Category: Supply and Demand

Smartphones market is a good example to show that the advances in technology that can reduce the input cost of production easily by shifts in a supply curve. In this 21st century, technology became advances that can improve the efficiency of production and this will cause the supply curve shift to the right. The lower the cost of production goes will affect the consumer demand more smartphones at the lower price.

Based on my research from Evalueserva, Nokia, one of the famous smartphones or largest smartphones manufacturer has fall its average selling prices about 39% from 2005 to 2009. So, the manufacturers keep trying their best to produce a good quality of their smartphones and lower the cost of production to let their average selling price increase as much as it can.

Based on the information, I had made out a conclude that consumer can purchase more smartphones at a lower price and this will cause the supply curve shift to the right. Smartphones that cost several thousand dollars a few years ago and nowadays can be purchased at a few hundred dollars, and the storage and the speed of the processor are almost the same with the new phone which cost thousand dollars.

Changes in smartphones market can affect the demand of smartphones or can affect the demand for the product that are related. So, smartphones market will keep increase the demand for a new product and this will cause the older products become obsolete.

Going back to the example of how they affected the supplies and prices of smartphones. Nowadays, our technology became more advanced than before so that technology also created a market for smartphones which the performance is almost the same compared with the older smartphones. The new smartphones size is smaller but full screen, camera is clearer and the most important are the price are almost the same compared with the older one.

As a result, the demand for the older smartphones has been reduced because of the new smartphones. In smartphones market, technology in advance constantly changing the landscape with the new products and eliminate the older products. So, manufacturers continue their main mission to let their technology became more advanced, the demand and supply for products are always changing by the consumers’ taste.

In a nutshell, the elasticity in economy helps smartphones market or supplier to understand the needs of consumers, taste of consumers. They also can build a good relationship with the consumers by having a connection or interact with consumers. In conclusion, technology became more advanced, it is impossible to monopolize a market for a long period. As a market breaks down from a monopoly into different market structures, The pricing of a product is the key to obtain bigger market shares.

The demand for OSVs is strongly connected to the number of rigs employed by the exploration and production companies. The demand for certain specialized OSVs may be driven by factors other than the oil prices, but those are the exception rather than the rule. According to Clarksons Research, since the oil price slump, rates for rig have fallen more than 50% furthermore 300 rigs are laid up in June 2016 (Clarksons Research, 2016, pg. 9). As a result, this affected the OSV rates which have fallen by an average of 35% and reports state that there are as many as 1,400 OSVs laid up.

Too Many Vessels, Too Few Active Rigs

The two factors that drive revenue for OSV companies are offshore rig utilization and day rates. A study done by Clarksons Offshore Intelligence and AlixPartners analysis, the number of active offshore rigs is 33% lower than 2014 levels, declining to 474 in July 2018 from 706 in 2014. OSV day rates are 40% lower than in 2014 (Alixpartners.com, 2019). Other than the geopolitical factors and US oil infrastructure issues, abundant shale oil supplies in the near term and the impact of energy transition on oil demand in the medium-to-long term will likely serve as constraints on drilling a substantial number of new offshore wells.

By looking and analyzing these constant changes in the oil industry, the global OSV market seems currently oversupplied by about 1,150 vessels. About 900 vessels are 15 years or older which will have difficulty finding projects and could be retired, as newer vessels are more efficient, less costly, and more compliant with increased environmental regulations.

But there are factors preventing a reduction in the overall supply of vessels. Generally, the sector is fragmented, with the largest operators controlling 30% of the fleet and the remaining 70% controlled by 400 smaller operators with fleets of six or fewer vessels. Small operators have little incentive to retire any of their own fleets and are loathe to take action that would benefit the larger companies or the sector overall.

This decrease in demand has put the industry under significant financial pressure and the OSV operators have adopted strategy in response to the problem. The first reaction naturally will be of cost cutting, which has been taken. It is clear that operators in this area have studied carefully at their expenditure and reduced costs where possible. The next answer to many of the industry’s problems should be consolidation or mergers. However there have not yet seen major mergers or acquisitions in this sector. The below reviews the current state of the OSV market across the major regions

North Sea

The North Sea OSV sector is depressed, with supply exceeding demand, despite a few tenders becoming available in the market. Clarksons Platou expect 50 more OSVs to be laid up by year end with 2016 seeing the bottom of the market. The OSV owners operating in the North Sea are exploring opportunities in other markets both geographically and industry-wise. For example, it has been announced that Deep Sea Supply entered into a joint venture with Marine Harvest ASA which would build, own and operate aquaculture vessels.

Many of the OSV operators in the North Sea are also looking to raise finance. For example, it has been reported that Oslo-listed Solstad Offshore will receive USD 58.8 million in new liquidity from Aker ASA. This investment resulted in unexpected consequences for the Norwegian OSV industry.

West Africa

The OSV rates in West Africa remain low together with the overall reduced level of activity. Topaz Marine has reportedly cut its operations in the region by placing three vessels in Turkey whilst Oceaneering International has experienced early termination of an OSV contract by BP earlier in the year.

Tidewater, reportedly the operator of 93 vessels in West Africa, predicts a shift in investment focus towards natural gas in the region if oil prices remain at levels below US$40 per barrel. It seems that whilst existing oil projects are being completed future developments and resulting demand for supporting vessels will come from the gas projects.

US Gulf of Mexico

The OSV utilization rates in the US Gulf of Mexico fell dramatically in 2015 (below 60% compared to 80-90% prior to the fall in oil prices), which is to be expected given that the rig count in the US Gulf of Mexico decreased by over 25% between December 2014 to December 2015 according to AlixPartners.

Arabian Gulf

The Arabian Gulf is a special case in the global OSV outlook. The fact that companies like Saudi Aramco and ADNOC sustained their production levels benefited the local OSV market even though there may have been pressure put on rates. The rig count has declined only by about 5% between 2014 and 2015.

