BP (British Petroleum) is a leading oil and gas multinational firm. The company traces its history to the early twentieth century. Since then, the company has undergone many successes and challenges which have shaped the company to its present state. Immediately, BP operates throughout over eighty nations. Refinery Equipment The company’s workforce is about 83,900 working throughout the over 80 international locations. The manufacturing of the corporate is about 3.2 million barrels of oil per day. By way of financial value, BP has generated over $403 billion. The working money movement of the corporate if about £21.1 billion (BP p.l.c. n.p.).
Firm Vision and Mission
BP’s technique is “to be a focused oil and gas company that delivers value over volume(BP p.l.c. n.p.). To attain this strategic objective, the company is specializing in establishing clear priorities, using distinctive capabilities, and having a top quality portfolio. The company’s financial goal is to generate a sustainable cash circulation that will create value for the shareholders (BP p.l.c. n.p.).
Firm Products and services
As a gas an oil company, BP supplies a wide range of vitality products and services including oil drilling, vitality, gas transportation, petrochemical products, and lubricants among others. BP has two primary enterprise segments that embrace Refining and Marketing and Exploration and Manufacturing. The latter is concerned with exploration of oil and gas, midstream transportation, filed improvement, manufacturing, processing, storage, buying and selling and advertising of natural gas. The former is worried with manufacturing, refining, transportation, advertising, trading, and provide of petroleum, crude oil, and petrochemical products (Reuters n.p.).
BP, like every other firm, has inside strengths and weaknesses which have enabled the corporate to be where it is right this moment. The company can management these internal attributes to make sure that it explores the opportunities accessible within the exterior atmosphere. Nonetheless, it has additionally to deal with numerous threats in the exterior surroundings. The primary goal of this paper is to present an in-depth SWOT evaluation of BP that will establish the strengths, weaknesses, alternatives, and threats that the corporate is experiencing.
SWOT Evaluation
The SWOT grid below summarizes BP’s strengths, weaknesses, opportunities, and threats.
– Strong brand name
– World operations
– Product portfolio
– Among largest in the oil and gas industry
– High price of environmental hazards
– Manufacturing decline
– Destructive perception
– Various power
– Rising markets
– Oil discoveries
– Intense competitors
– Authorities regulation
– Volatile gas/oil prices
Strengths
Considered one of the greatest strengths of BP is its sturdy brand worth. The BP model was ranked the sixth amongst Fortune World 500 with a brand worth of over $388.Three million. Within the oil and gas industry, the BP model was among the top five most respected manufacturers (Fortune 6). A robust brand is an inside energy because the corporate it gives aggressive advantage against different smaller manufacturers in the industry. Additionally, the global operations of the corporate allow BP to serve a bigger market and unfold risks to the business. The diversified product portfolio by BP can also be an inner strength as a result of it allows the corporate to serve assorted market wants and spread businesses dangers. Finally, BP is amongst the most important oil and gas companies in the world (Power Digital 6; Caldeira 1). This means that the corporate enjoys economies of scale. BP can utilize these strengths to achieve competitive benefits over competitors.
Weaknesses
BP has three essential inside weaknesses. First, the corporate operates in an trade that has very high costs of environmental hazards. This is due to the risk of disasters comparable to oil spills and fires that often trigger important damages. The corporate has to incur these prices, which eats into the profitability. Second, BP suffers from widespread unfavourable notion especially after the Gulf Oil Spill in 2010 (Mathews 24-25). This detrimental perception has had adversarial implications on the corporate. The best implication has been the decreased trust in the moral ideas of the corporate. This has been manifested by way of the decline in brand position/value in addition to financial efficiency after the oil spill (Heflin and Dana 8-9). The corporate has to deal with this detrimental notion to make sure that it retains its main position. This would require a multifaceted strategy. As an illustration, the corporate is already trying to deal with the problem by compensating the affected folks and areas. Nonetheless, this ought to be complemented by the development of better moral policies that can ensure the errors leading to the oil spill will not be repeated once more. Moreover, it will likely be necessary for BP to focus more on company social accountability initiatives as a method of winning again the belief of the society.
Finally, there has been a decline in oil production in the world. According to BBC (n.p.), there has been a serious fall in oil and gas production from underneath British waters since 2011. It is a cause of worry for BP, which is based within the UK. The company might face a major fall in production, which would see a decline in sales and profitability. If the development continues into the longer term, the company should shut down some of its operations. Nonetheless, BP inner manufacturing has declined because of investing extra on addressing the impacts of the Gulf oil spill. The company has had to cut production after the incident, which has seen the sales and profitability drop significantly. At present, the company has to proceed with coping with the effects of the Gulf oil spill. Nevertheless, to prevent further reduction in production, BP can identify various oil wells since the conventional manufacturing in the affected well will take more time to resume.
