'British Petroleum (BP): SWOT and BP Porter Five Forces Analysis – Essay\r'

' stand up and Porter louvre Forces Analysis of British petroleum (BP)our commit ingest probe †Need Help Writing an show Contact us Today. Student Submitted trys!our site Sample endeavor †AbstractBP Porter quintuple Forces †BP Plc is integrity of the leading cover and grease-gun companies in the world operate in more(prenominal) than than 80 countries and serving culmination to 13 million customers. The ac family was class-conscious third in the FTSE 100 every last(predicate) sh be index bout ranking as at the coda of 31st August, 2014 with a merchandise dandyization of 82,093.2, million US Dollars. BP’s study(ip)(ip) strengths take on solid crack recognition, bulky financial cap great might, polished corporate strategy, and the ability to innovate. Global diminution in the output signal of unrefined crude crude petroleum and natural gas, poor people disaster counselling and inability to machine long-term restrictive mecha nisms be the confederation’s anchor weaknesses. The come with has the luck to invest in alternate expertness even though it faces remarkable competition from hear rivals such(prenominal)(prenominal)(prenominal) as Royal Dutch Shell, Exxon Mobil and streak. BP Porters phoebe bird Forces Analysis of BP reveal low terror of new entrants and easings, medium bar come to ply of two buyers and suppliers, and high rivalry among actual competitors. To remain competitive, the alliance should increase strategical investment in R&D, act with governments and former(a) firms to forge emerging markets, rebuild its provoker value and streamline its take and assembly line operation.our site Sample try on †IntroductionFounded in 1908, British Petroleum (BP) is one and merely(a) of the leading rock crude rock inunct colour and gas companies in the world. The company trading trading operations in more than 80 countries, has over 83,900 employees and serves over 13 million customers world-widely (BP Plc, 2014). The company suffers customers with oil and gas products, fuel for transportation, petrochemical products and energy for open-eyed and heat. With a market capitalization of 82,093.2, million US Dollars, BP was ranked third in the FTSE 100 all shargon index ranking as at the close of 31st August, 2014 ( investment company Challenge, 2012).\r\nBP’s interests and activities can be categorised into two core business segments: Refining and Marketing and geographic expedition and Production. The Exploration and Production segments cover upstream and midstream activities which include exploration, achievement, pipelining, and processing. Refining and Marketing segments cover downstream activities such as crude oil transportation, manufacturing, marketing and supply of both petrochemical and fossil oil products and services (BP Plc. 2014).our site Sample turn out †BP trick out AnalysisBP’s key strengths are its strong brand recognition and capacious financial capability. Being the third largest energy company in the world, it is globally acknowledge for high quality petroleum products. Additionally, with an judge total operating cash electric current of 2014 at $30 jillion, the company’s strong financial position gives it the opportunity to introduce new products, develop alternating(a) energy, and expand to new markets (Reuters, 2014). Regarded as one of the best in the world, the company’s corporate strategy is as well a notable strength. This, coupled with its strong brand loyalty, enabled it to emerge from the devastating deepwater horizon oil spill of 2010 (Reuters, 2014). The company’s ability to innovate and enter into strategic threatens with other governments and corporations in new markets is another key strength. In 2013, BP entered into a strategic shackle with both China and the US to provide substitute(a) solar energy to a number of gov ernment agencies.\r\nA global reduction in the production of crude oil and natural gas is a key weakness of the company. Poor overt bod as a moment of the North Alaska and deep-water oil spills besides led to serious challenges for the company. Not only did it face criminal charges, it spent an estimated $42.2 billion in cleanup and compensation (Reuters, 2014). other key weakness is its non-competitiveness in the alternative energy sector. Despite being a major player in the oil labor, majority of consumers are tacit unaware of the company’s involvement in alternative energy (Bamberg, 2000). The inability to implement long-term regulatory mechanism to dampen it from the highly volatile petroleum prices is also a key weakness of the company.\r\nBP’s profits and its current strong financial position present an opportunity for the company to initiate new projects. The company’s biggest opportunity is investing in alternative energy. The BP Solar Home Solu tions initially introduced in New York can be expand into other regions especially within the American and European markets. This will guarantee the company more customers who prefer the little pricy solar energy. The company also has an opportunity to expand its export markets to Asia and South America. Discoveries of more oil wells and increasing prices of oil and gas are additional opportunities that the company can take advantage of (Smith, 2011).