Tradewinds reported at the end of June 2016 that medium-size platform supply vessels (PSVs) saw an increase of USD 1,000 per day in May 2016 although the market overall remained flat. There were also reports of some 23 vessel contracts being awarded by Saudi Aramco in May 2016.

However, the influx of the OSV owners has created additional supply which is negatively affecting the rates.

Nevertheless, some owners managed to ride the wave. For example, Seatrade reports offshore contractor, GMS (Gulf Marine Services) as a good example of an Owner enjoying buoyant demand for its vessels. GMS is reportedly expanding its fleet and introducing a new class of mid-size vessels whilst others are focusing on surviving the depressed conditions.

To Consolidate or Not to Consolidate

Given the downturn affecting the OSV sector, many have predicted and advocated mergers or acquisitions as a solution to the industry’s problems. The rationale behind the consolidation strategy in an industry that is going through the difficult times is that companies that struggle to survive would benefit from the economies of scale by forming an alliance – the bigger the stronger. Consolidation helps to achieve greater efficiency and to reduce costs and overheads; it can give companies an opportunity for redeployment of the assets, expand their capability and gain access to larger projects and new strands of work.

Other sectors of the oilfield services industry, have shown more of an appetite towards significant mergers, the most notable would have been Halliburton and Baker Hughes.

However, this interest in consolidation has not been as active within the OSV sector. That is perhaps when AlixPartners consultants did a study of major OSV companies, it was found that more than half of those companies were headed toward bankruptcy unless they take measures. Swiber Offshore filing for liquidation at the end of July 2016 is a recent example of the perilous situation companies may find themselves in.

There to be a number of possible reasons for the lack of notable consolidations in the OSV sector. One reason is that the type of assets employed in the OSV industry varies greatly depending on the specialization of the particular operator and their area of operations. This complicates the task of finding a suitable company although it may also be seen by some as an opportunity to grow into a new sub-sector of services.

Another often quoted reason is that the offshore operators are often family-owned businesses who want to remain independent more than they want to be profitable. It is not easy to unite different business strategies and philosophies of the OSV operators where strong personalities are involved. It has also been said they are not experiencing pressure from the shareholders in the same way as other industries, which is usually one of the major drivers for consolidation. Additionally, it has been commented that banks are not putting pressures on the companies to realize the returns that were expected.

The recent acquisition of Rem Offshore by Aker shows that the decision can be soon taken out of the hands of the OSV operators. Having invested in Solstad, Oslo-listed Aker accumulated bonds issued by Rem Offshore and blocked the latter’s restructuring plan unless it agreed to merge with Solstad. Rem’s chairman has called Aker’s move hostile but other sources agree that it would ultimately benefit the Norwegian OSV sector.

The difficult and painful actions that are required now to become more cost-competitive and restructure balance sheets could create stronger world-class companies that can not only survive this crisis, but even thrive if the sector recovers.

References

1. Clarksons Research. (2016). Offshore – Page 9 – Clarksons Research. [online] Available at: https://clarksonsresearch.wordpress.com/category/offshore/page/9/ [Accessed 12 Nov. 2019].
2. Alixpartners.com. (2019). Offshore supply vessel companies face continued pressure | AlixPartners. [online] Available at: http://alixpartners.com/media-center/press-releases/offshore-supply-vessel-companies-face-continued-pressure-alixpartners-study/. [Accessed 12 Nov. 2019].
3. Howard, G. (2016). North Sea OSV lay-ups will rise 50% in 2016, broker predicts. [online] Lloyd’s List. Available at: https://www.lloydslist.com/ll/sector/ship-operations/article520592.ece [Accessed 12 Nov. 2019].
4. Riviera Maritime Media. (2019). OSV players venturing into new markets. [online] Available at: http://www.osjonline.com/news/view,osv-players-venturing-into-new-markets_42481.htm [Accessed 12 Nov. 2019].
5. Riviera Maritime Media. (2019). Another OSV operator looking outside of the sector. [online] Available at: http://www.osjonline.com/news/view,another-osv-operator-looking-outside-of-the-sector_43574.htm [Accessed 12 Nov. 2019].
6. Riviera Maritime Media. (2019). Investment expected to shift from oil to gas in West Africa. [online] Available at: http://www.osjonline.com/news/view,investment-expected-to-shift-from-oil-to-gas-in-west-africa_42199.htm [Accessed 12 Nov. 2019].
7. Professionalmariner.com. (2015). The Gulf’s offshore hiring boom comes to an abrupt end – Professional Mariner – May 2015. [online] Available at: http://www.professionalmariner.com/May-2015/The-Gulfs-offshore-hiring-boom-comes-to-an-abrupt-end/ [Accessed 12 Nov. 2019].
8. Alixpartners.com. (2019). Results-driven global consulting firm | AlixPartners. [online] Available at: http://www.alixpartners.com/en/Publications/AllArticles/tabid/635/articleType/ArticleView/articleId/1882/Oil-Price-Drop-Sinks-Offshore-Supply-Vessel-Market.aspx#sthash.GzvOwXs7.dpbs [Accessed 12 Nov. 2019].
9. TradeWinds | Latest shipping and maritime news. (2016). No hiding place for OSV owners amid global slowdown | TradeWinds. [online] Available at: http://www.tradewindsnews.com/weekly/766623/no-hiding-place-for-osv-owners-amid-global-slowdown [Accessed 12 Nov. 2019].
10. Regulation • Ports • Owners • Yards • Offshore • Classification • Marine Services Ready to step up. (n.d.). [online] Available at: https://mes.vdma.org/documents/106011/12126279/2_SMME%202016%20-%20Schiffahrtsbericht%20VAE%202015.pdf/401e30ec-fb2a-4326-9805-e101351d4252 [Accessed 12 Nov. 2019].
11. Tradewinds, 22 July 2016, page 24.

Much empirical research has been done on the efficacy of the theory of planned behavior with many findings showing that attitude, subjective norm and perceived behavioral control has positive correlation with behavioral intention for supply and demand of higher education. The theory of planned behavior can be used to explain the differences in behavioral intention and actual usage.

