Week4: Internet Exercise
The2010 BP oil spill is one of the most devastating manmade disasters inthe oil industry. The disaster resulted to a spill of about 200,000gallons a day of oil into the Gulf of Mexico causing a huge financialimpact. The disaster significantly impacted the physical andfinancial supply chain.
TheGulf Coast produces between 50 and 70 percent of sea foods in theUnited States (Inman,2013).The oil spill therefore led to a crisis in the sea food business forprocessers, restaurants and grocers. They had to find new suppliersas far as from countries like Japan and China. This meant that theyhad to part with more in terms of prices due to the physicaldistance. In addition, there were delays in shipment as theprocurements had to be rescheduled. When the costs go high, thesellers must ensure that they do not shrink their profit margin,hence these costs were passed on to consumers (Inman,2013).The buyers therefore had to communicate the situation and its effectsto consumers including expected delays, shortages as well asincreased prices.
Thecost estimated cost of the oil spill could exceed $300 billion. Thisimpacted the oil prices globally as BP is one of the largest oilsuppliers in the world (Benn,Dunphy & Griffiths, 2014).The rise in oil prices was partly due to the shortage that wascreated as well as the losses that were passed on to consumers.Nevertheless, the hard hit group was not the huge companies butregional and small companies depending on Gulf Coast seafood businessincluding shrimpers, fishermen and their families.
Benn,S., Dunphy, D., & Griffiths, A. (2014). Organizationalchange for corporate sustainability.Routledge.
Inman,G. T. (2013). British Petroleum’s Crisis Communication: The Studyof the Deepwater Horizon Oil Spill.