BP Strategic Management and Sustainability

This report analyses the critical analysis of oil production sector and competitive environment of British Petroleum in regard of studying their competitive status within the sector. It also covers the sustainability regarding the strategic management process.

Strategic Management
and Sustainability

Table of Contents
INTRODUCTION...........................................................................................................................1
Overview................................................................................................................................1
MAIN BODY...................................................................................................................................1
Critical Analysis of Industry as well as The Sector...............................................................2
Competitive Environment of British Petroleum.....................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic management is undertaken as the continuous procedure regarding the effective
analysis, planning, monitoring and assessing the needs of company in terms of meeting and
achieving their suitable goals and objectives. Prominent changes in business and its environment
will need organisations to pervasively modify their strategies for maintaining overall growth.
Sustainable strategic management means making proper efforts and taking initiatives for the
further improvement of social and environmental impacts of human activities (De Stefano,
Bagdadli and Camuffo, 2018). For this report, British Petroleum is considered which is the
largest energy organisation across the world, established in 1909 and headquarter in
Westminster, London, UK. The report leads to cover the critical analysis of oil production sector
and also the suitable analysis of competitive environment of British Petroleum in regard of
studying their competitive status within the sector.
Overview
It has been analysed that in 2021, the petrol stations were paused after the worldwide
shortage of supplies for the heavy vehicles. For this, British Petroleum apologised for the present
condition for the shortage of fuel supply in their shops within UK. They further explain that
some of their supply sites are temporarily closed because of the shortage of crude oil and diesel
suppliers. It was also examined that this situation occurs after meeting among the government
and executives from the big organisations regarding the Britain’s supply chain issues.
Further, they also added a statement by Downing street claimed that there is not the shortage
of fuels. It leads to put more political pressure regarding the growing demand to take further
actions in regard of ease shortage for the supply chain and labour during the Brexit and
pandemic. The organisations are planning to create visa schemes or outsourcing things to attract
workers on farms, road haulage firms and industries. Despite from this, the overall situation is
being threatened by Rod McKenzie of Road Haulage Association, which was accused by the
ministers by dramatic opposition regarding the start of visa schemes to attract pool of candidates.
MAIN BODY
The sustainability regarding the strategic management process is useful for company to
accumulate the facts and figures regarding the prevailing scenarios, plan and formulate them,
apply and examine its overall impact on the management strategies. For this, both internal and
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external factors lead to offer imperatives for the strategic management approach of company to
maintain sustainability into the internal and external factors.
Critical Analysis of Industry as well as The Sector
British Petroleum deals in oil and gas company that include the supplying of fuel and
power across several nations at global level (Kallmuenzer and et. al., 2018). It is considered as
the major giants which are included into world’s oil and gas operations and supplying power
across different countries across the world. The suitable analysis of sector in which British
petroleum operates is discussed as underneath:
SWOT Analysis
It depicts the examination of internal and external factors and also review them as per
their strengths, weaknesses, opportunities and threats from the impact of external environment
and further opportunities that influences the strategic decisions within the company.
Strengths: The company operates within oil and gas as it has multiple places across the
world. It has suitable strings for different retail brands and subsidiaries which are situated at the
different places. The company has different extensions like BP connect, BP express and Burma
control. In the UK’s economy, it depicts that around 13 to 14% of its exchange index as the
British Petrol has effective contribution in Lucrative sector which is undertaken as the barometer
organisations regarding the growth and failure of UK’s economy (Khatter and et. al., 2019).
British Petroleum has strong and large customer base and its products leads to cover huge market
share. Different retail brand of company includes “BEYOND PETROLEUM” slogan which
made the image of company as energy company and not just an oil company. Even when the
company was affected by huge impact of changing global situations, company has experience the
increment in its revenue because of record increment in gas and oil prices.
Weaknesses: Company has few weaknesses as these are the major factors that leads to
impact the worth within market. Company has been in the controversy since long time in regard
of collaborative oil pipelines construction within the volatile areas which are prone to conflicts
regarding political and environmental concerns. The company also face prominent challenges
like issues regarding environment and convicted to obliteration of minor people and their lives.
Company also face issues regarding the harms which was caused due to the explosion in
different pipelines and accidents in refineries that cause harm (Hellmeister and Richins, 2019).
As a consequence of oil spills and deep water horizon spill deteriorate the image of company.
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Opportunities: There are several unexploited opportunities for British Petroleum which
are hidden from company as they have moved its ways of producing energy since several years.
The company leads to put emphasis on production of energy by sustainable ways like natural
gas, hydro power, wind power and so forth. Besides from this, different groups are also against
these projects and also demand for better creation of opportunities to occur in developing
environment friendly fuels (Bini, Bellucci and Giunta, 2018). The company has come up with
suitable prices and policies that will help it to compete with their rivals like Downing Street,
shell and chevron and so forth. Other opportunities are related with the expansion into frontier
regions where it could have future reserves and enhances crude acquisition in other areas.
