A strategic management analysis of BP global

British Petroleum ( BP ) is the universe ‘s one of the largest and taking crude oil merchandise industries. It has central offices in London. It operates from six continents and has merchandises and services across 80 states. In past it has faced safety and environmental contentions in its operations it could get the better of all negative images through a concrete focal point and consistent attempts towards sustainable developments.[ I ]It has operations in different parts of universe with some of the hard terrains and utmost clime conditions which is a biggest challenge, BP wants to minimise the environmental impacts by seting a systemic and disciplined attack in its operations, utilizing sophisticated hazard appraisal techniques which will besides assist it in their concern programs, hence BP is integrating its environmental direction system into group-wide operating direction system that helps BP to put precedences for operations based on appraisal of the cardinal hazards, including those related to environmental and societal public presentation.[ two ]

Due to recent oil spill, leaking grapevines in Alaska and the detonation at a Texas refinery company ‘s worldwide repute has been negative so company has given the undertaking to me as pupil of U21 planetary university to bring forth a study on how company has to look at their strategic stableness to stay as standalone oil giant and how company should plan its overall planetary scheme and uninterrupted growing.

BP – Introduction

Web site: hypertext transfer protocol: //www.bp.com

Location of Headquarterss: 1 St. James ‘s Sq. , London, SW1Y 4PD, United Kingdom

Sector & A ; Industry: Basic Materials & A ; Energy

Nature of Business:

1. Oil & A ; Natural Gas Business

2. Wind & A ; Solar Energy Business

3. Bio-fuel Business

4. Energy Security & A ; Energy Diversity Business

5. Technology & A ; Partnership

Merchandises:

1. BP crude oil and derived merchandises

2. BP service Stationss

3. Air BP Aviation Fuels

4. Castrol motor oil

5. ARCO gas Stationss

6. am/pm convenience shops

7. Aral service Stationss solar panels

Historical Background:

BP ( NYSE: BP ) In 2009, the company ‘s production and geographic expedition section produced approx 8.48 million three-dimensional pess of natural gas and 2.53 million barrels of oil per twenty-four hours and company ‘s refinement throughput was mean of 2.28 million barrels/day. BP has expanded its production capacity through improved rig equipment and engineering and enlargements into other states. As of April 2009, BP operates in 29 states including Russia, Algeria, Mexico and many Middle East and African states, while BP ‘s planetary range gives the company an ability to entree “ untapped ” militias, many of its operations are exposed to political hazard in those states. In peculiar, BP ‘s Russian operations faced significantly managerial jobs in 2008, but these tensenesss eased in January 2010, History says that company has engagement in some environmental, safety and political contentions in its history these are 1965 Sea Gem incident and 2010 Deepwater Horizon oil spill.[ three ]

Its primary listing is on the London Stock Exchange and it is a component of the FTSE 100 Index. It has a secondary listing on the New York Stock Exchange.

BP – Scheme

Current Strategy of BP and its operations revolves around 5 cardinal countries those are[ four ]

Health, security, safety and environment

Employees

Business spouses

Government and communities

Company assets and fiscal unity

BP is besides working on some lower C future initiatives internally they are[ V ]

Energy efficiency within BP operations

Including the monetary value of C in investing determinations

Promoting lowest-cost energy tracts e.g. gas for power coevals

Continued investing in Alternative Energy

a?’ biofuels

a?’ air current

a?’ solar

a?’ C gaining control and segregation

Investing in research and engineering

Apart from this BP besides focuses on production and Exploration and its scheme is turning value for long-run to construct a portfolio of digesting places in the cardinal hydrocarbon around the universe, Polishing and Marketing, which is to keep a portfolio of quality, efficient places, integrated and accessing available market growing in emerging markets and concentrate on accomplishing safe, dependable and compliant operations.

Potential issues

There are Certain External and internal environment of BP which can make issues for future, External environment consists of societal and cultural, proficient, economic, political, legal and authorities factors. These factors are supplying chances and menaces to the company. Internal environment consists of constructions, resources, values, competences, civilization and systems of a company. This helps to place BP strengths and failings in relation to the market. The some of the possible issues are as under.

