Analysis of British Petroleum: Strategic Management and Sustainability

This report provides a detailed analysis of British Petroleum, including a PESTLE analysis, SWOT analysis, and Porter's five forces analysis. It discusses the impact of political, economic, social, technological, legal, and environmental factors on the company's performance and sustainability. The report also highlights the strengths, weaknesses, opportunities, and threats faced by the company.

Strategic Management
and Sustainability

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
PESTLE Analysis of British Petroleum :-..................................................................................3
Swot Analysis On British Petroleum :-.......................................................................................6
Porter's five forces on British petroleum :-.................................................................................7
CONCLUSION ...............................................................................................................................9
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic management is basically the process of understanding the different strategies
which are made and executed by the managers of the company. The main aim behind this
strategic management is to effectively increased the overall productivity of the business
(Beusch and et. al., 2021) (Bilan and et. al., 2020). This not only help the firm in enjoying the
competitive advantages over their rivals but also help in improving their sustainability in the
market. In strategic management proper analyses of all the strategies and decisions have been
done which increases the efficiency of the firm in the market. Without proper strategic
management team the organisation is not able to maintain their resource and goals in a very
effective manner. After the arisen of Covid 19, the performance of all the industries has been
affected. This report is based on British Petroleum which is a well known British oil and
petroleum company all over the globe. This is public limited company who specialise in
extraction, refining and distribution of oil and gas within the market. The respective company
was founded in 14 April 1909 and the headquarters of the company is situated in London,
England, United Kingdom. The following report is going to cover the internal and external
environmental analysis in respective to the British Petroleum by using proper frame work such as
SWOT and PESTEL analysis. In addition to this Porter's five forces model has been done in
relation to the chosen company for determining the competitive environment.
TASK
PESTLE Analysis of British Petroleum :-
Meaning :-
Pestle analysis may be defined as a framework or tool which are used by the organisation
in order to gain macro picture of the industries (Fedushko and et. al., 2021). With the help of this
analysis the organisation is able to measure the impact of the different external factor which
directly affect the different functions of the business. The impact of these factor on the
performance of business may be negative or positive. The PESTLE analysis in respect to the
British Petroleum has been discussed below :-

 Political Factor :- this factor has huge impact of the performance of the business. In this
factor the political stability of the nation government, restrictions and laws of the
government, export and import policies, tax regulation and many more has been
comprises (Gachuhi and Awuor, 2019). These factors can effect the performance of the
business in both positive and negative way. In context to the British Petroleum, as they
conduct their operations in several nation so it is very important for them to understand
the political atmosphere in a very effective manner. The management of the respective
company have to make proper strategies and policies by keeping in mind the political
environment of the country. With the help of these strategies they are able to operate all
the functions of the business in a very smooth manner. The implementation of the new
laws in relation to taxes would increases or decreases the function of the respective firm.
 Economical Factor :- this factor also affect the different functions or operation of the
firm in a very immense manner. Interest rate, wage rate, currency rate, inflation rate,
working hour, GDP of the nation, per capital income, spending of the consumer and
many more has been included in this factor. After the arisen of Covid 19, the economic
conditions of all the countries has been affected in a very immense manner. Increase in
the rate of unemployment and income of the consumers has been seen. In relation to the
British Petroleum, the management of the company have to focus and concentrate on
minimising all the risk which is related to environment. Due to this they are able to grow
or expand their business in a very effective manner (Jabłoński and Jabłoński, 2020). The
management of the company is going to concentrate on managing the intake of water,
energy and many more.
 Social Factor :- this factor of PESTLE analysis help the organisation in making the
strategies and policies of promoting the product in the market. Attitude, beliefs, values,
health and safety of the employee's and society members, population of the nation,
preferences and buying behaviour of the consumer and many more are comprises in this
factor. With the help of this factor the marketer of the company is able to focus on target
market in a very effective manner. In context to the British Petroleum, if there is rise in
the prices of the oil and gas then the techniques of the marketing department which are
made by them in order to promote their product in the market has been affected. In
addition to this change in the climate also impact the different operation of the business.

