British Petroleum

Contents
Executive summary.....................................................................................................................................3
Introduction.................................................................................................................................................3
Analysis........................................................................................................................................................4
PESTEL.........................................................................................................................................................4
Political factors........................................................................................................................................4
Economic factors.....................................................................................................................................4
Social Factors...........................................................................................................................................4
Technological Factors..............................................................................................................................5
Environmental Factors.............................................................................................................................5
Legal Factors............................................................................................................................................5
Porter Five forces........................................................................................................................................5
Competition in industry...........................................................................................................................5
Threat of new entrants............................................................................................................................5
Threat of substitute products..................................................................................................................6
Bargaining power of buyers.....................................................................................................................6
Bargaining power of suppliers.................................................................................................................6
Diamond model...........................................................................................................................................6
VRIO Analysis...............................................................................................................................................7
Value........................................................................................................................................................7
Rarity.......................................................................................................................................................7
Imitability................................................................................................................................................7
Organization............................................................................................................................................7
BCG Matrix..................................................................................................................................................8
Star..........................................................................................................................................................8
Cash Cow.................................................................................................................................................8
Question Mark.........................................................................................................................................8
Dog..........................................................................................................................................................8
Recommendations.......................................................................................................................................8
Conclusion...................................................................................................................................................9
References...................................................................................................................................................9
Executive summary
British Petroleum started its operations in 1908 in with the discovery of oil in Persia. Narrowing it down
towards the America’s region, where BP has been operating for many decades. Also to have in depth
view of their transformation into renewable energy resources which is the essential need world now a
days. Keeping in view the competitors of BP which are also the major players of the industry are Shell,
Total and EXXON. In the following report, we will discuss the transformation of British petroleum from
extracting oil and implementing green vision. This report will analyze different aspects of British
petroleum and strategies that are used by the company to implement its new environmental policies.
With the confident strategy of moving forward and transforming themselves to meet the future needs
of their customers.

Introduction
British Petroleum itself is a super major company which takes care of its supply chain and logistics in all
the regions. BP covers all the segments of oil and gas industry, which includes production, exploration,
and refining, distribution and power generation. Their transition from oil to gas and then stepping into
the renewable energy resources has been to perfection, keeping in view as the world moves closer to
breath calmly with the renewable energy resources. “Nevertheless, from the British Petroleum’s client’s
perception, price is still more important than sustainable strategies when they have to choose which
energy company to buy from. According to the green vision of BP and moving towards the sustainable
environment, as the world dynamics have changed due to the climate change and every region is more
concerned about the environment in all aspects. BP has also actively changed their vision. Moreover, the
Net-Zero Carbon Emissions goal presented by the company in February of 2020, change for the better
both BP’s clients and non-clients perception about the company. (Charneca, P. M. C. 2020). The
commitment of BP towards its clients and to meet the renewable energy goals have been equally
respected. The new strategies adopted by BP to handle the new need of the environment and the
clients is their focus with the help of technological advancements. “Renewable energies are the key to
reduce the negative impact of energy production and to mitigate climate change, which will impact the
way energy is produced and distributed to consumers.” (Richter, 2012).
Analysis
In the following report keeping in mind as per the strategic management and its strategies, that help in
making decisions for the organization. “In the business context, strategy or corporate strategy is the
range of decisions that a company makes in order to set its objectives, goals and purposes, and the
respective measures taken to achieve those aims.” (Andrews, 1997).

To analyze their strategies and to analyze the external environment factors of BP, PESTEL analysis and
porters five forces model will be used further. This will help in gaining the information and will allow to
get a perfect grasp over the BP functioning in Americas Region. Furthermore, Diamond model and SWOT
analysis will allow comprehending the company’s operation and how they have transformed themselves
to keep up with the new renewable energy segments.

Moving on and analyzing different strategies that will help to elaborate the functioning of BP in different
aspects. As how different models like PESTEL, Porter five forces model and Diamond model lightens
different areas of BP in regard with the renewable energy resources.

PESTEL
The PESTEL analysis help in describing the macro environmental factors, which includes BP’s, vision for
the renewable energy resources in the long run.

Political factors
In a multinational company like BP it is always a challenge for the management to work and satisfy the
demands of the different countries. Some countries look forward for a new change also improving the
environment through different aspects. In this case leadership plays an important role to set the
guidelines and benefiting the society as a whole with a perfect policy and the environment for the future
to be sustainable and enhancing the green vision. “The corporate leader’s implications of managing a
crisis in this new age are, indeed, complex and surreal in comparison to previously existing conditions.”
(Nathan A. Heller, 2012).So BP’s new green vision has enlighten many countries and has taken steps to
go green to have sustainable environment with renewable energy resources.

