Two weeks ago it was Egypt. This week it is Libya. Who knows where the unrest will be in the future. One thing is certain – the political situation in the Middle East is definitely unstable. Predictions about oil supply and pricing are equally unstable. Few will argue that oil drives the world economy and any interruption in supply will drive prices – all of them – up.

QUESTIONS:

1. What forces in the general environment come into play with the unrest in the Middle East and its potential effect on oil prices?
2. Events in Egypt and Libya are thousands of miles away. In terms of competitive advantage and strategic positioning, discuss why businesses in your region must be concerned.
3. Examine Figure 3.3 in your text. Which quadrant best characterizes the current level of uncertainty regarding oil? Why?
4. Examine Figure 8.2 in your text. Where does the current oil situation come into play in the strategic management process? How would a company assess its impact?
5. Pick a company with which you are familiar. Conduct a quick SWOT analysis and be sure to include your prediction about what is likely to happen with oil availability/pricing. Which element of the analysis does the oil situation represent? How would you advise your company to respond?

SOURCE: B. Milner & B. McKenna, “Oil’s Next Danger Zones,” Globe and Mail (Retrievable online at http://www.theglobeandmail.com/report-on-business/economy/oils-next-danger-zones/article1921789/)

See related video at: http://www.theglobeandmail.com/report-on-business/video/how-will-oil-prices-affect-the-economy/article1920267/