 Technological Factor :- as the technology changes everyday, due to up gradation of
technology the competition in the market has been increases. Innovation, research and
development of technology, automation within the company and many more comprises in
this factor. As the technological factor came with lots of opportunities, so this directly
affect the performance of the company. Different types of strategic frame work has been
used by the company in order to adopt the technology with in the different operations of
the company in a very effective manner(Johnsen, Howard and Miemczyk, 2018). Not
adopting the technology according to the right time will lead the firm to loss their
sustainability in the competitive market. In context to the British Petroleum, the
management of the company have to use innovative and automated technology in their
business functions. Instead of using tradition way of promoting methods in the market
they can use social media platform to promote their product. With the help of these
technologies they can effectively and easily connect with their consumer with low cost.
Major amount has been invested by the company to better the sub sea technology. Due to
this they effectively produce the oil and gas.
 Legal Factor :- this factor is being considered as one of the most important factor of this
analysis. In this factor laws or rules related to the safety and health of the employees as
well as members of the society, norms relates to the workers and consumers protections
and many more has been included. It is very important for the management of the
company to obey or follow all the rules and regulations which are made by the council of
the nation. By doing this they are able to operate their business activities in a very
effectual and efficient manner. In relation to the British Petroleum, the management of
the company have to focus on safety of their consumer as well as their worker. In
addition to this, it is very important for the management of the company to initiate
towards the various corporate social responsibilities because this help them to improve
their sustainability in the competitive market(Kitsios, Kamariotou, and Talias, 2020).
 Environmental Factor :- all the factor which harm the the environment are included in
this factor. Environment protection law, disposal law, energy consumption law,
environment protection law and many more has been comprises in this factor. It is very
important for all the organisation to follow all the rules which are made by the

government in regarding protecting the environment. In context to the British Petroleum,
it is very important for the management of the company to operate their different business
functions with low carbon emission. They have to focus on the various policies in
regarding to the use of fuel and managing the waste. By following all these law the
management of the company are able to enjoy the long term sustainability as well
competitive advantage in the market. In addition to this, management have to utilise some
strategies in order to reduce the effect of green house gases on the environment.
Swot Analysis On British Petroleum :-
Meaning :-
SWOT analysis may be defined as a tool which not help the organisation in making
different strategies for the business but also help in identifying all the areas in which the
company is lacking(Lambrechts and et. al., 2019) . Along with this, with the help of this analysis
the organisation is able to minimize their risk and maintain strong position in the market. In
context to the British Petroleum, the detailed overview of the SWOT analysis has been discussed
below:-
Strengths :- In this element the strong areas of the business which have been maintained by
them in the competitive market has been identified. This help them to enjoy competitive
advantage over their rivals.
 Diverse portfolio :- Different types of brands is being consisted in the British Petroleum
and they deals in various kinds of goods and services. With the help of this they are able
to generate revenues from various kind of consumer in a very effective manner.
 Good customer relationship :- according to the research it has been seen that the
management of the company is able to fulfil the need of the consumer in a very effective
manner due to which they are able to develop good relationship with their customers. As
the customers of the company are loyal towards their brand this avoid the brand
switching. The respective company is well known in the market for their customer
loyalty.
Weakness :- in this element the weak areas of the business which need to be rectified has been
defined. By doing this they are able to develop a good presence in the market.
 Scarcity of natural resources :- the business of the British Petroleum is totally depend
on the energy related domain. As the availability of the natural resources has been

