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1.0 British Petroleum

BP is one of the world's leading international oil and gas companies. Through our work we
provide customers with fuel for transportation, energy for heat and light, lubricants to keep
engines moving, and the petrochemicals products used to make everyday items as diverse as
paints, clothes and packaging.

1.1 Mission and Vision

Mission Statement:
Long term commitment to prosper as an integrated, international company with strong
technology base and a focused marketing effort.

Vision Statement:
To improve our performance and have a steady disciplined growth.

Strategic Culture:
BPs culture rest heavily on their employees. They are the key to BPs future growth.
Technology is key to both up and downstream operations.
HSE- raises health standards, no damage to environment or people.
Better relationships with countries where operations already exist.

1.2 BPs Facts and figures

(as at, or for the year ended, 31 December 2012, updated for IFRS 11 and IAS19 where
relevant)
Countries of operation :Over 80
Number of employees :85,900
Sales and other operating revenues :$375,765 million
Cash flow :$20.5 billion
Replacement cost profit :$11.4 billion
Proved reserves :17,000 million barrels of oil equivalent
Retail sites :20,700
Refineries (wholly or partly owned) :15
Refining throughputs :2,354 thousand barrels per day

1.3 BPs Four Core Values

BP specifies four core values to express the way the organization does business and help
translate the mission into practical action:
Progressive: BP is always looking for new and better ways to conduct business.
Innovative: Through the creative approaches of employees, and the development
and application of cutting-edge drilling technology, BP seeks breakthrough
solutions for its customers.
Green: BP is committed to environmental leadershipthe proactive and
responsible treatment of the planets natural resources and developing lower
carbon emission energy sources.


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Performance-driven: BP sets the global standards of performance on financial and
environmental dimensions, as well as safety, growth, and customer and employee
satisfaction.


1.4 List of Products

Each of BPs brands has its own heritage and personality, but they all have one thing in
common - they all symbolize, embody or provide tremendous energy.




Quality automotive fuels
Global lubricants
specialist
Stores
Good food and quality coffee
Petrol/Gasoline


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2.0 BPs SWOT Analysis

SWOT analysis At a Glance:
Strengths
Human Resources
Technology
Mutual Advantage
Upgrading Refineries
Infrastructure/Leadership
Fuels in Europe
Improving Operational Efficiencies

Opportunities
Technological Advances
Emerging Markets (Asia/Pacific)
Oil remains main source of
energy
Formation of European Union
Introduction of euro
Weaknesses
Recovering from large debt
Weak market outside of Europe
Less upstream investment to replace
production in long run
Dependent on small no of gas fields
Producing more than it needs for its
operations
Threats
Environmental Regulations
Substitute Products
Power of OPEC
Overcapacity in mature markets
Supermarkets gaining market
share
European Economic woes
Commoditization no brand
equity in Europe
Tight oligopoly, mature market,
cutthroat competition

3.0 PEST Analysis

Political
Geopolitical Instability
Governments encouraging more
sustainable forms of energy
Growing oil requirements of
buoyant Chinese economy
Social
Kyoto agreement (CO2 emissions)
Awareness in people regarding
sustainability in the future.
Economic
Economy is underpinned by its
energy supply
Energy markets demands increasing
Alternative energy sources
increasing
Technology
Technological breakthrough
Competitiveness in the alternative
energy industries.



4.0 Economic & Global OTs

Economic Opportunity:
Oil prices increased this year.
Benefit integrated oil companies overall.
Specifically help Exploration & Production companies.
Hurt Refining & Marketing companies.
Some signs of modest economic upturn in European Union:
GDP increased 0.5% in 1
st
Qtr. 1996.
Exports have grown larger than imports over the last five years.


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European International Conference held this year; two main concerns:
Expansion of EU to the east and south.
Review of the Maastricht Treaty.
Economic Threats:
Continued slow growth throughout EU
Growth rate down from 4% to 2.5% per year over last two decades
GDP of 15 EU states down to 6.91 billion
GDP/PPS (purchasing power standards) per head is only 18,446
Consistently high unemployment
Average of 15 EU states is 10.8%
Average of 11 euro-zone states is 11.5%
Country-specific inflation problems across Europe.
Productivity growth is steadily declining.
Difficulty financing new projects.