The theory of planned behavior (Ajzen l99l) explains that 3 types of beliefs (behavioral, normative, and control) influence an individual. Performance of the behavior requires cognitive evaluations that include a cost to benefit evaluation of attitude towards the behavior, how other people perceive the behavior, and the perceived self-control over the behavior. Beliefs come “from a variety of sources, such as personal experience, formal education, radio, newspapers, the Internet and other media, and interactions with friends and family” (Fishbein & Ajzen, 20l0). The probability of engaging in the behavior is determined by belief. The help determine if the behavior would be performed (Ajzen l99l) because beliefs form the cognitive basis from which behavior follows (Blank and Hennessy 20l2; Fishbein and Ajzen 2010; Yzer 2013).

The theory provides a better understanding of the relationship between the demand for higher education and the supply of appropriate certification with respects to its value in the market.

Supply and Demand in Higher Education Market: The Nigerian Scenario

Dawodu (2004) noted that the provision of schooling in Nigeria is largely provided and financed by government through the Ministry of education and provided at a highly subsidized cost of free of charge. However, due to unmet demand for education coupled with shrinking government budgets, the public sector in Nigeria has developed an innovative partnership with the private sector which encompasses a wide range of providers including for-profit schools (that operate as enterprises), religious schools, non-profit schools run by NGOs, and community owned schools. In other words, there is a market for higher education. The main rationale for Public-Private Partnership (PPP) programs is the potential role of the private sector for expanding equitable access and improving learning outcomes. In low-income countries like Nigeria excess demand for schooling results in private supply when the state cannot afford schooling for all. However, ‘differentiated’ demand leads to a demand for private schooling with a good reputation and record of good performance regardless of the higher school fees charged by these schools which is also creating a market gaps and limited choices among consumers of services by opting for educations with lower satisfaction rates.

Unbalanced Representations of the Supply and Demand in Nigerian Higher Education Market

Under the situation of college graduates’ employment marketization, the influence and limitation function of the market to higher education cannot be ignored any more. The supply and demand in Nigerian higher education market mainly represents the structured unbalance, and the conflict between the supply and the demand of the first higher education market gradually tends to decrease, but the conflict between the supply and the demand of the second higher education market is gradually increasing.

The conflict between the supply and the demand of the first higher education market is mainly represented by that the public’s total demand to higher education exceeds the total supply of higher education to some extent. Since Nigeria implemented the enrollment expansion in l999, the enrollment number of Nigerian colleges increases at the speed of about 20% each year. In 2002, the gross enrollment rate of Nigerian higher education achieved l5%, which indicated that Nigeria had formally entered into the popularization of higher education.

In 2005, the gross enrollment rate of higher education was 2l%, and the scale of higher education had been the first position in the world. In 2006, this number ascended to 22% (Wike, 2007). The ‘blowout’ growth of talent supply in Nigeria could make for the accumulation of human capitals, the enhancement of employees’ cultural and scientific quality, and the increase of the comprehensive strength, but on the other hand, the supply of Nigerian labor force has exceeded the demand, and the yearly growth of the urban unit employment post amount supplied for college students has far lagged than the growth amount of graduates, which induces the situation of the supply and demand to be reversed. The former seller’s market of higher education has completely turned into the buyer’s market, so college students’ difficult employments occur.

Strategies to Reduce the Unbalance of the Supply and Demand in Nigeria Higher Education Market

As a whole, the conflict that the supply exceeds the demand in the second market of Nigerian higher education has ascended to the main conflict. If this conflict continues, and many graduates cannot be employed, not only large numerous education investments of the country and the public will be wasted, but with the gradual accumulation of graduates, the social stability will be certainly impacted, which goes against the country, the society, and the individual.

How to achieve the balance between the total demand and the total supply of higher education? Extending the supply and adjusting the demand are required. First, the government investment, civil investment and education consumers’ investments should be increased, and the general higher education, private higher education, adult higher education, and vocational higher education should be developed largely to enhance the quality of education comprehensively. The modern information technology should be utilized to develop the remote education. The education system should be largely reformed to fully exert the function of existing education resources and extend the supply to exceed the growth of demand and gradually reduce the conflict of demand and supply.

Ever realized that there are a countless amount of brands for the same product? It’s how our economic system works. Supply and demand is the backbone of how the United States keeps its economic system functioning. When using the ideal supply and demand aspect it keeps the system running fairly. Associations routinely don’t raise their expenses despite when demand ascends since it is seen as being ridiculous. This is due to having the two basic laws of supply and demand. Therefore clients constantly put down progressively expensive rates on the off chance that they feel there is no security for it. Due to having supply and demand it creates a fair advantage for everyone to be in control of what they produce, it produces more job opportunities to have the economic system grow, and it gives the government enough omission to generate rules and regulations.

No matter what the name of the company is whether it has a well-known brand name or it’s considered ‘off-brand’ all companies that the same opportunity to create the incomparable products. A free market economy opens the door wide for advancement, which is outstandingly noteworthy for associations. Through this kind of economy, business visionaries can develop new things and organizations missing much mediation from the lawmaking body. They can make what they see is fit for the open reliant on customer demands and unmistakable examples. In that limit, they can give customers what they need. Having a market economy creates innovation in which companies have to compete to see who can create the best products for the best price. The achievement or disappointment of an item lies in the hands of clients. When they like it, they will request a greater amount of it. On the off chance that they don’t, at that point, there won’t be any commotion for it. This is best exhibited in items or administrations that are comparative. It’s quite clear which one is favored dependent on deals results. Clients additionally give the main factor with regards to valuing. Makers set a specific sum yet clients choose which one is best founded on quality and moderateness.

