Business Report

Business Report on British Petroleum

Introduction3

Discussion3

BP in Dynamic and Changing Environment3

BP SWOT Analysis4

Strengths4

Weaknesses4

Opportunities5

Threats5

BP PESTEL Analysis6

Strategic Position of BP8

Future Strategic Options9

Conclusion10

Recommendations10

Business Report on British Petroleum

Introduction

Multinational corporations operates in changing environmental factors that creates new conditions for their operating, complex and diverse political, economic, social and cultural environments. This often require considerable and serious changes in strategic decision-making and positioning of companies. Inflexible and rigid firms will cease to be competitive in the market every time changes occur (Bright, 2011:15). The aim of the present report is to identify the past and present changes in marketing strategy of British Petroleum, PEST analysis which have occurred under the pressure of environmental factors. It is evaluated whether these changes were necessary, and future strategic options for British Petroleum are recommended.

Discussion

BP in Dynamic and Changing Environment

Taking into account that this report analyses strategic positioning of BP as a response to environmental changes and influences, the external environment of the company should be carefully scanned. It is important to note that not only contemporary external influences ought to be investigated, but also the environmental factors that used to influence BP some time ago. This will allow for observing changes from a historical perspective. In this sense, the PESTEL framework appears to be a very useful tool. It is argued that "the PESTEL framework helps to identify the relative importance of political, economic, social, technological, environmental and legal influences, and can be used to identify the key long-term drivers of change" (Bright, 2011:18).

In accordance with Auldz (2010:5), the main causes of fluctuations in crude oil prices are demand and supply forces, investment demand and monetary inflation. The US Dollar inflation can be graphically presented the following way.

BP SWOT Analysis

SWOT analysis helps the organisation to overcome its weaknesses and to utilize its strengths in some particular directions. The SWOT analysis according to BP company can be best depicted as follows:

Strengths

BP is the leading oil producer in UK, and 3rd largest producer in the world operates as petrochemical businesses worldwide through its subsidiary networks such as Castrol, Connect ,Travel Centre BP. The company mainly spends on research and development on long term projects of alternative energy and implementation of those proposed projects. And it has invested millions in prospering new energy sources. Each year it spends huge amount of money for research and development for instance in 2006 it invested $500,000 for several initiative programs. Its success in exploration in oil base, recently it dug the deepest well ever in Tiber. BP management system is very strong, BP have effective internal communication system.They use resources efficiently and the employees have proper freedom .They are always innovative and their products are eco - friendly. (Bright,2011:14)

Weaknesses

BP have strengths but there are some weaknesses also. They have a lower market share .The knowledge of their customer about the product is still limited. They have a limited capital stock. According to FT Texas oil refinery exposure and leaking pipeline in Alaska made a bad reputation about the company's' safety ...