Gulf of Mexico oil spill has damaged BP ‘s repute, which in bend has made long-run impact on its ability to entree new chances, both around the universe and in US. This created public, political, and industry sentiment towards BP in oil and gas boring activities, it could damage or impair the company ‘s bing commercial relationships with spouses, and host authoritiess. It has besides created a monolithic load of hard currency on it when it was guaranting to convey back everything back to normal and this will in future as good make batch of load on hard currency for BP, this may take to its ability to put in new chances and present long-run growing.[ six ]

Ensure that BP providers understand the procedure and design, and expression at possible issues of taking the providers based on virtue

Need to reexamine work of contractors for all onshore and offshore rig activities

Spouses and employees approach towards the issues which BP faces in their undertakings

BP – Strategic stableness Analysis[ seven ]

BP needs to beef up safety, conformity and hazard direction across the group,

BP needs to turn to its turning accomplishments spread in energy industry and engage right resources

BP need to look at of import facet which needs attending is diversity and inclusion.

BP besides needs to guarantee that it has No tolerance for inappropriate behaviour.

BP needs to prosecute the local communities in their critical component of work.

BP needs to maintain its stockholders and investors informed about group ‘s advancement.

BP need to prosecute with authorities whenever required in respects to confer withing on environment.

BP needs to guarantee that its security understand the nature of the occupation and protect their employees and installations

Core Compititors

BP has four major nucleus rivals today they are Exxon Mobil, Royal Dutch Shell, Chevron and Total S.A.

Exxon Mobil has employed best engineering by keeping a high-quality portfolio of productive assets It has continually improved on it work force in a high-performance clime across the organisation taking to strong fiscal place by guaranting the fiscal resources are employed sagely.[ eight ]

Entire S.A. has good experience of operation in extreme-cold conditions, it is run intoing the associated economic, technological and environmental challenges in Canada and Venezuela, place to the most extended militias.[ nine ]

Shell has a strong accent on a long-run strategic thought that plans its skyline extended 20 old ages into the hereafter, which is much further that 4 or 5 old ages be aftering that most companies engage in.[ x ]

Chevron is one of the major rivals who has been successful in geographic expedition among its other participants and besides has lowest unit support costs in its group.[ xi ]

BP oil boring platforms[ xii ]

Current oil boring: US Shale gas Eagle Ford, US Gulf of Mexico, Egypt Nile Delta, Jordan Risha, Iraq Rumaila, Pakistan Onshore, Indonesia West Papua, Indonesia Kalimantan

Current Exploration: Canada Ellice, US Gulf of Mexico Tiber, Angola ( Leda, Oberon, Tebe )

Future possible sites: Trinidad & A ; Tobago, Algeria, Egypt, Azerbaijan, Oman, Russia & A ; North Sea

Based on the above site inside informations we can state that BP has vast presence in all the major states and can leverage this for future productions.

Further to this I would propose that BP should look at chiefly onshore, shallow H2O oil boring, as it is much safer and can give a encouragement to the production and would be less hazard to catastrophes.

Some of the factors which need to be taken in consideration in this country are:

BP should hold good entree roads and power station and H2O supply in instance of on shore and in instance of off shore should hold choppers and flatboats for pull offing the transit and entree to the installations.

BP should guarantee that they have right people for right work every bit, as working in these complex environment require complex accomplishments and besides they are face of organisation and its capableness to execute these safely and avoid any major catastrophes.

BP should guarantee that they have right spouses and contractors in topographic point when it comes to boring, as they are best known to run in certain countries and understand the geology of Earth.

BP should besides guarantee that they have a model in topographic point when it comes to boring and which looks at right scoping, proficient bounds and no boring surprises and boring values confidence.

Acquisitions & A ; amalgamations[ xiii ]

Below are some of the acquisitions which BP needs to look at to spread out its concern.