Global Opportunity:
North American SUVs becoming more popular.
Once restructuring and deregulation happen in Japan greater competition will occur
stimulating more consumption
Relaxation of control over markets in China and Asia will boost demand for oil.

Global Threats:
North American economy becoming more efficient, moving from manufacturing to
services.
Russian economy in shambles, many people jobless, energy consumption falling
(energy inefficient).
Africas & Mid East political turmoil blocking economic growth. Both resource rich.
Potential threat of conflicts with oil-rich countries.

5.0 International Business Strategy of BP

5.1 Global Competitive Environment of BP

In analyzing the competitive environment of the BP, as earlier stated, a very useful tool to
consider is the five forces model of competition which was developed by Professor Michael
Porter of the Harvard Business School in 1980, this model shows the organizations
competitiveness in the industry and also how attractive the industry in question is. The five
forces identified by porter include:
Threat of entrants from organizations currently outside the industry
Power of suppliers i.e. providers of inputs or materials for production
Power of buyers i.e. recipients of products/services
Threat of substitutes i.e. things customers might buy instead
Competitors/rivalry competition within the industry

THREAT OF NEW ENTRANCE: The threat of entrance into the oil and gas industry is Low
due to the fact that there is high barrier of entrance into the industry. Investment
requirements; Some of the companies that constitutes the oil and gas industry like BP uses
heavy and very expensive equipments at well sites and also the availability of human
resources in terms of scarcity of subsurface reservoir engineer and geologist all this contribute
to the high barrier of entrance into the industry.



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POWER OF THE SUPPLIER: The bargaining power of suppliers is Medium and this is
because there is the suppliers according to oil and gas statistics (www.oilandgassuppliers.com)
show that there are quite a number of suppliers and also the buyers as well such as Bp and
some other companies that constitute the industry are quite a number as well.

POWER OF BUYERS: The balance of power shifts toward buyers. Oil is a commodity and
one company's oil is not that much different from another companys and this leads buyers
to go in favor of lower prices and or better contract terms. The power of the buyer will be
regarded has being Medium because buyers are many and can switch from the consumption
of Bp products to another oil and gas companys product and at the same time an individual
buyers decision does not necessarily have an impact on the company and the industry is the
key supplying group to the many buyers.

THREAT OF SUBSTITUTES: Threat of substitutes is Low and the Substitutes for the oil and
gas industry includes alternative fuels such as coal, gas, solar power, wind power,
hydroelectricity and nuclear energy which is still in the developing phase as in the case of Bp
(Bp.com) and also involves high cost of production.

COMPETITIVE RIVALRY: The level of competitive rivalry is high; the industry is
characterized by big companies which produce low differentiated products and there is low
threat of substitute and also low threat of new entrance into the oil and gas industry.

Using both frameworks, porters five forces and porters strategic groups, we can observe that
the industrys major players are the giant companies in the industry, and the level of rivalry is
high and the industry is somewhat attractive to an extent although the powers of both the
suppliers and buyers is medium but the threat of new entrance and substitute is low which
means that profitability is not reduced by substitute and the industry is attractive.

Longer-term Objectives
Maintain momentum on safety and risk reduction.
Develop and apply new technologies that access new hydrocarbons or extract
and process them more efficiently

Upstream
Generate strong returns within a disciplined nancial framework.
Deliver growth through increased reinvestment in higher return opportunities.
Maintain our strong incumbent positions and a diversied portfolio of deep water, giant
elds and gas value chains.
Build material new positions for the long term

Downstream
Grow free cash ow
Reduce our exposure to rening when not part of an integrated value chain.
Re-orientate the geographic mix of our downstream footprint to growth markets.



