HPCL Indian Oil Company: Overcoming Challenges | Free Essay Example

HPCL Indian Oil Company: Overcoming Challenges

Words: 614
Topic: Business & Economics

Identifying the problems that a company may face in the environment of the global economy is essential for developing a sustainable approach and becoming successful in the target market. The specified task is especially complicated for Indian organizations, which have to manage a variety of unique obstacles that the Indian geographic, political and economic issues pose.

For instance, it should be noted that operating in the environment of the Indian economy is a rather tricky task, as the state can be characterized by rather unique economic, political and financial actors.

To be more exact, Indian entrepreneurships have to address a variety of logistics-related issues, such as the need to use maritime transportation as the cheapest method of transporting raw materials and goods in spite of the deadline problems that the specified mode of transportation presupposes (Kumar, 2008). Nevertheless, the development of a sustainable approach allowing for a significant improvement of a company’s performance, especially in the oil industry, as the example of HPCL (Kumar, 2008) shows.

The company in question displays quite clearly that the distribution process seems to be the most complicated issue as far as the logistics department is concerned (Kumar, 2008). The reasons for the phenomenon in question are quite obvious, as the firm needs to establish a global supply chain and, therefore, come up with the design that will incorporate a cost-efficient saving strategy, thus, making room for a reasonable allocation of costs and use of the resources at hand.

Comparing the specified challenges to the ones that an American oil company, such as Chevron, has, one must admit that the logistics issues are much more complicated in the latter case. The transportation of the end product across the ocean is fraught with a variety of negative environmental implications, particularly, an oil spill and the following environmental problems that it is bound to cause.

Additionally, the transportation of oil with the help of maritime services is far more lengthy than the traditional one (Kumar, 2008) and, thus, presupposes more challenges in terms of meeting deadlines. Hence, it can be assumed that, on a general level, the Indian organization has more opportunities to thrive in the designated niche than a similar American organization.

However, when it comes to the analysis of the unique characteristics of the Indian economy and the effects that it has on the development of the entrepreneurships operating in the oil industry, one must admit that the specified setting pose a range of obstacles in the way of the company’s development.

For instance, unlike the American Chevron, which can carry out its primary logistics-related transactions freely, oil organizations in India are forced to work in the environment that has only recently been introduced to legal changes allowing for business operations, as opposed to HPCL.

Particularly, the corresponding reforms were only made about twenty years ago (Desai, 2008), which means that the basic economic obstacles may still remain in the company’s way to success. For example, the reforms such as the International Trade Law (Desai, 2008) affect the oil corporations in India to a considerable extent, preventing the latter from increasing their revenues.

Regardless of the fact that the Indian government does not provide enough room for the Indian oil businesses to evolve and prosper, the latter still manage to thrive in the specified environment quite successfully. As the example of HPCL shows, the existing economic options, such as using the help of a partner by sharing liabilities, locating a cost-efficient approach to resources use, etc. will help thrive in the challenging environment.

Though HPCL may not have the advantages that similar American companies have, it still defines its own unique pattern of operating in the global economy realm.

Reference List

Desai, N. (2008). International Trade Law: The Indian perspective. International Journal of Legal Information, 36(2), 351-363.

Kumar, S. (2008). HPCL improves distribution efficiency with Honeywell’s supply chain solution. Web.