SUBMITTED TO:- PROF.

RUPAL CHOUDHARI

SUBMITTED BY:-
ANURAG TIWARI
GOPENDRA PATNAYAK
BHAGWAN SINGH PATEL
Indian Oil Corporation
Major Oil refining and Marketing Company
Canalizing agency for oil imports
Only Indian Company to be in Fortune 500, that planned a
foray (an initial venture) by acquiring a stake in the Balal oil
field in Iran.
INTRODUCTION

Oil prices were the lowest ($11 per barrel) in October 1998,
when IOC started talking to Iranian company for acquisition.

Due to falling margins, many refining companies were closing
their shops.

Number of good oil properties in the Middle East were up for
sale.


IOC needed Governments' permission to invest abroad.

When the government gave the clearance for acquisition in December
1999, prices bounced back to $24.

Elf of France had already took away the deal from IOCs nose by
acquiring premium oil.

RBI gave approval of Rs 15 million investment, and it took more than
a year for clearing the deal.

INTERNAL ENVIRONMENT

Major oil refining & marketing Co.
Canalizing agency for oil import
Only Indian Co. in Fortune 500
Compulsion to refer matters to government
Q1. Discuss the internal, domestic & global
environment of business revealed by this case
Demand more than supply
Decision making process is very slow which leads to loss of
time, money, opportunity
More levels of clearances for investment approval
India should already have a policy to avoid unnecessary
delay
Inability to predict future opportunities


DOMESTIC
ENVIRONMENT

CUSTOMERS ASPECT
Demand for oil increased
SUPPLIERS ASPECT
Restricted supply
COMPANIES ASPECT
Competition
Better government regulations and faster implications
Flexible policies of Elf
Price is controlled by OPEC

GLOBAL ENVIRONMENT
The cost of acquiring the company would have more than
doubled ; because in that duration of only one year the oil
prices had rose from $11 to $ 24.

Q2-Even if Elf had not acquired Premium Oil, what would
have been the impact of the delay in the clearance on IOC ?
Its the domestic environment that hinders the
globalization of Indian business.
Reasons:
1)Faulty policies
2)Lack of efficiency in implementation of policies.
3)Slow process

Q3.Discuss whether it is domestic or global environment that
hinders the globalization of Indian business.
Adequate availability of Oil
Foreign Currency In India
Less Dependency on other Countries
Control on fluctuation of Oil Prices

Q.4- What would have been the significance of the foreign
acquisition to IOC?
Causes of delay-
Slow Decision Making
process results in loosing an
opportunity.
Review of application by
many authorities
Inability to predict future
business opportunities.
Lessons-
Time limit should be there for
decision making.
One decision making authority
should be there.
Prediction of future opportunities
in advance to avoid delay.
Q.5- What are the lessons of this case?
THANK YOU