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6.0 Primary Activities

Inbound Logistics includes warehousing, materials handling, inventory control, etc.
Operations are the activities that transform inputs into finished products.
Outbound Logistics includes the activities that store and distribute products to buyers
Marketing and Sales are the activities that provide the means for the buyer to purchase
Service includes activities which enhance or maintain the value such as installation,
repair, parts supply, etc.).

BPs primary activities include research and development in terms of technological innovations,
production creation of fuels and other products, marketing and sales in terms of distribution
via service stations and lastly services to the customers and the supportive activities include
the company infrastructure like buildings and equipment, information system, human
resources (skill employers) and finance in terms of cash.

7.0 BPs Global Marketing

Multinational corporations operating in complex and diverse political, economic, social and
cultural environments have to improve, adjust and develop their marketing strategies on a
regular basis. Changing environmental factors create new conditions for their operating, which
often require considerable and serious changes in strategic decision-making and positioning
of companies. Inflexible and rigid firms will cease to be competitive in the market every time
changes occur. The aim of the present report is to identify the past and present changes in
marketing strategy of BP, which have occurred under the pressure of environmental factors.

7.1 BPs 4P

BP has some unique characteristics that influence how we follow the 4Ps of marketing
product, price, place and promotion.

1. Product: Fuel is a commodity product offered by all the oil companies in all over the
world. It is difficult to offer customers a point of difference with fuels. However, BP does
so by selling petrol and diesel that is better for the environment. BP is the only oil company
in world to sell superior fuels that are kinder to the environment. BPs Products Line is:
Fuels & stations
Motor Oils& Lubricants
Convenience Shop

2. Price: With common products in the oil industry, prices between competitors are easily
matched, which means its difficult to differentiate our product based on price. If BPs
competitors undercut us on price, BP see significant losses in volumes sold. A one cent
per liter price reduction requires retailers to achieve a 25% increase in volume to break
even on site. Pricing Strategy is:
Competition Based
Profit Oriented for Extremely Inelastic demand
Invigorate

3. Place: BPs network of service stations is a vital strength in marketing strategy we have
some of the best locations for the service they provide. And research shows customers
mainly choose fuel retailers based on their location. They have a significant investment in
ensuring right number and quality of locations for our customers. Strategy is:
Direct and Indirect Marketing


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Worldwide Retail Network
Distribution Channel

4. Promotion: Research shows that customers respond well to our promotion campaigns,
such as the AA Rewards programme. Our loyalty programmes are a valuable point of
differentiation; we use them to drive sales volumes and counter our competitors activity.
BPs main promotional focus is on:
Commercials
Out of Home advertizing
Pumps reward program
CSR Activity


7.2 Market Segments

This consists of a group of customers who share a common need or want. The task was to
identity the different segments in the target market in order to target them. With segment
marketing, the company offers a better design, price, delivers the product better and is able
to fine-tune the marketing program. The segment marketing was divided into geographic
segmentation and demographic segmentation.

Geographic segmentation
Population Density
Territory
Weather

Demographics segmentation
Income
Occupation
Age
Behavioral and Psychographic Segmentation
Green Revolution and environment consciousness
Luxury of Travel

7.3 Market Promotion

BPs strategy was a promotional campaign to transform BPs retail brand image at its locations
in the United States. Buying gasoline is a low involvement purchase and consumers have low
expectations regarding their purchase experiences. Armed with that consumer insight, BP
created and executed the $45 million Helios Power advertising and brand-building campaign,
which is an extension of BPs Beyond Petroleum corporate campaign that began in the early
2000s. The Helios Power campaign consisted of the following marketing tactics:
A little better tagline. BP customers can expect to receive a little better experience
at its service stations and other retail outlets compared to those of its competitors.
Hand elaborates, In this market, a little better means a lot. People see refueling as a
necessary and unpleasant chore. However, BP can be cleaner and friendlier, and thats
why people will choose us rather than our competitors. And this choice will be made
on an emotional basis because customers like what we stand for.