Furthermore, having the supply and demand concept keeps the economic system fair due to creating opportunities by providing those who are unemployed to a stable job. Similarly as the laws of free market activity influence the costs shoppers pay for products and ventures, they likewise influence the work showcase. Rather than straightforwardly managing buyer merchandise, the work showcase includes the connection between laborers and firms in the commercial center. Firms basically are the purchasers and people give the work or supply. Be that as it may, both go about as compensation takers; firms must take and pay the rates the market requests and specialists must acknowledge these wages for the work given. Firms need specialists to deliver merchandise for buyers. The measure of work requested by a firm relies upon a few components, including how much the work costs, as controlled by the market wage rate, and how much work the firm needs. To boost benefits, firms preferably need to employ more laborers at lower compensation. This makes a descending slanting interest bend as it identifies with work wage rates. As firms purchase up more work, wage rates decline. At the point when firms request and contract fewer specialists, compensation increment.

Eventually, the government is given enough omission to generate rules and regulations. The job of government is to guarantee that the business sectors are open and working. For instance, it is accountable for national barrier to ensure the business sectors. It likewise ensures that everybody has equivalent access to the business sectors. The administration punishes syndications that confine rivalry. It ensures nobody is controlling the business sectors and that everybody has equivalent access to data. With business left to private undertakings, the legislature can concentrate on the guideline of the market to improve monetary strength and the nation in general. At the point when accurately actualized, the administration’s approach choices may appear to be nonsensical to the interests of organizations at first, however, will really give more prominent security over the long haul. Besides, a blended economy takes into consideration a social security net that gives wellbeing to the general population who are hit hard by troublesome monetary occasions.

In conclusion, supply and demand are the backbones of how the United States continues to operate its economic system. It keeps the system running fairly when using the ideal supply and demand aspect. While displaying the concept of supply and demand it allows everyone in the system to have a fair advantage and be in control of what they produce, it creates more job opportunities to have the economic system grow, and it gives the government enough omission to generate rules and regulations.

Demand is the desire of a buyer which is accompanied by the ability to pay for a particular commodity at a specific price. On the other hand, if we talk about supply then supply is basically the quantity of the commodity that is made available to the consumers by the producers at a specified price. Demand and supply mainly have inverse relationship which states that when demand increases supply decreases and when supply increases demand decreases which is vise a versa.

Demand and Supply in Indian Railways

The future of Indian Railways depends on a large extend on how it meets up to the rising transport demand and the increasing pressure from competitive transportation models. It has been always seen that the demand of Indian Railways is always more than the railways could actually supply. Due to the increasing rate of population more and more people are adding up to the passenger segment of Indian Railways which is not duly met. As due to the growth of the country more and more people are engaged in work outside their hometown which forces them to travel through train twice a day in regular basis. The rise in demand can be easily pointed out in metro cities where the condition is really pathetic.

Though Indian Railways is planning to adopt some of the strategies like focus on increasing the rail capacity for passengers and freight, more electrification and remodeling more trains for short distance passenger traffic. The Railways is also trying to follow a strategy to meet the high unmet demand. As said by Pillai, “Building rail transport capacity has been a high time lag due to the long gestation period in building of the infrastructure projects and in land acquisition. So, the priority is given to argument the capacity of trunk routes”.

Passenger services in India take two third of rail capacity and the fright services take up the other one third. If we talk about revenue then the case is the reverse where fright accounts to two third of the revenue.

Focus on Freight

It is a high time now when fright traffic needs to be increased as said by Pillai. This is what needs to be focused on so that the railways could serve the economy better. The demand of rail fright movement is limitless and there is very less space for growth for all modes of transport like coastal shipping, air road transport and inland waterways.

As there is no shortage of demand so the challenge here is to keep a pace with the demand. The Railways is planning for two freight corridors which would make a lot of difference to coal and port traffic.

The other emphasis is to improve the short distance passenger traffic which should be improved by improving the short distance train which is also known as distributed power trains or mainline electric multiple units. Focus is also put on trains that accelerate and decelerate and also to electrification of trains.

Electrification

As said by our earlier Railway Board Chairman VK Yadav, Indian Railways needs to focus on electrification to meet up the electrification demand domestically and not by importing crude.

Demand Due to Touting and Black-Marketing

It has been seen that Indian Railways is now the only organization left in which touting and black marketing is still prevailing. It has been seen that Indian Railways is now only an organization in which quota system is still existing quota system has been eradicated from All the departments but still not from Indian Railways. Indian Railways has passed a very bad days and now it is the time to decide what measures should be taken for the elimination of black marketing in train ticketing. Black marketing in tickets is basically because of the disbalance between demand and supply. Now, this is the factor when a proper management of supply and demand is required demand is not very high that it cannot be managed in fact every person who wants to travel has to travel in one other way.

Steps That Can Be Taken to Manage Demand

1. There are various are special trains but they are not very popular with the regular passengers so measures should be taken so that not only the leftover passengers but everybody should travel by the special trains to reduce unnecessary crowd.
2. Indian Railways should do some home and marketing work to uplift all the trains and to bring them in an equal status.
3. Indian Railway should try to release the summer and winter and festival trains in advance looking up to the traffic of different directions.
4. Indian Railway need to run special train non-stop from one end to the other with very few commercial stoppages. Specially in Metro Areas where it is seen people hanging out of the trains as it is very crowded.
5. Indian Railway should provide facility for seat selection which is prevailing with international flights.
6. Reservation of booking of the special trains should start earlier than conventional trains and effort should be put to achieve minimum 95% passenger-kilometres of the total passenger-kilometre capacity.
7. The journey by special train should be make more enjoyable so that it attracts customers by providing freebies like water bottles magazine etc.

Demand of Indian Railways During Covid-19 Situation

With the Covid-19 rise in cases it has been seen that various states are demanding to supply around 960 isolation coaches to treat the patients. Not only due to the demand of isolation centers but demand has also gone up due to the to and foe movement of labors, migrant workers and other passengers who were travelling back home.

Railway activity is growing more than any other country with the movement of passengers reaching up to 40% of global movement stated in the ‘Future of Rail Report’. Railway activities have measured in billion passenger km which is amongst the highest in the world second only to China in passenger movement and forth in freight movements. Therefore, it can be seen that the demand for Indian Railways is huge and rail needs to work a lot upon this to balance up the demand and supply pattern.