Threats: British Petroleum is under persistent threat from several factors which include
changing behaviour of people regarding the political outbreaks and social changes. These
challenges occur from the several factors like social changes, political dilemmas, oil spills, wider
spread destructions, gas leakages, regular lawsuits and so forth. British Petroleum also include
prominent competition that occurs from the competitors like Downing Street, Shell and Chevron
etc. Company also face challenges from Rod McKenzie that leads to generate stress among the
government policies and corporations related to the trade activities.
PESTLE Analysis
PESTLE analysis is the strong analytical tool that helps in screening the overall
environmental conditions to analyse the external factors that prevails the whole sector. It leads to
include those factors that put huge impact and also influences the operations of overall sector.
This framework is important to analyse the changes in regard of preparing to stay in the
competitive business market. PESTLE analysis of this organisation is discussed as underneath: Political: This factors considered as the major one as it impacts the overall growth of
lucrative businesses and the progress of British Petroleum that depends on the political
decisions in its own areas. It undertakes the significant factors like employment
regulations, tax laws and life threating explosions, terrorism and other threats (Schuler
and et. al., 2017). These may lead to disoriented the business operations of an
organisation. In few areas the political interests tend to impact the operating activities of
business. Economic: These factors analyses that how the British Petroleum occur at the strategic
decisions in the specific economy and concerning situation. For instance, the global
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market degradation because of the COVID has decreases the profit margin of company.
For this, the cost of capital was also impact or fluctuate because of increment within the
interest rates and cost of importing and exporting energy commodities has also increases
due to the changes in economic conditions. Social: It include the changes in social behaviour and awareness that has been seen in the
recent years regarding their overall increment in terms of the development of
environment. The overall demand for the increasing of allocation of employee pension
funds has also leads to increase the cost of company as the workers are likely to live
longer (Endiana and et. al., 2020). It means that the suitable challenges to tackle the rapid
changes in environment leads to increases within the upcoming years. Technological: The company has also face significant challenges and opportunities for
developing the renewable, sustainable and global energy outputs. For this, company leads
to opt the effective digital media and IT in regard of monitoring and overall movement of
fuel by its long pipelines (Gold and Schleper, 2017). The company has effective website
by which they can easily communicate with their customers and several issues and their
crucial information regarding the adoption of effective technology and development of
alternate energy sources. Legal: These factors are related with severe cases and allegation on an organisation
which are related with the Gulf of Mexico spills and unintentional or accidental explosion
which are harmful or life threatening (Iivonen, 2018). Along with this, company also
violate certain norms and rules related to the total commission and nevertheless the
pledge regarding the Net Zero 2050. Besides from this, several countries have imposed
minimum wages which leads to enhance, health and safety laws, develop strict
employment regarding the cause that occur in the overall expenses of company.
 Environmental: It depict the tremendous increment in the overall population of human
beings on the planet that occur the requirements for more supply of fuel and energy. For
this, the environmental groups that are continuously increase the concerns of
environmental degradation from which the company is causing (Desore and Narula,
2018). The company is oppressed with the allegation of violating major human rights and
also move towards the tribal people from their overall locations to extend their pipelines
within the indigenous areas.
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Competitive Environment of British Petroleum
Porter’s Five Forces
Bargaining Power of the buyers :
In this force, buyers have more capability to supply less cost or high quality of commodities that
is upto what degree consumers are capable to put the total firm under the force. Here consumers
has a huge amount of ability when their bargaining power is powerful. As in this firm also the
bargaining power of consumers is advanced due to the presence of different seller in the
marketplace (Montiel, Gallo and Antolin-Lopez, 2020). In case of British Petroleum, they create
a huge base of consumers which is very helpful in various ways that is in lessening this power
and it will give a chance to the selected organisation to streamline its procedure of sales and
profitability.
Bargaining Power of suppliers :
This means the powerful bargaining power which permits the supplier to exchange a good cost
or less quality raw materials to their buyers. So this force identifies the way of using power a
firm's supplier has. The growth in the economic process capacity makes it adventurous for the
suppliers for the victorious development of the selected firm. In context to British Petroleum, this
will help in making qan effective supply chain with various suppliers by experimenting with the
variety of designs by utilising different materials.
Threat of New Entrants :
This force refers to see how easy or not to get into a particular firm. New entries in the market
bring new scope and wish to acquire market share and also at the similar time it impacts the
firm's capability (Zainuddin and et. al., 2020). The little duration of time and fund its price for a
challenger to enter in the given industry and will become a booming competition in the market,
the more firm's position will be affected. In relation to British Petroleum, new invention of
commodities and services which brings new consumers to fold but also provide old consumer a
reason to purchase its commodities.
Threat of substitute products :
This force is concentrating on the secondary commodities. It is particularly frightening when
purchasers can easily search secondary option to buy a product with more better cost and good
standardized commodities. Also when buyers can change from one products or service to the
another one in a less cost. In case of British Petroleum, this will help in identifying the consumer
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requirement of the consumers other than what a consumer is purchasing from the market and also
improve the switching price for the consumers.
