Bp's Pestel Analysis

PESTEL:

Political:

BP is a multinational energy company that targets the global market. This implies the success of its operations heavily relies on the political temperatures across the world. Currently, world energy markets are becoming more volatile due to the threat of geopolitical instability. However, there are concerns over the reducing oil prices and changing oil requirements, due to the fact that there are greater climate de-stabilizations from the CO2  emissions which leads to many countries are now considering for alternative energy sources.

Economic:

In developed countries like the UK, America and Australia, there are expectations of growth in income levels, driving demand for the company’s products as these country are less likely to have a huge impact on the sustainability of BP. However, developing countries might still face economic challenges which are very likely to reflect on BP’s profitability. As the economy are underpinned by its energy supply while the market will see an upsurge of demand by almost 60 percent, but most of the demand are directed to fossil fuels, nuclear and renewable energy.

Social:

The social standards are rapidly changing, and these may have an impact on the demand for petroleum products and availability of labour, the rate of population growth is also another social factor that might influence BP’s operations in the global market sooner or later. On the other hand, People’s worldview is starting to change to a concern over the sustainability of the future, although this is not expected to change affectedly to justify general changes to energy use for some time.

Technology:

In all the areas that British Petroleum deals, there is need for technological developments. The International Energy Agency has stated that alternative energy market will be underpinned by technological breakthroughs which will be a challenge for BP in order to stay competitive in the market. Other than that, research has shown technology is the key point for company to stay their competitiveness in the alternative energy industry; whilst alternative energy technologies are underpinned by 48 critical success factors across technological, commercial, socio-political and organizational categories.