Smartphones market is a good example to show that the advances in technology that can reduce the input cost of production easily by shifts in a supply curve. In this 21st century, technology became advances that can improve the efficiency of production and this will cause the supply curve shift to the right. The lower the cost of production goes will affect the consumer demand more smartphones at the lower price.

Based on my research from Evalueserva, Nokia, one of the famous smartphones or largest smartphones manufacturer has fall its average selling prices about 39% from 2005 to 2009. So, the manufacturers keep trying their best to produce a good quality of their smartphones and lower the cost of production to let their average selling price increase as much as it can.

Based on the information, I had made out a conclude that consumer can purchase more smartphones at a lower price and this will cause the supply curve shift to the right. Smartphones that cost several thousand dollars a few years ago and nowadays can be purchased at a few hundred dollars, and the storage and the speed of the processor are almost the same with the new phone which cost thousand dollars.

Changes in smartphones market can affect the demand of smartphones or can affect the demand for the product that are related. So, smartphones market will keep increase the demand for a new product and this will cause the older products become obsolete.

Going back to the example of how they affected the supplies and prices of smartphones. Nowadays, our technology became more advanced than before so that technology also created a market for smartphones which the performance is almost the same compared with the older smartphones. The new smartphones size is smaller but full screen, camera is clearer and the most important are the price are almost the same compared with the older one.

As a result, the demand for the older smartphones has been reduced because of the new smartphones. In smartphones market, technology in advance constantly changing the landscape with the new products and eliminate the older products. So, manufacturers continue their main mission to let their technology became more advanced, the demand and supply for products are always changing by the consumers’ taste.

In a nutshell, the elasticity in economy helps smartphones market or supplier to understand the needs of consumers, taste of consumers. They also can build a good relationship with the consumers by having a connection or interact with consumers. In conclusion, technology became more advanced, it is impossible to monopolize a market for a long period. As a market breaks down from a monopoly into different market structures, The pricing of a product is the key to obtain bigger market shares.

The demand for OSVs is strongly connected to the number of rigs employed by the exploration and production companies. The demand for certain specialized OSVs may be driven by factors other than the oil prices, but those are the exception rather than the rule. According to Clarksons Research, since the oil price slump, rates for rig have fallen more than 50% furthermore 300 rigs are laid up in June 2016 (Clarksons Research, 2016, pg. 9). As a result, this affected the OSV rates which have fallen by an average of 35% and reports state that there are as many as 1,400 OSVs laid up.

Too Many Vessels, Too Few Active Rigs

The two factors that drive revenue for OSV companies are offshore rig utilization and day rates. A study done by Clarksons Offshore Intelligence and AlixPartners analysis, the number of active offshore rigs is 33% lower than 2014 levels, declining to 474 in July 2018 from 706 in 2014. OSV day rates are 40% lower than in 2014 (Alixpartners.com, 2019). Other than the geopolitical factors and US oil infrastructure issues, abundant shale oil supplies in the near term and the impact of energy transition on oil demand in the medium-to-long term will likely serve as constraints on drilling a substantial number of new offshore wells.

By looking and analyzing these constant changes in the oil industry, the global OSV market seems currently oversupplied by about 1,150 vessels. About 900 vessels are 15 years or older which will have difficulty finding projects and could be retired, as newer vessels are more efficient, less costly, and more compliant with increased environmental regulations.

But there are factors preventing a reduction in the overall supply of vessels. Generally, the sector is fragmented, with the largest operators controlling 30% of the fleet and the remaining 70% controlled by 400 smaller operators with fleets of six or fewer vessels. Small operators have little incentive to retire any of their own fleets and are loathe to take action that would benefit the larger companies or the sector overall.

This decrease in demand has put the industry under significant financial pressure and the OSV operators have adopted strategy in response to the problem. The first reaction naturally will be of cost cutting, which has been taken. It is clear that operators in this area have studied carefully at their expenditure and reduced costs where possible. The next answer to many of the industry’s problems should be consolidation or mergers. However there have not yet seen major mergers or acquisitions in this sector. The below reviews the current state of the OSV market across the major regions

North Sea

The North Sea OSV sector is depressed, with supply exceeding demand, despite a few tenders becoming available in the market. Clarksons Platou expect 50 more OSVs to be laid up by year end with 2016 seeing the bottom of the market. The OSV owners operating in the North Sea are exploring opportunities in other markets both geographically and industry-wise. For example, it has been announced that Deep Sea Supply entered into a joint venture with Marine Harvest ASA which would build, own and operate aquaculture vessels.

Many of the OSV operators in the North Sea are also looking to raise finance. For example, it has been reported that Oslo-listed Solstad Offshore will receive USD 58.8 million in new liquidity from Aker ASA. This investment resulted in unexpected consequences for the Norwegian OSV industry.

West Africa

The OSV rates in West Africa remain low together with the overall reduced level of activity. Topaz Marine has reportedly cut its operations in the region by placing three vessels in Turkey whilst Oceaneering International has experienced early termination of an OSV contract by BP earlier in the year.

Tidewater, reportedly the operator of 93 vessels in West Africa, predicts a shift in investment focus towards natural gas in the region if oil prices remain at levels below US$40 per barrel. It seems that whilst existing oil projects are being completed future developments and resulting demand for supporting vessels will come from the gas projects.

US Gulf of Mexico

The OSV utilization rates in the US Gulf of Mexico fell dramatically in 2015 (below 60% compared to 80-90% prior to the fall in oil prices), which is to be expected given that the rig count in the US Gulf of Mexico decreased by over 25% between December 2014 to December 2015 according to AlixPartners.

Arabian Gulf

The Arabian Gulf is a special case in the global OSV outlook. The fact that companies like Saudi Aramco and ADNOC sustained their production levels benefited the local OSV market even though there may have been pressure put on rates. The rig count has declined only by about 5% between 2014 and 2015.