Economic factors
The transformation into renewable energy covers many aspect including the economic factors. These
factors have to be dealt very actively in order to extract the benefits. Which includes unemployment
rate, growth rate, inflation and the standard of living for the labor. As BP stepped into the renewable
energy resources in America’s region this has helped to provide employment to the locals as well as to
the international workers as well. Moreover this helps in creating a more opportunities for people in
America to work and benefit themselves with the help of BP in transforming into the renewable energy
resources. The economic welfare is important and is linked to new projects that help in both ways.

Social Factors
BP has been very actively meeting the concerns of social factors which involve the culture and the
attitude of the organization towards its consumers and as well as the employees of the company.
Companies like BP have to be very precise and adoptable towards the social factors as their sole purpose
is just not earn, but also participate in the welfare of the society in different ways. This in returns help
the company in future with long lasting benefits in terms of increased sales and workers to work more
efficiently.  “Changes in social trends can impact the demand for a firm’s products and the availability and
willingness of individuals to work” (Annual review BP,2010).

Technological Factors
Stepping into the era of renewable energy resources, technological assistance is one of the main factor
to be implemented on top priority. This allows the company to be efficient and equipped with latest
technology to meet the needs with the best performance. As America itself is among the countries with
top notch technological setup this allows BP to take full advantage to imprint their footsteps in
renewable energy resources. With most professional IT structure in Americas region will allow BP to
move on a faster pace to achieve the goals and guidelines to implement the renewable energy resource
to reduce the carbon emission.

Environmental Factors
Throughout the years, the energy market has been center of criticism for its lack of environmental and
social ethics. The way energy companies exploit oil resources, causing health issues and environmental
degradation is largely questioned by people now a days. In order to ensure the safety of citizens and
environment BP has ensured to take all steps to reduce carbon intensity of its products by 50%. (Annual
Review, 2019).

Legal Factors
Legal factors cause great influence on BP operations. With new laws and keeping in view the moral
hazards the company has to take the right steps, at the right time to have minimum inconvenience. Also
carefully regulating the legal rights regarding wages, health and safety laws to ensure the operations of
the company is not effected in any way.

Porter Five forces

By using porter five forces analysis it will help in identifying the key aspects of BP in the petroleum
industry.

Competition in industry
Competitive industries are the one that leads to new ideas and stretch themselves, beyond the limits to
make them stand out. British petroleum was the first company to acknowledge the climate change and
the urge to move forward with sustainable goals back in 1997. “BP has utilized this position on climate
change to re-brand the organization with a new slogan, Beyond Petroleum,’ which is focusing on
alternative fuels and other types of renewable energy development.”(Susan, 2008). Other companies
like Exxon Mobil, Shell, Chevron and Total energies have been mounted up to the ladder to meet the
environmental needs of renewable resources and give a tough competition to BP.

Threat of new entrants

Although BP is a powerful and an old company with vast financial resources, still in America there is
always a threat or potential of a new entrant which can be a hindrance in the progress for BP. With
improved research facilities and the trend towards the renewable energy resources sparks a profitable
business too many MNC’s who can potentially invest and enter the market.

Threat of substitute products

In the current scenario of renewable energy resources, it is easy to say that there is a very rare chance
for the threat of substitute product. Though there can be a product that might be more efficient then
what BP produces in terms of renewable energy resources.

Bargaining power of buyers

In accordance with the power of buying for consumers as there are not much of the substitutes available
for the consumers. So this allows the company like BP to attract different sets of consumers to purchase
and depend upon the renewable energy resources they provide. Also, as the other competitors are not
fully functional or are not that experienced in energy market giving the edge to BP for low bargaining
power to buyers.

Bargaining power of suppliers

As BP stepped into the renewable energy market way before and has a vast experience and information.
This helps them to have good relations with the suppliers and maintain a low cost renewable energy to
cater the consumers.

Diamond model
The Porter Diamond model explains the factors that can drive competitive advantage for one national
market or economy over another.

BP has the
advantage of
being among the
first company to
work on climate.
cccon change o

It allows them BP is able to

to have capture large
comparative market share in
advantage in America in
Americas renewable
region as old energy sector
entrant.

Other industries
and working
hand in hand
makes them
VRIO Analysis
The VRIO framework is an internal analysis of an organization. Which elaborates the different variables
of the framework, which are valuable, rare, inimitable and organization. For any company going through
the phase of diversification like BP in America, needs to focus in the inside strengths and resources. As
they step up to green vision and focusing on sustainability these 4 elements of VRIO analysis will be
discussed individually.

