Pacific Oil Company: Problem Description

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Pacific Oil Company Problem Description Pacific Oil is a company that supplies crude oil to the various industries in North American and Europe via their pipeline system. Reliant Chemical is a chemical refining company that produces a form of plastic and utilizes petroleum from Pacific Oil to produce their plastic. The two companies had a long-standing business relationship since their first contract in 1979. Currently, the company's agreement still has two years remaining, but the two companies are entering into negotiations for the renewed contract. Pacific Oil assumes it will be a standard contract negotiation; however, Reliant Chemical has other plans due to the instability of the plastic market. The primary concern of Pacific Oil entering into the negotiation was that there were now numerous other oil companies who were seeking to compete with Pacific Oil and offer petroleum to plastic manufacturers. With this in mind, Pacific is concerned that Reliant will not be willing to renew the contract without requiring a lower price and other potential concessions on the part of Pacific that could result in serious losses to the company. On the other hand, the company is also concerned that should they lose this contract, it would take a great deal of effort to obtain sufficient new contracts. Negotiation Styles Fontaine is the European marketing vice president for Pacific Oil. He's been with the company for 11 years and has a solid reputation when it comes to market

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