Tradewinds reported at the end of June 2016 that medium-size platform supply vessels (PSVs) saw an increase of USD 1,000 per day in May 2016 although the market overall remained flat. There were also reports of some 23 vessel contracts being awarded by Saudi Aramco in May 2016.

However, the influx of the OSV owners has created additional supply which is negatively affecting the rates.

Nevertheless, some owners managed to ride the wave. For example, Seatrade reports offshore contractor, GMS (Gulf Marine Services) as a good example of an Owner enjoying buoyant demand for its vessels. GMS is reportedly expanding its fleet and introducing a new class of mid-size vessels whilst others are focusing on surviving the depressed conditions.

To Consolidate or Not to Consolidate

Given the downturn affecting the OSV sector, many have predicted and advocated mergers or acquisitions as a solution to the industry’s problems. The rationale behind the consolidation strategy in an industry that is going through the difficult times is that companies that struggle to survive would benefit from the economies of scale by forming an alliance – the bigger the stronger. Consolidation helps to achieve greater efficiency and to reduce costs and overheads; it can give companies an opportunity for redeployment of the assets, expand their capability and gain access to larger projects and new strands of work.

Other sectors of the oilfield services industry, have shown more of an appetite towards significant mergers, the most notable would have been Halliburton and Baker Hughes.

However, this interest in consolidation has not been as active within the OSV sector. That is perhaps when AlixPartners consultants did a study of major OSV companies, it was found that more than half of those companies were headed toward bankruptcy unless they take measures. Swiber Offshore filing for liquidation at the end of July 2016 is a recent example of the perilous situation companies may find themselves in.

There to be a number of possible reasons for the lack of notable consolidations in the OSV sector. One reason is that the type of assets employed in the OSV industry varies greatly depending on the specialization of the particular operator and their area of operations. This complicates the task of finding a suitable company although it may also be seen by some as an opportunity to grow into a new sub-sector of services.

Another often quoted reason is that the offshore operators are often family-owned businesses who want to remain independent more than they want to be profitable. It is not easy to unite different business strategies and philosophies of the OSV operators where strong personalities are involved. It has also been said they are not experiencing pressure from the shareholders in the same way as other industries, which is usually one of the major drivers for consolidation. Additionally, it has been commented that banks are not putting pressures on the companies to realize the returns that were expected.

The recent acquisition of Rem Offshore by Aker shows that the decision can be soon taken out of the hands of the OSV operators. Having invested in Solstad, Oslo-listed Aker accumulated bonds issued by Rem Offshore and blocked the latter’s restructuring plan unless it agreed to merge with Solstad. Rem’s chairman has called Aker’s move hostile but other sources agree that it would ultimately benefit the Norwegian OSV sector.

The difficult and painful actions that are required now to become more cost-competitive and restructure balance sheets could create stronger world-class companies that can not only survive this crisis, but even thrive if the sector recovers.

References

1. Clarksons Research. (2016). Offshore – Page 9 – Clarksons Research. [online] Available at: https://clarksonsresearch.wordpress.com/category/offshore/page/9/ [Accessed 12 Nov. 2019].
2. Alixpartners.com. (2019). Offshore supply vessel companies face continued pressure | AlixPartners. [online] Available at: http://alixpartners.com/media-center/press-releases/offshore-supply-vessel-companies-face-continued-pressure-alixpartners-study/. [Accessed 12 Nov. 2019].
3. Howard, G. (2016). North Sea OSV lay-ups will rise 50% in 2016, broker predicts. [online] Lloyd’s List. Available at: https://www.lloydslist.com/ll/sector/ship-operations/article520592.ece [Accessed 12 Nov. 2019].
4. Riviera Maritime Media. (2019). OSV players venturing into new markets. [online] Available at: http://www.osjonline.com/news/view,osv-players-venturing-into-new-markets_42481.htm [Accessed 12 Nov. 2019].
5. Riviera Maritime Media. (2019). Another OSV operator looking outside of the sector. [online] Available at: http://www.osjonline.com/news/view,another-osv-operator-looking-outside-of-the-sector_43574.htm [Accessed 12 Nov. 2019].
6. Riviera Maritime Media. (2019). Investment expected to shift from oil to gas in West Africa. [online] Available at: http://www.osjonline.com/news/view,investment-expected-to-shift-from-oil-to-gas-in-west-africa_42199.htm [Accessed 12 Nov. 2019].
7. Professionalmariner.com. (2015). The Gulf’s offshore hiring boom comes to an abrupt end – Professional Mariner – May 2015. [online] Available at: http://www.professionalmariner.com/May-2015/The-Gulfs-offshore-hiring-boom-comes-to-an-abrupt-end/ [Accessed 12 Nov. 2019].
8. Alixpartners.com. (2019). Results-driven global consulting firm | AlixPartners. [online] Available at: http://www.alixpartners.com/en/Publications/AllArticles/tabid/635/articleType/ArticleView/articleId/1882/Oil-Price-Drop-Sinks-Offshore-Supply-Vessel-Market.aspx#sthash.GzvOwXs7.dpbs [Accessed 12 Nov. 2019].
9. TradeWinds | Latest shipping and maritime news. (2016). No hiding place for OSV owners amid global slowdown | TradeWinds. [online] Available at: http://www.tradewindsnews.com/weekly/766623/no-hiding-place-for-osv-owners-amid-global-slowdown [Accessed 12 Nov. 2019].
10. Regulation • Ports • Owners • Yards • Offshore • Classification • Marine Services Ready to step up. (n.d.). [online] Available at: https://mes.vdma.org/documents/106011/12126279/2_SMME%202016%20-%20Schiffahrtsbericht%20VAE%202015.pdf/401e30ec-fb2a-4326-9805-e101351d4252 [Accessed 12 Nov. 2019].
11. Tradewinds, 22 July 2016, page 24.

Much empirical research has been done on the efficacy of the theory of planned behavior with many findings showing that attitude, subjective norm and perceived behavioral control has positive correlation with behavioral intention for supply and demand of higher education. The theory of planned behavior can be used to explain the differences in behavioral intention and actual usage.