Alternatives
The exterior setting gives various opportunities for BP. First, the trend in the direction of clear energy use offers a possibility for BP to start out producing various energy including photo voltaic energy, geothermal, and wind energy among others. The corporate can overcome the destructive perception that emanates from oil and gas production by diversifying into alternative sources of power. In response to Giges (n.p.), the renewable energy sector is about to grow sooner or later. This means that BP can discover this alternative for future development. The corporate has already started investing into various energy. For instance, the company invested over $500 million in photo voltaic and wind energy within the period 2000-2005 (Noon para. 4). Nevertheless, these attempts have been minimal and lackluster to yield significant positive aspects. Therefore, BP should develop a particular enterprise unit to give attention to various power and prioritize this enterprise unit to make sure that it derives sustainable advantages.
Second, BP can discover the chance accessible in emerging markets. Rising markets are significant in worldwide business as a result of they’ve growing markets. Therefore, these markets providing important markets for BP to deal with contemplating that the current markets are already in their maturity levels. Other than accessing new markets, BP will also spread enterprise dangers. For example, BP can spread the business risks emanating from the Gulf oil spill within the US to new rising markets in Asia and Africa. Finally, rising markets will enable BP escape from the intense competitors in the current markets. Much less technological adoption and smaller corporations characterize emerging markets. Therefore, BP will have a aggressive advantage in these markets because of its large dimension and robust brand.
Third, BP may benefit from the brand new oil discoveries in numerous parts of the world. Within the recent past, there have been new oil discoveries in East Africa, Nigeria, Gulf of Mexico, Malaysia, Angola, Canada, and Egypt among other areas (Helma n.p.). These new discoveries current strategic opportunities of BP, which is experiencing reduced manufacturing in a few of it present oil fields. To avert a scenario where oil drilling can be halted by the depletion of oil sources, BP ought to now deal with the brand new oil discoveries. This will be sure that enterprise operations are sustainable.
Threats
One of the threats going through BP is the stringent regulatory atmosphere. The oil and gas industry is among industries that are tightly regulated due to the excessive risk of environmental pollution and different risks. BP has to adjust to numerous regulations, which increases the cost of compliance as well as the risk of dealing with punitive measures for violations. Other than stringent laws, BP additionally faces intense competitors from other oil and gas industries together with Royal Dutch Shell, Exxon Mobil Corporation, and Chevron Corporation amongst others. These competitors have different aggressive advantages that they may use to win against BP. Lastly, the oil and gas industry experiences high price volatility, which makes financial planning and expectations difficult. This volatility usually works in opposition to oil and gas corporations particularly when the costs drop considerably. To avert or mitigate these risks, BP should apply its inside strengths and explore the prevailing opportunities.
Abstract of Findings
From the SWOT analysis of BP, it is clear that BP has unique inner strengths and weaknesses. The latest Gulf oil spill appears to have the greatest destructive impact on the corporate because it has resulted in elevated unfavourable perceptions of BP, lowered brand energy, and decline in production and profitability. The present position of BP requires renewed efforts to ensure that the corporate retains its leading place. However, it will only be attainable by way of exploring out there opportunities. We now have identified numerous alternatives that BP can explore to ensure progress and sustainability. It will likely be upon the company to prioritize these opportunities in keeping with essential and or urgency.
Nonetheless, BP ought to take into consideration the potential threats that might prevent the profitable exploration of the available alternatives. Figuring out and understanding enterprise threats is an important strategic issue for any business. For BP, managing the potential risks should go together with the exploration of the potential alternatives. As an illustration, when exploring alternatives in rising markets, BP should take notice that opponents will also be preventing for a similar markets. Subsequently, when venturing into the rising markets, BP should make sure that it adopts aggressive methods. Otherwise, the opportunities in the rising markets will go to the competitors to the disadvantage of BP.
Works Cited
BBC. “’WorryingDecline in Oil and Gas Manufacturing.2013. Net. 30 June 2014.
BP p.l.c. “BP At a look,2014. Net. 30 June 2014.
Caldeira, Renatha. “British Petroleum (BP) Growth in Brazil and Advertising Alternatives: How BP Can Develop Its Portfolio within the Brazilian Crude Oil Market.n.d. Net. 30 June 2014.
Energy Digital. “Top 10 Oil Corporations on the earth,2014. Internet. 30 June 2014.
Fortune. “Global 500 2013,2014. Internet. 2014.
Giges, Nancy S. “Renewable Vitality: Prime 5 Development to observe in 2013,2013. Internet. 30 June 2014.
Heflin, Frank, and Dana Wallace. “The BP Oil Spill: Shareholder Wealth Effects and Environmental Disclosures,n.d. Internet. 30 June 2014.
Helman, Christopher. “The 10 Greatest Oil and Gas Discoveries of 2013.Forbes, 2014. Net. 30 June 2014.
Mathews, Jordan R. “Perceptions of BP: Successes of Submit 2010 Oil Spill Restoration Effort.2013. Honors Theses. Paper 142. Net. 30 June 2014.
Noon, Marota. “BP: Back to Petroleum and Past Puff-Power.2013. Net. 30 June 2014.
Reuters. “BP PLC (BP),2012. Web. 30 June 2014.
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