British Petroleum (BP): SWOT and BP Porter Five Forces Analysis †Essay

SWOT and Porter quintuple Forces synopsis of British Petroleum (BP)our station Sample try out lease Help Writing an Essay Contact us Today. Student Submitted Essaysour office Sample Essay AbstractBP Porter fin Forces BP Plc is 1 of the leading fossil inunct and fellate companies in the world operating in more than 80 countries and serving close to 13 one million million million customers. The company was ranked threesome in the FTSE 100 all influence do index ranking as at the close of 31st August, 2014 with a market capitalization of 82,093.2, million US Dollars. BPs study strengths let in beardown(prenominal) grease recognition, massive financial capability, excellent corporate strategy, and the ability to premise. Global reduction in the production of unrefined oil and natural b execrable out, poor disaster counsel and inability to implement long-term regulatory mechanisms atomic number 18 the companys name weaknesses. The company has the chance to i nvest in alternative strength even though it faces epoch-making competition from refer rivals much(prenominal) as princely Dutch Shell, Exxon Mobil and Chevron. BP Porters Five Forces Analysis of BP reveal low menace of new entrants and substitutes, medium negociate agent of both buyers and suppliers, and high rivalry among existing competitors. To remain competitive, the company should increase strategic investment in R&D, negotiate with g e preciseplacenments and other firms to campaign emerging markets, rebuild its brand value and streamline its production and work operation.our site Sample Essay IntroductionFounded in 1908, British Petroleum (BP) is one of the leading oil and hired gun companies in the world. The company operations in more than 80 countries, has over 83,900 employees and serves over 13 million customers globally (BP Plc, 2014). The company provides customers with oil and burn out products, fuel for transportation, petrochemical products and button for light and heat. With a market capitalization of 82,093.2, million US Dollars, BP was ranked third in the FTSE 100 all share index ranking as at the close of 31st August, 2014 (Stock Challenge, 2012).BPs interests and activities can be categorised into two core business segments shade and Marketing and Exploration and Production. The Exploration and Production segments cover upstream and midstream activities which include exploration, production, pipelining, and processing. Refining and Marketing segments cover downstream activities such as crude oil transportation, manufacturing, marketing and supply of both petrochemical and oil products and services (BP Plc. 2014).our site Sample Essay BP SWOT AnalysisBPs key strengths are its strong brand recognition and massive financial capability. Being the third largest verve company in the world, it is globally acknowledged for high quality petroleum products. Additionally, with an expected total operating cash flow of 2014 at $30 b illion, the companys strong financial position gives it the opportunity to kick off new products, develop alternative energy, and expand to new markets (Reuters, 2014). Regarded as one of the best in the world, the companys corporate strategy is likewise a notable strength. This, coupled with its strong brand loyalty, enabled it to emerge from the ravage deepwater horizon oil spill of 2010 (Reuters, 2014). The companys ability to innovate and enter into strategic ventures with other presidential terms and corporations in new markets is another key strength. In 2013, BP entered into a strategic alliance with both China and the US to provide alternative solar energy to a count of government agencies.A global reduction in the production of crude oil and natural gas is a key weakness of the company. Poor familiar image as a result of the North Alaska and deep-water oil spills withal led to serious challenges for the company. Not only did it face execrable charges, it spent an es timated $42.2 billion in cleanup and compensation (Reuters, 2014). Another key weakness is its non-competitiveness in the alternative energy sector. Despite being a major player in the oil patience, majority of consumers are be quiet unaware of the companys involvement in alternative energy (Bamberg, 2000). The inability to implement long-term regulatory mechanism to cushion it from the highly volatile petroleum prices is also a key weakness of the company.BPs profits and its current strong financial position present an opportunity for the company to initiate new projects. The companys biggest opportunity is investiture in alternative energy. The BP Solar Home Solutions initially introduced in untried York can be expanded into other regions especially within the American and European markets. This will guarantee the company more customers who prefer the little bely solar energy. The company also has an opportunity to expand its exportation markets to Asia and South