Reliance Industries Limited – Oil and Gas Production Sharing Contracts – India ( India )

BP Exploration Company ( Colombia ) Limited ( Colombia )

Pan American Energy, LLC ( Argentina )

BP p.l.c. – Upstream Gas Assets – Canada ( Canada )

Devon Energy Corporation – Deepwater Assets – Azerbaijan ( Azerbaijan )

BP p.l.c. – Permian Basin Assets – United states ( United States )

Devon Energy Corporation – Deepwater Assets – Gulf of Mexico ( United States )

Devon Energy Corporation – Deepwater Assets – Brazil ( Brazil )

LukArco B.V. ( Netherlands )

BP p.l.c. – Coryton Refinery ( United Kingdom )

BP should look at following facets when it comes to any acquisitions these are that it can increase its market power, overcome entry barriers, cut down the cost of new merchandise development, addition velocity to market, cut down hazard, addition variegation, reshape competitory range and develop and larn new capablenesss.

Some of the other factors besides need to be taken in consideration in instance of any acquisition they are rating of mark, Lack of direction focal point, integrating troubles, over-diversification, house size, high grade of purchase and inability to accomplish synergisms, if we guarantee that these are decently address so we wo n’t hold any jobs in acquisitions.

And for a effectual acquisition BP should look geting houses which have complementary resources, and besides guarantee that acquisition is friendly which facilitates integrating in two houses and its resources, the mark needs to be evaluated efficaciously, the mark house needs to hold slack in the signifier of hard currency or debt, the acquired house should hold experience in accommodating alteration and besides go outing research and developments can be emphasized in the new house.[ xiv ]

BP – Future Global Strategies

Based on the above analysis on different countries, I would wish to urge that BP should concentrate on below facets when it comes to using Multidomestic scheme to its organisation.

The key factors which I propose here are

BP should look at all type of energy sectors and need to hold a mix of engineerings which produce dependable and more ecologically acceptable and low-cost and competitively priced.

BP needs to look at unafraid supply and entree to oil, and they should besides look at emerging economic systems outside Europe and Americas.

BP needs to specially concentrate on three factors when it comes to any future scheme these are environment, economic system and societal public presentation.

BP needs to construct a strong corporate administration to turn to all the issues and negative impact which has caused because of recent catastrophes.

BP needs to construct a strong focal point on safety and operational hazard direction to guarantee that all its contractors, spouses and employees understand importance of this in any undertaking.

BP needs to get down concentrating on alternate energy beginnings like Bio-fuels, air current, solar and carbon gaining control as they are the hereafter of energy beginnings traveling frontward, and more & A ; more companies are traveling towards it sing the current environment conditions.

BP should besides concentrate on its cultural diverse employee community when it comes to operation in different states.

BP should make a Disaster recovery program for all the bing sites to guarantee that they are ready for speedy response when it comes to any issue on any of its bing sites.

BP needs to follow the above given conditions when it comes to any new acquisition, as its really of import for a positive and smooth working of its organisation.

BP should travel chiefly in on shore boring and oil geographic expedition, as its already had problem in gulf of Mexico off-shore, and if they are making offshore boring so all the safety steps should be followed from clip to clip.

BP needs to guarantee that it invests in research and engineering to look into for future chances.

BP should besides look at the current investing and possible markets when it comes to its future enlargement, which will guarantee that they are non venerable to other elephantine oil participants.

BP should besides look at energy demand 20 old ages in front so that it will give more penetration into the demand and based on that it can so strategically be after its supply locations around the universe.

BP needs to look at its security sing the current menace of panic onslaughts and other catastrophes in the universe, which will assist it to safeguard its assets.

BP needs to construct a good competitory advantage by holding right resources in topographic point with good capablenesss which will assist drive its concern without any major issues.

BP has good range in acquisition with trust in India and besides Devon Energy in Brazil to concentrate on bio-fuels in that country.

Decision

Based on all the recommendation and strategic attack BP can use Multidomestic scheme to its organisation maintaining in head all the factors above and specially giving emphasis on administration, conformity, operations direction, personal safety and cut down complexness and cost as major subscribers.

BP should follow the above schemes in each country and beef up its place in planetary market place, the chief focal point countries should be on-shore oil boring and alternate energy, as it will be cardinal for future.

BP does n’t hold menace of acquisition by other major planetary giants, as it already has good programs and processs in topographic point to undertake the state of affairs and which can be improved by using points suggested by me.

Best Respects

Aneej Cuncolienkar

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