Animated TV ads. These feature a family of characters (the Lighthouse family, the
Babies, and the Beeps) and a catchy tune designed to reinforce the emotional appeal
of the BP brand. The TV ads aired during some of the top U.S. TV shows (American


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Idol, Ugly Betty) and also had exposure on YouTube. The purposes of the ads were to
generate awareness of and an emotional connection to the BP brand and its offerings.

In-store give-aways. At the launch in April 2007, environmentally friendly paper bags,
T-shirts with a fun new look from the campaign, kids activity books and trading cards
featuring the campaign characters, and sunflower seed packets were handed out to
customers throughout the entire network of BP stations.

Unique Web site. The www.alittlebettergasstation.com Web site features the Gas
Mania interactive game, selected animations, ringtones, screensavers, a sweepstakes,
and the TV ads.

Street teams. BP and Ford teamed up to promote the use of BPs Ultimate gasoline in
Fords new Edge automobile. Videos featuring groups of college-aged students were
created to showcase the BP brand in Florida and the ARCO brand in California.

7.4 Branding

Branding is all about creating alignment of companys business processes with its corporate
culture. BP (BP) provides a case in point of a brand that got way out front of its business
process and culture to produce tremendous exposure to risk. Back in 2000, BP announced a
major change in posture from "BP" to "Beyond Petroleum" and spent hundreds of millions of
dollars promoting their new position. Only BP is the only global energy company moving to
new sources of energy that includes solar power.

BP Three Branding Themes:
BP Progressive and Profitable (appeals to Investors Archetype) Moving to new and
profitable sources of energy for the future.

BP Business Alternative Energy Sources (appeals to Business Archetype) Developing
more efficient and alternative forms of energy to move you ahead.

BP Beyond Petroleum (appeals to Public Perception Archetype) Investing for a
Greener future

BP Brand attributes supporting being only:
BP Green BP is the only energy company investing in and pursuing alternative energy
sources; namely solar power

BP Progressive BP is striving to find more efficient ways to produce energy with
proven leadership in solar power

BP Quality BP focuses on safety and operational excellence

BPs Brand Archetypes:
BP Investors Archetype: Investors are looking for profitable companies with less
investment risk. BP is the only company vs. its direct competition coming up with
unique and profitable alternative energy sources.

BP Business Archetype: BP helps businesses be more energy efficient and green
through partnering. BP provides multiple energy alternatives.



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BP Public Perception Archetype: The lesser evil of oil companies, BP is the greenest
energy company with demonstrated leadership in solar power.


8.0 Conclusion

BP is back in business in the deep waters of the Gulf of Mexico, having recently received its
first permit to drill since the explosion on their Deepwater Horizon rig last year that killed 11
people and ruptured the Macondo well hemorrhaging millions of barrels of oil into the Gulf
the largest offshore oil spill in U.S. history. That explosion destroyed ten years of green
marketing for BP which adopted Beyond Petroleum tagline and cheery green and yellow
sunburst logo in 2000 as the ensuing environmental disaster plunged the brand into a
nightmare as deep as the waters it drills.

The meet our people and storytelling strategy is one small step in BPs post-Gulf branding,
focused on its human resources rather than product or promises.

It may be concluded that the main strategic changes undertaken by BP in response to the
turbulent and dynamic environment are contracts with the governments to avoid political risks,
moving to more stable countries such as India from the northern Africa, acquisition of the
solar panel manufacturers, investment in wind and solar projects, moving manufacturing
facilities to China, investment in energy efficiency, reduction of carbon content in fuels,
participation in 'green' activities an 'green washing'. The company had to transform its generic
strategy from cost leadership to differentiation since cost reducing practices had led to oil
spills and leaks. It may be summarized that the identified changes were necessary.
Nevertheless, the company could have been more honest and open in its CSR projects.




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Bibliography

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Bamberg, J. (2009) The History of the British Petroleum Company, Cambridge: Cambridge
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BP (2001) 'Technology and business - a progress report', [online] Available at:
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http://www.osha.gov/dep/bp/bphistory.html