Rivalry amongst existing competitors :
This force is the primary component on how competitory and profitability a firm or an enterprise
is. And this component is in use to take a decision how degree the present rivalry is in the
industry. It will be broad because of the improved supply of commodities to meet all the
requirements. In relation to British Petroleum, they make a sustainable differentiation to make a
competition in a better way (Batista and Francisco, 2018). This firm will also collaborate with
the challengers to improve the size of an industry other than just the small industry.
Industry Life Cycle
The industry life cycle of British Petroleum is quite similar to other organisations and other
sectors but it is bit different from the product life cycle as it leads to produce the overall supply
side of product life cycle. The stages of industry life cycle include emergence stage, growth,
maturity, stabilisation and decline growth of the product (Turker and Ozdemir, 2019). The
growth rate represents the changes that will takes place within the sector. The production factor
depicts the overall condition of the growth of product with the help of sales and promotion.
Here, the introduction stage where the increment of curve is quite low as the products are
introduced within the market. The second stage is growth stage in which company thrives to
achieve growth in rapid manner and also define its overall status within the market. The next
phase in which company move towards the stabilisation where it neither grow nor decline
(Schulte and Hallstedt, 2017). Apart from this, company is marked with the competitive
aggression and the organisation perform at the same level by representing the over the company.
Besides from this, the company also make proper efforts to extend their branches over and
acquire more area.
The British Petroleum is at this stage in which it situates at trans and also does not have fear
regarding its competitors, as it already reached the position where the competitors cannot reach
and extend their overall area. In third stage which is maturity, the industry cycles where the
overall sector is at the stagnant and growth is enhancing. Further, the last stage is decline or at
the slow growth rate in which company moves towards the liquidation and its capacity and
capability declines as it cannot sustain its production.
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CONCLUSION
From the above discussion it has been summarised that the strategic management and
sustainability is the practice which is helpful for company to effectively plan, monitor, analyse
and assess the needs of company to meet and achieve targeted objectives and goals. The report
leads to present the profitable company that deals with the prominent challenges from the
external environment forces. The report depicts the critical analysis of industry in which the
respective company operate. With the help of strategic tools like SWOT and PESTLE, company
can examine both internal and external factors that leads to impact the business performance and
operations. The report also covers the competitor analysis of British Petroleum through porter’s
five forces and industry life cycle.
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REFERENCES
Books and Journals
Batista, A.A.D.S. and Francisco, A.C.D., 2018. Organizational sustainability practices: A study
of the firms listed by the corporate sustainability index. Sustainability, 10(1), p.226.
Bini, L., Bellucci, M. and Giunta, F., 2018. Integrating sustainability in business model
disclosure: Evidence from the UK mining industry. Journal of cleaner production, 171,
pp.1161-1170.
De Stefano, F., Bagdadli, S. and Camuffo, A., 2018. The HR role in corporate social
responsibility and sustainability: A boundary‐shifting literature review. Human
Resource Management, 57(2), pp.549-566.
Desore, A. and Narula, S.A., 2018. An overview on corporate response towards sustainability
issues in textile industry. Environment, Development and Sustainability, 20(4), pp.1439-
1459.
Endiana, I and et. al., 2020. The effect of green accounting on corporate sustainability and
financial performance. The Journal Of Asian Finance, Economics, And Business, 7(12),
pp.731-738.
Gold, S. and Schleper, M.C., 2017. A pathway towards true sustainability: A recognition
foundation of sustainable supply chain management. European Management
Journal, 35(4), pp.425-429.
Hellmeister, A. and Richins, H., 2019. Green to gold: Beneficial impacts of sustainability
certification and practice on tour enterprise performance. Sustainability, 11(3), p.709.
Iivonen, K., 2018. Defensive responses to strategic sustainability paradoxes: have your coke and
drink it too!. Journal of Business Ethics, 148(2), pp.309-327.
Kallmuenzer, A and et. al., 2018. Trade-offs between dimensions of sustainability: Exploratory
evidence from family firms in rural tourism regions. Journal of Sustainable
Tourism, 26(7), pp.1204-1221.
Khatter, A and et. al., 2019. Analysis of hotels’ environmentally sustainable policies and
practices: Sustainability and corporate social responsibility in hospitality and
tourism. International Journal of Contemporary Hospitality Management.
Montiel, I., Gallo, P.J. and Antolin-Lopez, R., 2020. What on Earth should managers learn about
corporate sustainability? A threshold concept approach. Journal of business
ethics, 162(4), pp.857-880.
Schuler, D and et. al., 2017. Guest editors’ introduction: Corporate sustainability management
and environmental ethics. Business Ethics Quarterly, 27(2), pp.213-237.
Schulte, J. and Hallstedt, S., 2017. Challenges for integrating sustainability in risk management-
current state of research. In 21st International Conference on Engineering Design,
ICED, Vancouver, Canada, 21 August 2017 through 25 August 2017 (No. DS87-2, pp.
327-336). The Design Society.
Turker, D. and Ozdemir, G., 2019. Modeling social sustainability: analysis of hospitality e-
distributors. Sustainability Accounting, Management and Policy Journal.
Zainuddin, M and et. al., 2020. The role of national culture in the relationship between
microfinance outreach and sustainability: a correlated random effects approach. Cross
Cultural & Strategic Management.
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