\r\nmajor(ip) players in the oil and gas sedulousness especially the Royal Dutch Shell, Exxon Mobil, and Chevron pose the greatest bane to BP. The executing of environmentally unsound policy and poor management of natural disasters such as the toxic spills oft disrupt the company’s operation (Bruland, 2003). Other threats include, erosion in BP’s pipeline network, periodical refinery explosions, multiple lawsuits emanating from ecological disasters and the continued exchange of BP’s corporate owned stations. Declining operations in several potential locations and the tensions associated with operating in the oil business are also potential threats (Black, 2011).our site Sample Essay †BP Porter Five Forces †AnalysisPorter (1980, p. 80) outlines the tail fin forces model to analyze an organization’s competitiveness. These include threats of entrants, dicker power of suppliers, bargaining power of buyers, threats of substitutes and rivalry among existing competitors. The oil and gas industry in which BP operates traditionally require massive financial investments in very expensive infrastructure. Huge capital investment is necessary to cover expenses such as build pipelines, drilling wells, building access roads and acquiring land. BP has an asset value of $236.0 billion (Honnungar, 2011). Considering the cost of market entry and economies of scale in the industry, the threat of new entrance is low.\r\nthither are a number of substitute products such as hydroelectrical energy, nuclear energy, coal, wind power and solar energy. However, most are still in the developmental phase, besides, the cost of production of substitute products is often extremely high. The enormousness of oil in fuelling cars, running industries and generating electricity makes it essential and useful to sectors of the economy (Ferrier, 2009). Threats of substitutes are therefore, low since alternative products are less competitive. The oil and gas industry chip in considerable number of suppliers ranging from private corporations to governments. There are also a number of potential buyers sympathetic to BP. Besides, BP’s just integration in its operations is equal to that of its key competitors (Stiel, 2003). The bargaining power of suppliers is thus rated as medium.\r\nThe products offered by players in the oil and gas industry are often not much different from those offered by their competitors. As a result, buyers tend to take away products with either lower prices or that devour better terms. On the flipside, buyers are some(prenominal); hence even if a spoil section chooses to use the products of their competitors, BP’s operations would not be greatly impacted. The bargaining power of buyers can therefore be regarded as medium. Finally, the oil and gas industry is dominated by huge corporations that pass water a number of low separate products (Stiel, 2003). Key competitors such as Chevron, tot up and Royal Dutch Shell postulate established well recognized brands with significant client base. This implies that BP and its competitors have all able a vertical integration of similar range of products. These factors coupled with low threats of both substitutes and new entrants make competitive rivalry high (Uph, 2010).our site Sample Essay †Conclusion and RecommendationsBP is as a major corporation with significant financial indorse that can be used to venture into alternative energy research to ascension its manufa cturing capacity and increase its global presence. The SWOT and Porter’s five forces analyses indicates that, the oil and gas industry’s major players are well established conglomerates with massive financial resources hence high take aim of competitive rivalry. The attractiveness of the industry makes both the powers of buyers and that of suppliers’ medium while the threat of substitute and new entrance low.\r\nBP should increase its strategic investment in R&D in order to maximize production and exploit new markets. It should also bring off with governments and other firms in order to exploit emerging markets such as China. The company should also consider rebuilding its brand value thereby regaining its image adversely affected by the new-fangled oil spill crisis (Honnungar, 2011). Finally, the company should streamline its business operations and production to gain competitive advantage over major rivals.ReferencesBamberg, J. H. (2000). British Petro leum and Global fossil oil: 1950-1975: The Challenge Of\r\nNationalism. Cambridge: Cambridge University Press.\r\nBruland, K. (2003). British technology and European industrialization: the Norwegian textile\r\n application in the mid-nineteenth century. Cambridge, Cambridge University Press.\r\nBP Plc. (2014). BP Statistical Review of valet Energy June 2014.\r\nBP Plc. (2014). BP at a Glance. [Online] 3 September, 2017. procurable From\r\n\r\nBlack, E. (2011). British petroleum and the single out agreement. Washington, DC: Dialog Press.\r\nFerrier, R. W. (2009). The history of the British Petroleum Company. Cambridge, Cambridge\r\nUniversity Press.\r\nHonnungar, V. (2011). British Petroleum inunct Spill Crisis and Aftermath Corporate\r\n cheek and Communication at BP during the disaster. Munich: GRIN Verlag\r\nPorter, M.E. (1980) warring Strategy, New York: Free Press. Stiel, P. (2003). British\r\nPetroleum: A Global Company in a Global World. [Online] 3 September, 2017. Avail able From: http://www.pstiel.de/fileadmin/pstiel.de/Download/english_globalisation.pdf\r\nSmith, N. J. (2011).The Sea of Lost prospect: North Sea Oil and Gas, British Industry and\r\nThe Offshore Supplies Office. New York: Elsevier.\r\nStock Challenge, (2012). FTSE All-Share Index Ranking as at Close on Fri, 31 October 2014.\r\n[Online] 3 September, 2017. Available From http://www.stockchallenge.co.uk/ftse.php\r\nUph, C. (2010). PR Analysis of British Petroleum. New York: GRIN Verlag.\r\nAlso, checkout tie in Essays:\r\nBHP Billiton SWOT Analysis and Porter Five Force Analysis SWOT synopsis of Sainsbury’s Plc Strategic Analysis (SWOT, PESTEL, Porter) of necropsy Inn (Whitbread Plc) Summary Reviewer arse Review Date 2017-09-06 Reviewed Item Essay †BP SWOT and Porter Five Forces reason Rating 5\r\n'