The theory of planned behavior (Ajzen l99l) explains that 3 types of beliefs (behavioral, normative, and control) influence an individual. Performance of the behavior requires cognitive evaluations that include a cost to benefit evaluation of attitude towards the behavior, how other people perceive the behavior, and the perceived self-control over the behavior. Beliefs come “from a variety of sources, such as personal experience, formal education, radio, newspapers, the Internet and other media, and interactions with friends and family” (Fishbein & Ajzen, 20l0). The probability of engaging in the behavior is determined by belief. The help determine if the behavior would be performed (Ajzen l99l) because beliefs form the cognitive basis from which behavior follows (Blank and Hennessy 20l2; Fishbein and Ajzen 2010; Yzer 2013).

The theory provides a better understanding of the relationship between the demand for higher education and the supply of appropriate certification with respects to its value in the market.

Supply and Demand in Higher Education Market: The Nigerian Scenario

Dawodu (2004) noted that the provision of schooling in Nigeria is largely provided and financed by government through the Ministry of education and provided at a highly subsidized cost of free of charge. However, due to unmet demand for education coupled with shrinking government budgets, the public sector in Nigeria has developed an innovative partnership with the private sector which encompasses a wide range of providers including for-profit schools (that operate as enterprises), religious schools, non-profit schools run by NGOs, and community owned schools. In other words, there is a market for higher education. The main rationale for Public-Private Partnership (PPP) programs is the potential role of the private sector for expanding equitable access and improving learning outcomes. In low-income countries like Nigeria excess demand for schooling results in private supply when the state cannot afford schooling for all. However, ‘differentiated’ demand leads to a demand for private schooling with a good reputation and record of good performance regardless of the higher school fees charged by these schools which is also creating a market gaps and limited choices among consumers of services by opting for educations with lower satisfaction rates.

Unbalanced Representations of the Supply and Demand in Nigerian Higher Education Market

Under the situation of college graduates’ employment marketization, the influence and limitation function of the market to higher education cannot be ignored any more. The supply and demand in Nigerian higher education market mainly represents the structured unbalance, and the conflict between the supply and the demand of the first higher education market gradually tends to decrease, but the conflict between the supply and the demand of the second higher education market is gradually increasing.

The conflict between the supply and the demand of the first higher education market is mainly represented by that the public’s total demand to higher education exceeds the total supply of higher education to some extent. Since Nigeria implemented the enrollment expansion in l999, the enrollment number of Nigerian colleges increases at the speed of about 20% each year. In 2002, the gross enrollment rate of Nigerian higher education achieved l5%, which indicated that Nigeria had formally entered into the popularization of higher education.

In 2005, the gross enrollment rate of higher education was 2l%, and the scale of higher education had been the first position in the world. In 2006, this number ascended to 22% (Wike, 2007). The ‘blowout’ growth of talent supply in Nigeria could make for the accumulation of human capitals, the enhancement of employees’ cultural and scientific quality, and the increase of the comprehensive strength, but on the other hand, the supply of Nigerian labor force has exceeded the demand, and the yearly growth of the urban unit employment post amount supplied for college students has far lagged than the growth amount of graduates, which induces the situation of the supply and demand to be reversed. The former seller’s market of higher education has completely turned into the buyer’s market, so college students’ difficult employments occur.

Strategies to Reduce the Unbalance of the Supply and Demand in Nigeria Higher Education Market

As a whole, the conflict that the supply exceeds the demand in the second market of Nigerian higher education has ascended to the main conflict. If this conflict continues, and many graduates cannot be employed, not only large numerous education investments of the country and the public will be wasted, but with the gradual accumulation of graduates, the social stability will be certainly impacted, which goes against the country, the society, and the individual.

How to achieve the balance between the total demand and the total supply of higher education? Extending the supply and adjusting the demand are required. First, the government investment, civil investment and education consumers’ investments should be increased, and the general higher education, private higher education, adult higher education, and vocational higher education should be developed largely to enhance the quality of education comprehensively. The modern information technology should be utilized to develop the remote education. The education system should be largely reformed to fully exert the function of existing education resources and extend the supply to exceed the growth of demand and gradually reduce the conflict of demand and supply.

Ever realized that there are a countless amount of brands for the same product? It’s how our economic system works. Supply and demand is the backbone of how the United States keeps its economic system functioning. When using the ideal supply and demand aspect it keeps the system running fairly. Associations routinely don’t raise their expenses despite when demand ascends since it is seen as being ridiculous. This is due to having the two basic laws of supply and demand. Therefore clients constantly put down progressively expensive rates on the off chance that they feel there is no security for it. Due to having supply and demand it creates a fair advantage for everyone to be in control of what they produce, it produces more job opportunities to have the economic system grow, and it gives the government enough omission to generate rules and regulations.

No matter what the name of the company is whether it has a well-known brand name or it’s considered ‘off-brand’ all companies that the same opportunity to create the incomparable products. A free market economy opens the door wide for advancement, which is outstandingly noteworthy for associations. Through this kind of economy, business visionaries can develop new things and organizations missing much mediation from the lawmaking body. They can make what they see is fit for the open reliant on customer demands and unmistakable examples. In that limit, they can give customers what they need. Having a market economy creates innovation in which companies have to compete to see who can create the best products for the best price. The achievement or disappointment of an item lies in the hands of clients. When they like it, they will request a greater amount of it. On the off chance that they don’t, at that point, there won’t be any commotion for it. This is best exhibited in items or administrations that are comparative. It’s quite clear which one is favored dependent on deals results. Clients additionally give the main factor with regards to valuing. Makers set a specific sum yet clients choose which one is best founded on quality and moderateness.