declined all over the globe due to which government limit the supply of these resources.
This directly affect the long run of the company in the market.
 Dishonest management :- due to the bad behaviours of company executive and
employee's toward the society member different types of issues and complexities has
been faced by the company. In some cases the management of the British Petroleum
have to paid the fines and penalties which ultimately damage the brand image of the
company.
Opportunities :- in this element different types of opportunities has been identified which are
present in front of the company. By grabbing this opportunities they can achieve potential
growth in the market.
 Alternative fuels and energy :- as the population has been increases day by day and the
resources and the resources are available in limited number, the management of the
British Petroleum can focus on the different types of energy such as solar and wind. As
company have the potential to grab these opportunities in order to expand their business.
 Geographic growth :- as the respective company are able to generate lots of revenues,
they can expand their business by investing in new geographical areas. By doing this the
management of the company are able to build good image and strong presence in the
market(Sroufe and Gopalakrishna-Remani, 2019).
Threats :- in this factor those factor has been determined which negatively affect the different
functions of business organisation. By identifying all the threat the chances of uncertainties face
by the company has been reduces.
 Environmental issues :- even if the company use the most suitable and efficient
methods, the British Petroleum consistently harm the environment. This is being
considered as one of the biggest threat which are faced by the company as this threat
harm their corporate social responsibility in the market.
 Competition :- in this industry immense competition has been seen. High competition
has been seen in the energy and fuel sector. By using different techniques, the threat of
new entrant has been established due to which change in the demand of fuel and gas has
been seen. The biggest rivals of the British Petroleum are Shell and Chevron.

Porter's five forces on British petroleum :-
Meaning :- the Porter's five forces model is basically a framework which are used by the
organisation in order to make the strategies by analysing competitive environment within the
industry. These five forces of Porter's effectively analyse tGachuhi, L. and Awuor, E., 2019.
Strategic Management Practices and Sustainability of SMEs Agribusiness in Kenya: A Survey of
Githunguri Sub County. Journal of Agriculture, 3(1), pp.21-42.he external environment in which
three forces analyse the horizontal type of competition and two of them analyse the vertical type
of competition. In relation to the British petroleum, this model help in identified their position in
front of their competitor in the competitive market. Porter's five model in context to the British
Petroleum has been discussed below :-
 Competition in the industry :- in any industry competition is being considered as one
of the biggest determinant. This element give information to the company, about the
choice of their consumer and competition available in the market which affect the
presence of the company in the market. In the flue and gas industries many large scale
industries has been consisted and grab the huge market share on continuous basis which
ultimately increases the competition (Thorén andVendel, 2018). So HIGH competition
has been seen faced by the British Petroleum. To avoid the competition they can merge
with the other companies so that they can give competition to their biggest rivals like
Shell, Total and Petro China etc.
 Threat of substitute product :- this factor is related to the substitute products which
are available in the market. If these products are available at cheaper rate and provide
same level of satisfaction then these product has been adopted by the consumer. As the
chosen company came under the oil industry and the substitute product which are
available in the market is bio fuel or some other renewable resources. Due to the
changes in the social preferences and government policies the High threat of substitute
product has been faced by the respective company.
 Bargaining power of suppliers :- this element tells about the power of the supplier
which are posses by the company in respect to change in the amount of shipping product
and increase in the prices of raw material. In context the British Petroleum the less
amount of threat in respect to the supplier has been faced by the company. As the image

of the company in the market is very goods and the company buy the goods in high
quantity. So the supplier don't want to lose such reputed firm.
 Bargaining power of buyers :- in this factor the bargaining power of the consumer has
been considered. The prices of the product in which the respective company deals is
totally depend on the global demand. So as the consumer have many choices in the
market, so they can easily switch to the other brand. Moderate threat in respect to
buyer has been faced by the company (Yáñez and et. al., 2019).
 Threat of new entrants :- the entry of the new firm in the same industry has been
considered in this factor. As in respect to the oil industry huge amount of investment is
required and along with this the British Petroleum has develop a well settled image in
the market. So low rate of threat in respect to new entrant has been faced by the
company.
CONCLUSION
From the above report it has been concluded that it is very important for the management
of the company to follow the proper strategies in order to grow in the market. Along with this it
is is very important for them to analyse the both external as well as internal factor by using
proper frame work. SWOT and PESTLE analysis has been concluded in this report in respect to
British Petroleum to under stand the macro and micro environment of the company. This report
also concluded the Porter' s five forces model in respect to the chosen company in order to
analyse the competitive environment.

REFERENCES
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