Strategic Management Analysis and Tools

This assignment delves into the critical role of strategic management in businesses. It analyzes the macro environment, industry attractiveness using Porter's Five Forces, and employs tools like the BCG matrix to assess market share and growth. The analysis highlights the importance of understanding opportunities, threats, and competitive dynamics for effective business strategy formulation.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
PESTEL analysis on case study by evaluating opportunities and threats..............................1
TASK 2............................................................................................................................................3
Analysis regarding five forces for determine attractiveness of steel industry........................3
TASK 3............................................................................................................................................5
Selection of product and service of business organisation with assessment of growth market
share by evaluating BCG matrix............................................................................................5
Analysis of potential problems related with BCG matrix......................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Strategies are a core part of business which need to understand by managers of a
company properly so that better and efficient working could be evaluated (Bergh and et. al.,
2016). Such strategies required to manage in better and definite manner so that effective and
beneficial results could be disseminate. This project is based on BP Oil and Gas company whom
have a market area of the world wide. Business already establish themselves at many parts of the
world which enable them to generate more and more profit. In this project, certain number of
questions lead to get answer where first one is associated with PESTEL analysis which underpin
and enable in define the major opportunities and threats. The next model which will going to
discuss out is porter five force model analysis for evaluating about attractiveness of world steel
industry. All such considerations will enable in define and determine the better and appropriate
outcome for growth and assess the problems as well which related with BCG matrix.
TASK 1
PESTEL analysis on case study by evaluating opportunities and threats
For every organisation whom operating at vast level need to understand the macro
environment of business properly so that better and effective working could be done (Bettis and
et. al., 2016). Thus, it is essential for business to understand all kinds of influences on business
properly so that better and effective working could be done which enable in deriving appropriate
outcome. The PESTEL analysis on BP oil and gas are define as follow which enable and support
to signify appropriate and effective outcome.
 Political: These associated and related with government interference of a company where
some rules and regulations required to impose by government of some particular country.
BP oil and gas are already operating at vast level where they have 21000 service station
worldwide. In 2013, company merge their operations with with leading Russian
businessmen partnership with Rosneft where state controlled the oil company and BP
have only 18% shares in the market area. This define that ultimate power is in the hands
of government of Russia which define and restrict them to work properly as well as
restrict the capacity of business to deal with other aspects in better manner. Thus,
political intervention create threat for BP at Russian market world just because they have
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a share of 18% only where government could end of this partnership at any course of
moment.
 Economical: Another major aspect for successful business organisation is for the
economical consideration (Engert, Rauter and Baumgartner, 2016). If a country where
organisation operating their operations have good economical condition then it lead to
enhance chances of sustainability as well as made a business capable to accomplish their
targets properly. BP oil gas found a predictions on the basis of Forbes list during the year
2012 to 20202. They clearly stated that during such years, economical growth of China
will lead to 7% per annum, 2% per annum in USA and 1% which is very low in the
Europe. Oil prices
peaked at about $120 a barrel in 2008, before dropping to around $30 as recession took hold in
2009, and recovering to around $100 in 2012. Such extension simplify that economical
conditions of a country made vast impact on business and its operations. Economical
consideration need to understand and assess by BP oil properly which further enable in gain
better and effective outcome. This also work as a major threat for BP which need to understand
and evaluate properly for which strategies could be define in better and effective manner so that
chances of recession could be deal out.
 Social cultural: A major role which used to play by society in business is that they define
as ultimate one which made an positive or negative attribute towards business and its
working (Ginter, 2018). In this aspect, BP need to understand such consideration properly
and evaluate all major benefits as well. Although, they produce the natural energy from
wind, water and solar pumps which facilitate them an option to create a positive response
towards society. This will support in identifying major opportunities from market world
where they have an option to produce energy properly by assessing better and signified
manner of production.
 Technological: A major thing which enable and support many business enterprise is
technological advancement. Technological consideration have to evaluate by business
properly so that they lead to maximise their working ability and capacity as well. New
technological advancement which used to understand and underpin by the BP oil and gas
are fire ice and fracking. Fire ice is eventually equal to the 4,000 times with compared all
natural gas in the year 2010 where as fracking enable in doubling the gas aspect of all the
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world by 2020. This enable and signify better working opportunities for BP as they could
utilise such consideration properly which facilitate them an better option for working and
enable to reach suitable level.
 Environmental: Some environment related factors also evaluated for BP oil and gas
services which used to understand by managers and management of a company in better
manner (Jenkins, Ambrosini and Collier, 2016). All associated environment issues which
could be define for the BP oil and gas are that frackers pollute the water suppliers as well
as it also triggers out the earthquake. As per the University survey, it get identify that
around 8% of the gas arise due to fracking directly harm the atmosphere which determine
as major contributor of global warming. Thus, BP have to assess this aspect which work
like threat for a company and required to address in better manner with appropriate
strategies.
All these related opportunities and threats get address and understand by the BP oil and
gas properly so that they could evaluate and work on them properly by crafting better and
supportive strategies.