Furthermore, having the supply and demand concept keeps the economic system fair due to creating opportunities by providing those who are unemployed to a stable job. Similarly as the laws of free market activity influence the costs shoppers pay for products and ventures, they likewise influence the work showcase. Rather than straightforwardly managing buyer merchandise, the work showcase includes the connection between laborers and firms in the commercial center. Firms basically are the purchasers and people give the work or supply. Be that as it may, both go about as compensation takers; firms must take and pay the rates the market requests and specialists must acknowledge these wages for the work given. Firms need specialists to deliver merchandise for buyers. The measure of work requested by a firm relies upon a few components, including how much the work costs, as controlled by the market wage rate, and how much work the firm needs. To boost benefits, firms preferably need to employ more laborers at lower compensation. This makes a descending slanting interest bend as it identifies with work wage rates. As firms purchase up more work, wage rates decline. At the point when firms request and contract fewer specialists, compensation increment.

Eventually, the government is given enough omission to generate rules and regulations. The job of government is to guarantee that the business sectors are open and working. For instance, it is accountable for national barrier to ensure the business sectors. It likewise ensures that everybody has equivalent access to the business sectors. The administration punishes syndications that confine rivalry. It ensures nobody is controlling the business sectors and that everybody has equivalent access to data. With business left to private undertakings, the legislature can concentrate on the guideline of the market to improve monetary strength and the nation in general. At the point when accurately actualized, the administration’s approach choices may appear to be nonsensical to the interests of organizations at first, however, will really give more prominent security over the long haul. Besides, a blended economy takes into consideration a social security net that gives wellbeing to the general population who are hit hard by troublesome monetary occasions.

In conclusion, supply and demand are the backbones of how the United States continues to operate its economic system. It keeps the system running fairly when using the ideal supply and demand aspect. While displaying the concept of supply and demand it allows everyone in the system to have a fair advantage and be in control of what they produce, it creates more job opportunities to have the economic system grow, and it gives the government enough omission to generate rules and regulations.

Demand is the desire of a buyer which is accompanied by the ability to pay for a particular commodity at a specific price. On the other hand, if we talk about supply then supply is basically the quantity of the commodity that is made available to the consumers by the producers at a specified price. Demand and supply mainly have inverse relationship which states that when demand increases supply decreases and when supply increases demand decreases which is vise a versa.

Demand and Supply in Indian Railways

The future of Indian Railways depends on a large extend on how it meets up to the rising transport demand and the increasing pressure from competitive transportation models. It has been always seen that the demand of Indian Railways is always more than the railways could actually supply. Due to the increasing rate of population more and more people are adding up to the passenger segment of Indian Railways which is not duly met. As due to the growth of the country more and more people are engaged in work outside their hometown which forces them to travel through train twice a day in regular basis. The rise in demand can be easily pointed out in metro cities where the condition is really pathetic.

Though Indian Railways is planning to adopt some of the strategies like focus on increasing the rail capacity for passengers and freight, more electrification and remodeling more trains for short distance passenger traffic. The Railways is also trying to follow a strategy to meet the high unmet demand. As said by Pillai, “Building rail transport capacity has been a high time lag due to the long gestation period in building of the infrastructure projects and in land acquisition. So, the priority is given to argument the capacity of trunk routes”.

Passenger services in India take two third of rail capacity and the fright services take up the other one third. If we talk about revenue then the case is the reverse where fright accounts to two third of the revenue.

Focus on Freight

It is a high time now when fright traffic needs to be increased as said by Pillai. This is what needs to be focused on so that the railways could serve the economy better. The demand of rail fright movement is limitless and there is very less space for growth for all modes of transport like coastal shipping, air road transport and inland waterways.

As there is no shortage of demand so the challenge here is to keep a pace with the demand. The Railways is planning for two freight corridors which would make a lot of difference to coal and port traffic.

The other emphasis is to improve the short distance passenger traffic which should be improved by improving the short distance train which is also known as distributed power trains or mainline electric multiple units. Focus is also put on trains that accelerate and decelerate and also to electrification of trains.

Electrification

As said by our earlier Railway Board Chairman VK Yadav, Indian Railways needs to focus on electrification to meet up the electrification demand domestically and not by importing crude.

Demand Due to Touting and Black-Marketing

It has been seen that Indian Railways is now the only organization left in which touting and black marketing is still prevailing. It has been seen that Indian Railways is now only an organization in which quota system is still existing quota system has been eradicated from All the departments but still not from Indian Railways. Indian Railways has passed a very bad days and now it is the time to decide what measures should be taken for the elimination of black marketing in train ticketing. Black marketing in tickets is basically because of the disbalance between demand and supply. Now, this is the factor when a proper management of supply and demand is required demand is not very high that it cannot be managed in fact every person who wants to travel has to travel in one other way.

Steps That Can Be Taken to Manage Demand

1. There are various are special trains but they are not very popular with the regular passengers so measures should be taken so that not only the leftover passengers but everybody should travel by the special trains to reduce unnecessary crowd.
2. Indian Railways should do some home and marketing work to uplift all the trains and to bring them in an equal status.
3. Indian Railway should try to release the summer and winter and festival trains in advance looking up to the traffic of different directions.
4. Indian Railway need to run special train non-stop from one end to the other with very few commercial stoppages. Specially in Metro Areas where it is seen people hanging out of the trains as it is very crowded.
5. Indian Railway should provide facility for seat selection which is prevailing with international flights.
6. Reservation of booking of the special trains should start earlier than conventional trains and effort should be put to achieve minimum 95% passenger-kilometres of the total passenger-kilometre capacity.
7. The journey by special train should be make more enjoyable so that it attracts customers by providing freebies like water bottles magazine etc.

Demand of Indian Railways During Covid-19 Situation

With the Covid-19 rise in cases it has been seen that various states are demanding to supply around 960 isolation coaches to treat the patients. Not only due to the demand of isolation centers but demand has also gone up due to the to and foe movement of labors, migrant workers and other passengers who were travelling back home.

Railway activity is growing more than any other country with the movement of passengers reaching up to 40% of global movement stated in the ‘Future of Rail Report’. Railway activities have measured in billion passenger km which is amongst the highest in the world second only to China in passenger movement and forth in freight movements. Therefore, it can be seen that the demand for Indian Railways is huge and rail needs to work a lot upon this to balance up the demand and supply pattern.