Bp (British Petroleum) Swot, Porters Five, Key Success Factors

BUS101 International Business Environment

Small Group Assignment for Spring Semester 2008

Table of Contents

1. Terms of reference

2. Procedure

3. British Petroleum

3.1. British Petroleum (BP)

3.2. Background

4. British petroleum SWOT analysis

4.1. What is SWOT analysis?

4.2. Strengths

4.3. Weaknesses

4.4. Opportunities

4.5. Threats

5. BP Porter’s Five Forces Analysis

5.1. What is Porter’s Five Forces Analysis?

5.2. Threat of New Entrants

5.3. Buyer Bargaining Power

5.4. Supplier Bargaining Power

5.5. Threat of Substitutes

5.6. Rivalry

6. Key Success Factors

7. Conclusion

8. Referencing

9. Meetings Log and Reflections

1. Terms of reference

This report has been produced by Mariya Barbudeva, Davide Mariani and Mohammed Alsuhaimi upon the request of Dominic Laffy, course leader of BUS101 International Business Environment. The report is due 18 Apr 2008 (end of week 8).

2. Procedure

The information, which is necessary for the following report has been taken from different electronic and printed sources. For full details please refer to bibliography, which can be found at the end of this report.

3. British Petroleum

3.1. British Petroleum (BP)

British Petroleum is a company, which focuses mainly on petroleum, but has some interest in alternative energy. It is one of the world’s largest oil and gas companies, which serves over 13 million consumers in more than 100 countries. The market of alternative energy is not as well developed, nor as profitable as oil, but it is a good future investment with the recently raising environmental concerns. BP recognized this on time and entered the solar market in the year of 1973.( History of BP Solar )

3.2. Background

Formed in 1908, The British Petroleum Company was originally called The Anglo-Persian Oil Company. The current name was given in 1954. BP adopted a re-positioning strategy in 1997 and the group chief executive, Lord John Browne, addressed the threat of global warming. Even though the oil industry does not have a good reputation in taking responsibility, BP was put first on the list of Fortune Magazine’s Global 100 Companies on Corporate Strategy. (“Changing the Game.” Stanford Social Innovation Review )

4. British Petroleum SWOT analysis

4.1. What is SWOT analysis?

SWOT analysis is a useful tool for decision making and understanding a certain business. SWOT is an acronym for Strengths, Weaknesses (internal for a corporation), Opportunities and Treats (external for an organisation). SWOT analysis is functional for strategic planning, business planning, marketing, business and product development, as well as research reports.

4.2. Strengths

Financial assets. The current financial situation gives the opportunity to BP to research different areas and expand the best way possible. It is capable to invest big amounts in developing alternative energy strategies. BP profits for the year of 2005 were $22.341 billion.( BP.)

Innovation. BP signed a strategic joint venture to enter China’s solar market and provide narrow manufacturing capacity. (BP Forms BP Alternative Energy) Their solar business even became profitable in 2004. (BP.) Another big accomplishment for them is providing the solar panels for the United States Marine Corps Air-Ground Combat centre. Their projects include the new Lufthansa Terminal in Munich, Germany.

Corporate strategy. BP corporate strategy is proven to be one of the best. They have recovered from many crises by now and managed to maintain their good name. They have responsible and environmental friendly corporate strategy, nevertheless the industry they are in.

Public awareness. BP has and still is creating different programs to increase public awareness. They have created a program, according to which, every time a celebrity installs a solar panel in their house, BP donates one to a low-income family. They have been trying to create awareness about the current situation of energy industry in schools around the world.

Brand recognition. BP has created a well-known brand for high quality.

4.3. Weaknesses

March, 2006. Thousands of litres of crude oil were spilled on the North Slope of Alaska when a BP pipeline cracked.(BP.) This accident has created big difficulties for BP and especially for its �environmental friendly’ image. The public image they are trying to create is almost unthinkable for an oil company.

Oil and alternative energy sector. BP is exceptionally strong in the oil industry, but far not that competitive in the alternative energy sector. People are not aware for their entrance there. Nevertheless the brand recognition is high.

Differences between the oil industry and solar industry. BP is trying to enter the alternative energy sector and become leaders, but there are also few problems, which may occur. The difference between photovoltaic industry and the ability to refine oil, transport, mine, drill and store is huge. BP vast knowledge in oil is unusable in the alternative energy sector.

4.4. Opportunities

Profits.