Pacific Oil Essay -- Business Analysis

The Pacific Oil Company was formed in 1902 and had been the leader in the manufacturing of a petroleum product Vinyl Chloride Monomer (VCM). This product was Pacific Oil's major product line and was the main component to the manufacturing of plastics, used in many products. In 1979, Pacific Oil had landed a major contract with reliant and had over the years establish a great working partnership. The Reliant Corporation was one of Pacific’s largest and most valued customers and Pacific Oil Company wanted to renegotiate their current contract with the Reliant Corporation, with the goal of extending before it expired. Pacific’s negotiation team, Jean Fontaine, Marketing Vice President for Europe with Paul Gaudin, Marketing Manager of VCM along with representatives Frederick Hauptmann, Senior Purchasing Manager and Egon Zinnser, Regional VP for European operation from The Reliant Corporation, where to spend nearly two year working through the extension of the contract. In the end, the contract settlement was down to a final item that Pacific was not happy about, that may my then loose the extension altogether. Facing Hard Times Pacific Oil company was facing some economic changes over the next 10 years and the demand for its VCM was going o face some fierce competition. In the next 20 - 30 months other VCM manufactures will be producing the raw product to compete directly with Pacific Oil Company. The supply of the product over the next decade was expected to grow by over 1000 MM pounds each year, nearly doubling that as each year progressed. This poses a massive threat to Pacific oil as it negotiates its contracts only five years our and is now being pressured by Reliant to only extend their contract by three years. Reliant was... ...ine and Gaudin was going to present. Reliant had done their homework on their demands, potential softness of the market and was preparing themselves adequately to be able to deal with any changes. Pacific was not as prepared at the negotiation table as Reliant, and was eventually backed into a corner on a single item in the renewed control, the option for Reliant to re-sale any VCM product they have left over. The was a major oversight on the final advice from Kelsey in securing a huge customer and giving them time in further analysis the demand and impact that the new manufacturers would cause. Reference Lewicki, R. J., Saunders, D. M., & Barry, B. (2010). Negotiation Readings, Exercises and Cases (6th ed.). New York, NY, US: McGraw-Hill. Lewicki, R. J., Saunders, D. M., & Barry, B. (2011). Essentials of Negotiation (5th ed.). New York, NY, US: McGraw-Hill.