Angola and the Resource Curse Harvard Case Solution & Analysis

Challenges faced by the companies in Oil Industry

Angola

Any new company entering in Africa to actually set up a business will most definitely face quite rigorous and stiff challenges regarding various aspects. The most common problem which any company might face specially the oil company will be the corruption at all levels in Angola. The country has actually been jolted with the indifferent business opportunities in the country. Along with this it is a fact that; Angolan market is quite a challenging one.

The most obvious risk in doing business in oil industry of the country is due to diligence and obligations at governmental level. bribery is a main problem in the oil industry of Angola. In spite of fulfilling all rules and regulations required to set up in oil industry, still the company has to pay bribe and illegal money to the concerned authorities to actually setup and start a business in the country. Another major challenge which a company entering in the oil industry of Angola will most definitely face is the problem of having to partnership with a localinvestor. This is a common method of doing business in oil sector of the country which is not seen as a positive move by the foreign investors. They believe the local will not work with the required dedication and commitment(J. Graf, 2006).

To overcome the above discussed challenges faced by oil companies, investor needs to keep astrict check and balance through the higher authorizes over the company once entering in Angola. It is a fact, that Angola is one of the fastest growing economies of the world. It is just the fact that no ample attention has been given. Moving into the future, the company needs to standardize the business terms and conditions in this part of the world. Along with this, developing a partnership with a local rather than local firm in the similarly industry will be rather a swift move. Each of the oil company looking to enter Angola should directly develop relationship with the local to bring in the investors so that theycan actually work in Angola and be the reason of its oil and petroleum industry’sgrowth.

Brazil

Brazil is one of the largest and the most diverse economies which have offered United States companies with the opportunity to form partnerships and to help them in exporting goods and services. Regarding the oil and petroleum industry, any company entering in this industry will the challenge of dealing with the indirect cost. In Brazil the indirect cost is often related to the governmentallaws, distribution, taxes, etc. all these added expenses add to the increased amount of investment in oil industry of the country. The legal system and the tariffs are also quite high in this part of the world (Cowley, 2010).

To overcome these challenges, company wintering in the oil industry of Brazil need to understand that the oil industry has quite a significant growth prospect in the sector. The support of government in the oil industry is going to help more international investors to come in and work in the local atmosphere, while hiring localsas the skilled labor. Along with this, since the Olympics will come to Brazil the economy is all set to grow and expand. New oil companies can come in and invest because eventually during this period many foreigners and tourist will want to come in this company and ask them to provide the complete necessary details of the business procedures. Along with this, the Brazilian oil industry will provide the best opportunity to the international firm, because it will help them export oil and similar bi products to the United States. This will increase revenue for the company, while also supporting the idea of not working (Sullivan, Arthur; 2003).

Ghana

The method of actually entering in the oil industry of Ghana is one of the most difficult tasks for any company. The main or the most obvious reason for this problem is the fact that the government rules and regulations are quite tough and does not provide any relief to the investors. Therefore entering and working in Ghana is always a challenging task for any company. This part of the world has been facing quite a challenge by the increasing corruption in the economy of the country. Investors have to pay amounts unrelated to the business and have to cater and handle these challenges quite regularly (Fobil, 2010)...................................

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