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

organize and Porter quintuplet Forces epitome of British Petroleum (BP)our pose take in experiment Need patron Writing an Essay Contact us Today. Student Submitted Essaysour site Sample Essay AbstractBP Porter Five Forces BP Plc is genius of the leading anoint and gas companies in the world operating in more than than 80 countries and serving close to 13 million customers. The fraternity was ranked third in the FTSE 100 all in all sh atomic take 18 index ranking as at the close of 31st August, 2014 with a market capitalisation of 82,093.2, million US Dollars. BPs major(ip) strengths include strong brand recognition, massive monetary cap efficacy, refined corporate strategy, and the ability to innovate. world-wide reduction in the production of crude cover and earthy gas, low disaster management and inability to accomplish long-term regulatory mechanisms ar the societys let on weaknesses. The confederacy has the opportunity to invest in preference energy ev en though it faces significant aspiration from separate rivals such as Royal Dutch Shell, Exxon Mobil and Chevron. BP Porters Five Forces Analysis of BP reveal low threat of advanced entrants and substitutes, medium talk terms male monarch of both buyers and suppliers, and high rivalry among existing competitors. To remain competitive, the lodge should subjoin strategic investment in R&D, negotiate with governments and other firms to exploit emerging markets, rebuild its brand value and streamline its production and business operation.our site Sample Essay IntroductionFounded in 1908, British Petroleum (BP) is one of the leading embrocate and gas 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 gas products, furnish for transportation, petrochemical products and energy 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 Refining and Marketing and geographic expedition 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 petroleum products and services (BP Plc. 2014).our site Sample Essay BP SWOT AnalysisBPs key strengths are its strong brand recognition and massive financial capability. world the third largest energy company in the world, it is globally acknowledged for high quality petroleum products. Additionally, with an expect total operating cash flow of 2014 at $30 billion, the companys strong finan cial position gives it the opportunity to introduce 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 also a notable strength. This, mate with its strong brand loyalty, enabled it to emerge from the devastating deepwater horizon oil spill of 2010 (Reuters, 2014). The companys ability to innovate and enter into strategic ventures with other governments 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 number of government agencies.A global reduction in the production of crude oil and natural gas is a key weakness of the company. Poor public image as a entrust of the North Alaska and deep-water oil spills also led to serious challenges for the company. Not only did it face deplorable charges, it spent an estimated $42.2 billion in cleanup and compensati on (Reuters, 2014). Another key weakness is its non-competitiveness in the alternative energy sector. Despite being a major player in the oil industry, majority of consumers are still 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 investing in alternative energy. The BP Solar family unit Solutions initially introduced in New York can be expanded into other regions especially within the American and European markets. This will guarantee the company more customers who prefer the less costly solar energy. The company also has an opportunity to expand its export markets to Asia and South America. Discoveries of more oil swell ups and increasing prices of o il and gas are additional opportunities that the company can take advantage of (Smith, 2011).Major players in the oil and gas industry especially the Royal Dutch Shell, Exxon Mobil, and Chevron pose the greatest threat to BP. The capital punishment of environmentally unsound policy and poor management of natural disasters such as the toxic spills very much disrupt the companys operation (Bruland, 2003). Other threats include, corrosion in BPs pipeline network, periodic refinery explosions, multiple lawsuits emanating from ecological disasters and the continued sale of BPs corporate owned stations. Declining operations in some(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 five forces model to analyze an organizations competitiveness. These include threats of entrants, bar absorbing power of suppliers, ba rgaining 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 requirement 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 scale in the industry, the threat of new intrigue 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 frequently extremely high. The importance 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 si nce alternative products are less competitive. The oil and gas industry have considerable number of suppliers ranging from private corporations to governments. There are also a number of potential buyers sympathetic to BP. Besides, BPs unsloped integration 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 tend to choose products with either lower prices or that have better terms. On the flipside, buyers are many hence even if a cross section 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 produce a number of low secernate products (Stiel, 2003). Key competi tors 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 sustenance 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 attraction of the industry makes both the powers of buyers and that of suppliers medium while the threat of substitute and new entrance low.BP should increase its strategic investment in R&D in order to maximize production and exploit 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 rebuilding its brand value thereby regaining its image adversely affected 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 reality Energy June 2014.BP Plc. (2014). BP at a Glance. Online 3 September, 2017. Available FromBlack, E. (2011). British petroleum and the redline agreement. Washington, DC dialog Pre ss.Ferrier, R. W. (2009). The history of the British Petroleum Company. Cambridge, CambridgeUniversity Press.Honnungar, V. (2011). British Petroleum Oil Spill Crisis and Aftermath Corporatebrass section and Communication at BP during the disaster. Munich GRIN VerlagPorter, M.E. (1980) Competitive Strategy, New York Free 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 luck North Sea Oil and Gas, British Industry andThe Offshore Supplies Office. New York Elsevier.Stock Challenge, (2012). FTSE All-Share Index be 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 Sainsbury s Plc Strategic Analysis (SWOT, PESTEL, Porter) of Premier Inn (Whitbread Plc) Summary Reviewer put-on Review Date 2017-09-06 Reviewed Item Essay BP SWOT and Porter Five Forces Author Rating 5