Value
In case of BP they have vast financial resources as the company operates in many countries with huge
integrated network. This makes them confident in their operations and add value to their network with
highly trusted employees working hand in hand to deliver the best. Furthermore with stepping into
green vision, and diversifying their capital resources with perfect accuracy with help of top management
makes the company highly valuable in the market.

Rarity
BP has an advantage in the terms of capital and financial resources which makes it easier for the
company to stand out as a rarity element. Also the trained employees of BP working in different
countries, keeping in view the guidelines set by the company make them special in regard to the specific
category of VRIO which is rarity. Also the patents that BP possess and the distribution network are rare.

Imitability
As financial resources can be imitated in many ways, though with loyal employees and management it’s
harder in the case of BP to imitate the trained set of employees. IT and production chances are available
to be imitated. On the other side the patents of the company can’t be imitated and the distribution
network. As BP has invested vast amount of time while developing the patents and as they are legally
protected.

Organization
The BP with effective and future sustainability approach has secured its position with investment
opportunities for future. The sustainability approach makes the company more appropriate in their
working, with set targets to be achieved overtime. This happens when the company works with more
unity and help each other to benefit the organization as a whole.
BCG Matrix
The BCG matrix explains the growth share matrix which is a tool that uses graphical representation of
different products and services of the company. This helps the company to make decision about which
products and services to keep, improve or sell.

Star
For BP the Star product will be the oil and gas as they are in the industry for decades and are still reaping
the profit from different regions by providing them with their services.

Cash Cow
Similar to the star the cash cow for BP will be the oil and gas, and as they are going into renewable
energy resources this will be converted to the cash cow later on. As the cash cow is the product which is
consistent for the growth of the company.

Question Mark
The renewable energy resources on which BP is investing right now for the sustainable environment is
the question mark. As they have started to initiate the green vision which is the renewable energy
resources that will help them in future as well to sustain their market share and help them grow with
new and advanced technology. At the moment as the world is rapidly moving to renewable energy
resources, BP now have the right time to capture the market with effective resources.

Dog
For a company like BP the diesel is the Dog. As discussed earlier moving to sustainable environment
diesel is the product which is the most harmful in terms of the green vision of the BP. This product
neither generates very strong cash flow but is still required as BP operates in Oil and gas and diesel is an
essential part of it.

Recommendations
“As the main greenhouse gas, the world has witnessed rapidly increasing carbon dioxide (CO 2) emissions
in the past few decades. The statistics from BP (formerly British Petroleum) are clear to support
this.”(Dong et al. 2018). No doubt, BP has taken full responsibility to meet the new change of renewable
energy market. They are heading towards the right direction with expanding their operations through a
proper channel, which does not only benefit them as a company but also act as a responsible member of
the society helping them grow sustainably. To make it more productive BP can work with other bunch of
companies who are solely working on renewable energy resources. In this way, the experience of BP and
the technological advancements of new companies can be a great reason to have a greater combined
impact on green vision.
Conclusion
At the global level BP has been one of the prominent members to reduce the environmental hazards
and work accordingly. Companies should be able to justify the way of working and the benefits that are
consumed are in the right manner. The policies and strategies should aim to benefit the society as a
whole. BP has taken into consideration that to reduce carbon emissions. The right steps have to be
taken on the right time. Also with everyday changing climate, it should be the top priority of companies
like BP to work in a way to be sustainable and environmental friendly. Therefore, all the companies
should adjust their future energy strategy based on environmental performance to achieve sustainable
economic development.

References
Charneca, P. M. C. (2020). How consumers perceive the impact of sustainable strategies in Energy
Companies: British Petroleum case (Doctoral dissertation).

Cox, M. J. (2008). Sustainable communication: A study of green advertising and audience reception
within the growing arena of corporate social responsibility. Case study: British Petroleum. Earth & E-
nvironment, 3(1), 32-51.

Sadorsky, P. (2009). Renewable energy consumption and income in emerging economies. Energy

policy, 37(10), 4021-4028.

York, R., & Bell, S. E. (2019). Energy transitions or additions?: Why a transition from fossil fuels requires
more than the growth of renewable energy. Energy Research & Social Science, 51, 40-43.

Lu, H., Guo, L., & Zhang, Y. (2019). Oil and gas companies' low-carbon emission transition to integrated
energy companies. Science of the total environment, 686, 1202-1209

Heller, N. A. (2012). Leadership in crisis: An exploration of the British Petroleum Case. International

Journal of Business and Social Science, 3(18).

Lorenz, S., Rabinsky, M., & Wurtzel, J. (2008). Exxon Mobile and British Petroleum: A tale of two
companies or just business as usual?. Michigan: University of Michigan.

Dong, K., Dong, X., & Dong, C. (2019). Determinants of the global and regional CO2 emissions: what
causes what and where?. Applied Economics, 51(46), 5031-5044.