommendations

Marathon Oil Company should ensure that it has substantial cash reserves and alternative investments that it can use to bolster its operations during an economic recession. It is clear that the organization needs to ensure that it is prepared for an emergency. If it had cash reserves during the 2007-2008 recessions, it could have invested in the acquisition of cheap oil products that would have been sold at a profit when the economy improved.

The second strategy involves having a strong multinational presence in a wide range of markets. Marathon Oil Company can achieve a lot of economic growth and prosperity if it manages to create a robust presence in both emerging and developed countries. The countries that experienced a modest increase in demand for exports and imports would have enabled the Marathon oil company to offset adverse developments in its key markets. The company has demonstrated the ability to reach consumers in different parts of the world. As a result, it should have a presence in multiple markets.

The last strategy involves diversification. The 2007-2008 economic recessions exposed the vulnerability of the oil industry to global disruptions. It also accelerated the demand for renewable energy as policy makers looked for cheaper sources of power as they sought to stimulate the local economy. The approach has played a critical role in creating a business environment in which Marathon oil company may be unable to overcome a future economic recession. As a result, it is important for the organization to ensure that it invests in renewable energy. Although the approach seems to be counterintuitive, it is critical for the sustainable development of the company, to ensure that it has a stake in the future of the energy sector. The approach will give it the resources and portfolio to weather a future economic storm.

Conclusion

In conclusion, it is clear that the 2007-2008 economic crises created an adverse business environment. It resulted in a decrease in economic activity and turned consumers against big companies. It also led to the loss of employment for a lot of people. As a result, it is important for Marathon Oil Company to embrace diversification, expansion and financial prudence in preparing for future global crises.

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