TASK 2
Analysis regarding five forces for determine attractiveness of steel industry
From past few years, steel industry seem to be static and unprofitable in nature. During
the year 50 independent steel producers become bankruptcy in USA. But after this aspect, some
major contribute and confidence used to underpin the series of this industry (Moutinho and
Vargas-Sanchez, 2018). Such aspect used to assess and understand by using Porter Five Force
Model so that attractiveness of steel industry could be determine in better and appropriate
manner after such major harms. Threat of substitute: One of a major thing is related with threat of substitute. Although,
many global car manufacturers used steel as a substitute of aluminium in cars etc. Thus,
this assess that as a substitute it work better and less costly than any other. This simplify
and become as a major reason behind attractiveness of steel. Level of competition: The level of competition in this industry tend to rise before the
recession. Although, many companies merger their business with each other so that they
could perform better at keen competitive world. During the year 2006, Mittal Steel buy
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the European Union giant steel producers Arcelor. This define and enhance the level of
competition. The level of competition also become more in nature when China become
and determine as major global leader of steel manufacturer in the world. Bargaining power of customers: The bargaining power of customers in Steel industry is
relatively low as compared with other industries (Trigeorgis and Reuer, 2017). As many
companies used steel as a substitute of others but is could not utilise by others. Thus, with
change course of time, bargaining power of customers become more and more in nature
just because the overall market share lead to get down or fall. The world steel price was
fall down with 40% during year 2012 which define that such industry attract the
producers at some level but till it provide negative outcome many producers shift
themselves. Bargaining power of suppliers: The bargaining power of suppliers is high just because
steel sometimes become the most demanding industry in the world. China determine and
influence many individuals to move towards steel industry where during the year 2011
they work and become global exporter. They individually contribute around 45% of
overall industry manufacturing.
 Threat of new entry: The threat of new entry at steel market is only determine during the
years 2006 when acquisition and merger used to take place. Thus, threat of new entry at
steel industry only could be done when big or vast association merge themselves with
each other.
The world steel industry is attractive at some context but at some point of course it
remain to be unprofitable in nature (Wack, 2017). This account get underpin by evaluating the
case study properly where, it get assess and understand that before recession everything getting
done properly and well. The production tend to rise 50% between the year 2000 to 2008 but a
relatively small amount of fall could be evaluated in the year 2009 with 10%. Thus, such aspect
need to understand by business managers properly which facilitate an option and evaluate that a
rise and fall concept get determine in steel industry from past many years.
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TASK 3
Selection of product and service of business organisation with assessment of growth market
share by evaluating BCG matrix
TESCO is one of a largest and famous retailer in the world with operating in differ
countries like China, UK etc. Management will going to evaluate and underpin about the BCG
matrix so that future growth and profitability could be estimated. A full evaluation of BCG
matrix for TESCO define as follow: Cash cow: In this scenario, TESCO have to evaluate that they have high market share in
the world where as the business growth rate is relatively low (Wheelen and et. al., 2017).
Through this BCG matrix it get identify and evaluated that business need to more focus
on their working and try to target such market area which reflect them better and
appropriate growth. Star: TESCO have high market share as well as have high investment rate. This simplify
that they have good and appropriate future orientation which facilitate them to gain better
and effective results. Question mark: Question mark define that market share of a company is high where as
growth not reach at appropriate extent. Hence, TESCO required to more focus on their
work which facilitate and enable them to grow and diversified their operations properly
because they have high market share in tenure.
 Dog: The last phase which need to understand and assess by the TESCO properly related
with dog where business used to gain low market share with low growth rate market.
TESCO need to understand this section properly so that better and effective delivery of
services and products used to get done.
Analysis of potential problems related with BCG matrix
TESCO need to determine about all such problems which they could face while
performing the BCG matrix for their working. Such attribute enable them to work properly and
thus, effective strategies will going to craft properly:
 It only provide the assessment of business as high market share, high growth rate or low
market share , low growth rate but it is not possible. A business also could be evaluated
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and enable as medium working aspect. Thus, such attribute not get understand and assess
properly by management of a company which define as major problem.
 Market share is not relatively define properly as this could be determine as another major
problem which need to assess and understand by management of a company properly.
 This approach is too simplistic in nature and not reflected complex tenure to understand
but is also not reflect to gain better decision making.
CONCLUSION
It get concluded from the project that strategic management is a major thing on which
business have to work properly. Strategies are a core part of business on which business
association need to work. For this consideration, business have to firstly assess the macro
environment effectively which facilitate an option to define opportunities and threats. Along with
this, five forces analysis will used to define the attractiveness of industry. With appropriate
analysis of BCG matrix management become able to gain and define better market share and
growth rate as well.
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REFERENCES
Books and Journals
Bergh, D. D. and et. al., 2016. Using meta‐analytic structural equation modeling to advance
strategic management research: Guidelines and an empirical illustration via the strategic
leadership‐performance relationship. Strategic Management Journal. 37(3). pp.477-497.
Bettis, R. A. and et. al., 2016. Creating repeatable cumulative knowledge in strategic
management. Strategic Management Journal. 37(2). pp.257-261.
Engert, S., Rauter, R. and Baumgartner, R. J., 2016. Exploring the integration of corporate
sustainability into strategic management: a literature review. Journal of cleaner
production. 112. pp.2833-2850.
Ginter, P. M., 2018. The strategic management of health care organizations. John Wiley & Sons.
Jenkins, M., Ambrosini, V. and Collier, N. eds., 2016. Advanced strategic management: A multi-
perspective approach. Macmillan Education.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Trigeorgis, L. and Reuer, J. J., 2017. Real options theory in strategic management. Strategic
Management Journal. 38(1). pp.42-63.
Wack, P., 2017. Shooting the rapids. Historical Evolution of Strategic Management, Volumes I
and II. 1. p.121.
Wheelen, T. L. and et. al., 2017. Strategic management and business policy. Pearson.
Online
BCG Matrix. 2018. [Online]. Available through :<https://www.managementstudyguide.com/bcg-
matrix.htm>.
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