America. Di scoveries of more oil wells and increasing prices of oil and gas are additional opportunities that the company can take advantage of (Smith, 2011).major(ip) players in the oil and gas industry especially the Royal Dutch Shell, Exxon Mobil, and Chevron pose the greatest holy terror to BP. The implementation of environmentally deceitful policy and poor management of natural disasters such as the deadly spills a lot disrupt the companys operation (Bruland, 2003). Other threats include, corroding in BPs pipeline network, occasional refinery explosions, multiple lawsuits emanating from ecological disasters and the go on sale of BPs corporate owned stations. Declining operations in several(prenominal) 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 louver forces model to analyze an organizations competitiveness. These i nclude threats of entrants, bargaining strength 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 building 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 plate in the industry, the threat of new entrance is low.There are a number of substitute products such as hydroelectricity, 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 importance of oil in fuelling cars, running industries and generating electricity makes it essential and useful to sectors of the economy (Ferrie r, 2009). Threats of substitutes are therefore, low since alternative products are less competitive. The oil and gas industry beget considerable number of suppliers ranging from private corporations to governments. There are also a number of potential buyers similar to BP. Besides, BPs vertical desegregation in its operations is similar to that of its key competitors (Stiel, 2003). The bargaining power of suppliers is consequently rated as medium.The 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 bleed to choose products with either lower prices or that have better terms. On the flipside, buyers are many hence even if a cross theatrical role chooses to use the products of their competitors, BPs 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 produc e a number of low differentiated products (Stiel, 2003). Key competitors such as Chevron, Total and Royal Dutch Shell have established well recognized brands with significant client base. This implies that BP and its competitors have all adapted 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 trade that can be used to venture into alternative energy research to boost its manufacturing capacity and increase its global presence. The SWOT and Porters five forces analyses indicates that, the oil and gas industrys major players are well established conglomerates with massive financial resources hence high level of competitive rivalry. The attractiveness of the industry makes both the powers of buyers and that of suppliers medium while the threat of substitu te and new entrance low.BP should increase its strategic investment in R&D in order to maximize production and figure out new markets. It should also negotiate with governments and other firms in order to exploit emerging markets such as China. The company should also consider construct its brand value thereby regaining its image adversely alter by the recent 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 Petroleum and Global Oil 1950-1975 The Challenge OfNationalism. Cambridge Cambridge University Press.Bruland, K. (2003). British technology and European industrialization the Norwegian textileIndustry in the mid-nineteenth century. Cambridge, Cambridge University Press.BP Plc. (2014). BP statistical Review of World Energy June 2014.BP Plc. (2014). BP at a Glance. Online 3 September, 2017. on tap(predicate) FromBlack, E. (20 11). British petroleum and the redline agreement. Washington, DC Dialog Press.Ferrier, R. W. (2009). The history of the British Petroleum Company. Cambridge, CambridgeUniversity Press.Honnungar, V. (2011). British Petroleum Oil Spill Crisis and Aftermath mergedGovernance and Communication at BP during the disaster. Munich GRIN VerlagPorter, M.E. (1980) Competitive Strategy, current York apologize Press. Stiel, P. (2003). BritishPetroleum A Global Company in a Global World. Online 3 September, 2017. Available From http//www.pstiel.de/fileadmin/pstiel.de/Download/english_globalisation.pdfSmith, N. J. (2011).The Sea of Lost fortune North Sea Oil and Gas, British Industry andThe Offshore Supplies Office. sore York Elsevier.Stock Challenge, (2012). FTSE All-Share Index Ranking as at Close on Fri, 31 October 2014.Online 3 September, 2017. Available From http//www.stockchallenge.co.uk/ftse.phpUph, C. (2010). PR Analysis of British Petroleum. New York GRIN Verlag.Also, checkout related EssaysBHP Billiton SWOT Analysis and Porter Five Force Analysis SWOT analysis of Sainsburys Plc Strategic Analysis (SWOT, PESTEL, Porter) of Premier Inn (Whitbread Plc) Summary Reviewer John Review watch 2017-09-06 Reviewed Item Essay BP SWOT and Porter Five Forces Author paygrade 5