Leseprobe
1
Contents
1.0 Company Background
... 2
1.1
"What we do":
... 3
1.2
"What we stand for" ... 3
1.3
"What we value"
... 4
2.0
Strategic Analysis
... 5
2.1
The Threat of New Entrance
... 5
2.2
Power of Suppliers
... 5
2.3
Power of Buyers
... 7
2.4
Threats of Substitutes
... 7
2.5
Competitive Rivalry
... 8
3.0
Strategic Formulation
... 10
3.1
Business Level Strategy
... 10
3.2
Strategic Choices at Corporate Level
... 11
3.2.1
Market Penetration
... 12
3.2.2
Market Development
... 13
3.3.
Implementing Growth Strategy
... 13
3.3.1
Joint Venture
... 13
3.4
International Strategy
... 14
3.4.1
Global Strategy or Globalization Strategy
... 14
3.5
Entry Mood
... 14
3.5.1
Licensing
... 14
4.0
Strategic Implementation
... 15
4.1
Organizational Structure
... 15
4.1.1
Divisional Structure
... 15
5.0.
Conclusion
... 16
6.0
References
... 17
2
1.0 Company Background
British Petroleum (BP) is world's 6
th
leading Oil and Gas Company whose headquarter is in
London, UK. British Petroleum is carrying on around 72 nations in the world, which supplies
approximately 3.3m barrels of oil every day and conducts nearly 22,400 fuel stations in the world
(BP Annual Report, 2016). In 1909, BP is established in the England as the Anglo-Persian Oil
Company Limited. Carl-Henric Svanberg is known as the Chairman of BP when, Bob Dudley take
the place of Tony Hayward as the CEO of BP after the Deepwater Horizon oil spill on 1
st
October
2010 (Young & Falloon, 2010).
BP has the global recognition as an energy company with a wide range of the energy system of the
world. The area of operation in North and South America, Europe, Africa, Asia and Oceania with
nearly 74,500 employees. From the desert to the deep sea, from retail to ring BP delivers
Petroleum, Natural Gas, Aviation Fuels, Motor Fuels, and Petrochemicals products and services to
people around the world. It has the highest number of oil reservation proved hydrocarbon almost
17,810 million barrels (BP Annual Report, 2016).
Bob Dudley (2017) said that the consumption of the energy in 2016 grew slowly again and the third
successive year in which demand has grown up by 1% or less. The growth rate of the British
Petroleum had become much weaker than the rates of growing used to over the past 10 years or so.
3
Figure 1: Revenue of British Petroleum 2003 to 2016
Even though the revenue is deprecating consistently in every year after the fatal incident knows as
The Deepwater Horizon 2010, yet BP manage to achieve $183 billion sales and other operating
revenues in 2016. British Petroleum is recognized in New York Stock Exchange as BP and BP in
London Stock Exchange. During its history, it has been included and considered in a number of
environmental, safety and political disagreements, including the 1965 Sea Gem incident and the
2010 Deepwater Horizon oil spill (Mouawad, 2010).
Instead of having an official mission and vision statement British Petroleum rely on several
statements knows as "What we do", "What we stand for" & "What we value".
1.1
"What we do":
BP seek out, develop and produce crucial sources of energy. Turning these sources into products
that people need everywhere (BP Official , 2017).
1.2
"
What we stand for"
BP looking after sincerely about how they deliver the energy to the world. Starting with safety and
perfection in the operations BP meets fundamental to the success. Their approach is made to
4
respect, being compatible and having the audaciousness to do the right thing. BP consider success
comes from the energy of their people (BP Official , 2017).
1.3
"What we value"
BP believes in five values that disclose the shared understanding of what they rely on, how they
wish to behave and what aspire to be as a giant organization. The five values are,
·
Safety,
·
Respect,
·
Excellence,
·
Courage,
·
One Team.
5
2.0
Strategic Analysis
Porter (1985) outline of five forces demonstrations how an industry or organization is influenced by
these five forces. Considering oil and gas industry this has been done.
The Five Key forces of this model are:
·
The threat of New Entrance Lately from external in the `industry' of the organization
(Extremely Low).
·
Power of Suppliers Power of production inputs or materials suppliers (Medium).
·
Power of Buyers Power of purchasers who buy the commodities or services.
·
Threats of Substitutes instead of purchasing company's products or services customer
may buy (Low to Medium).
·
Competitive Rivalry antagonism within the same `industry' (Very High).
·
2.1
The Threat of New Entrance
Since the high barrier in entering into the petroleum industry, the threat of new arrival into the
industry is extremely low (Harrell, 2016). Indeed the requirements and investment in such industry
are quite high. Even very few organizations that constituting the petroleum industry alike, British
Petroleum accustoms to very expensive and massive equipment at well sites to oil extract and also
for refining. For instance, the drilling equipment like impelling trucks and additional hydraulic
tools, huge investment of capital is included, such as massive expenses to build the infrastructures
i.e. pipeline, the road of access to the industry, land acquisition. While British Petroleum alone has
an operation in 72 countries over the world and the expenses of BP's resources and all those is
$263.1b (WolframAlpha, 2017). One of the most fundamental factor to take in consideration is the
economic scale of the industry and the ease of use of the human resources in terms of scarcity sub-
surface geologist and engineer pool which contribute to the great obstacle for a new organization to
come into the industry (Harrell, 2016).
2.2
Power of Suppliers
As reported by The Economist (2013), in the field of oil and gas industry, some giant suppliers
companies have fully integrated the industry which is active in the entire value chain of the oil and
6
gas section (The Economist, 2013). For instance, British Petroleum (UK), Exxon Mobil (U.S.),
Chevron (U.S.), Royal Dutch Shell (UK), Petro China (China) and so. Mostly their major suppliers
of British Petroleum's are
OPEC countries (Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya,
Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela). Although some great players
at the side of the supplier's oil-rich countries (OPEC) can play a significant role in bargaining
power. Because approximately 73 percent of the world's total proved crude oil reserves are
occupied by OPEC countries
and in 2016 they produced 44% of total world crude oil (EIA; U.S
Energy Information Administartion , 2017). But there are Non OPEC oil wealthy countries like
Russia, U.S.A, China, Mexico, Brazil, Canada, Norway, Kazakhstan, Oman, UK, Colombia, Egypt
and others too. Due to the convenience of the suppliers, reduce the ability to influence the price of
the oil and gas which is known as the bargaining power of suppliers. So the bargaining power of
suppliers is considering Medium (Barysch, 2016).
Figure 2: The Bargaining Power of Supplier (Medium).
Figure 3 (Barysch, 2016) illustrate why the bargaining power of suppliers is medium. Based on
Figure 3, it is visible that even though the OPEC nations controls more than 30 percent of the oil
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- Md Moniruzzaman Kiron (Autor:in), 2017, A Complete Strategic Business Analysis of British Petroleum (BP), München, GRIN Verlag, https://www.grin.com/document/381395
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