Strategic Analysis of British Petroleum: Ansoff Matrix, VRIO Framework, and Environmental Sustainability Science

This report provides a strategic analysis of British Petroleum, including Ansoff Matrix, VRIO Framework, and Environmental Sustainability Science. It covers the company's resources and capabilities, growth strategies, and sustainability initiatives.

Strategic
analysis of the
British
Petroleum

TABLE OF CONTENT
Introduction......................................................................................................................................4
Main body........................................................................................................................................4
Ansoff matrix for British petroleum to discuss the strategy pursued by them........................4
VRIO framework for British Petroleum..................................................................................6
Environmental sustainability science, theories and competitive strategies of British
Petroleum.................................................................................................................................8
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

Introduction
Strategic analysis refers to a process through which an analysis of the environment of
organisation is done. It is an essential process which is needed to be taken into consideration by
the company as it will help the company in formulating business strategies and will also help
them in quick decision making. Strategies are important aspect of workings of organisation and
if the company wants a smooth functioning of its operation then it is important for the company
to make future planning through efficient strategies (A Complete Strategic Business Analysis of
British Petroleum (BP), 2017). In context to British petroleum, it is the world 6th leading oil and
gas company founded in the year 1909 by Charles Greenway and William Knox D’Arcy. The
company is currently headquartered in London, UK. The company is having presence in nearly
80 countries. In this report, the Ansoff analysis of the company is provided along with its
resources and capabilities analysis. The report will also cover environmental sustainability
science and competitive analysis of the company.
Main body
Ansoff matrix for British petroleum to discuss the strategy pursued by them.
The anaoff matrix is also known as product and market expansion Grid. It is a tool used by the
companies in order to analyse its plan for the futures as well as the growth strategies that the
company is having. In context to British Petroleum, the Ansoff Matrix is provided below:
 Market penetration: It refers to the the strategy where the company try to capture the
existing market with the help of existing product. It can be done by the companies through
aggressive marketing as well as by providing effective discounts or gift cards to the
customers in order to attract them and to attract other potential customers of the company. It
is the least risky option that the company have. In context to British Petroleum, the company
is trying to capture the market with the help of introduction of schemes of loyalty. The
company is trying to take competitors advantage in the market with the help of their
aggressive marketing and promotional campaigns.
 Market development: It refers to the strategy where the company entered a new market wit
their existing products. It is a medium risky strategy for the company as the markets are new
and the company may not be accurately determine the taste and preferences of the customers
of new market. It can make the expansion process of the company a failure (Ansoff Matrix

Analysis of British Petroleum (BP), 2021). If the company opts for this strategy then the
company must explore geographical markets which can help the company in having gains in
the market. The company may also opt for establishment of new channels of distribution
which can help the company in becoming more efficient. The company can also adopt for
new pricing policies for new market.
 Product development: It refers to the strategy through which the company try to develop a
new product and launch it in the already existing market in which the company is having
presence. It will help the company in capturing a larger market share which can increase and
can help the company in having growth. It is a comparatively less risky option that the
company have. If the company opt for this strategy they must look into developing new
competencies coupled with different modifications in the products according to the taste and
preferences of the new market. The company must also include human resource and
advancement of technology in to consideration as it will help them in providing products
according to the existing market.
 Diversification: It refers to the most risky option that the company have. In this strategy the
company enters a completely new market with a completely new product. It may be a
difficult task for the company as the products as well as the markets are new for the
company. If the company opt for this strategy the company may face challenges as they are
having a lack of experiences of diversification strategy. The company requires to come up
with several different ideas through which they can cater an innovative product in the new
market keeping the taste and preferences of that market and customers base into mind. The
company may opt for joint venture which will help them in having effective entry in the new
market.
The company may opt for diversification as a growth strategy and joint venture with companies
dealing with production and marketing of oils as well as Bio Fuels with the aim to improve the
production capacity to get access into non traditional markets which are dealing in energy. The
alternative that the company may opt for is to initiate individual business strategy with renewable
energy. It can help the company in capturing newer market and will also help them in providing
new products of the company.

VRIO framework for British Petroleum
VRIO framework refers to a strategic management tool which helps the company in
analyzing the internal strengths and resources of the company. It will help the company in
analyzing what are the resources and capabilities of the company which can help them in having
competitors advantage in the market. It includes resources of the company which are valuable,
rare, cannot be imitated and are organized to capture the value for the company (VRIO Analysis
of British Petroleum PLC and John Browne A Culture of Risk Beyond Petroleum A, 2018). In
context to British Petroleum, the company has several resources and capabilities which helps
them in having sustainable competitive advantage in the market and can also help them in
increasing their performance as well as productivity. If the resources of the company are
according to the standards then they will definitely help the company in creating a major
advantage in the market. The framework for British Petroleum is provided below:
Resources Valuable Rare Imitable Organized Competitors
advantage
Expansion
opportunities
Yes in case of
emerging
markets.
No as
competitors
are also
having a keen
interest in
those niche
markets
Yes it can be
easily
imitated by
competitors
It will require
higher
budgets for
marketing
purpose.
Will provide
temporary
competitive
advantage.
Channel
managements
as well as
sales force
management
Yes, as it is
providing
benefits to the
company.
No as as it
can be
achieved with
the help of
proper
planning.
Can be
imitated by
the
competitors
Still need to
be utilized up
to proper
potential.
Potential is
there and can
provide
sustainable
competitive
advantage.
Financial
resources
One of the
most
important
resource for
No as it can
be achieved
by
competitors
No but can be
achieved as
market
liquidity and
The company
is having a
sustainable
financial
It can provide
temporary
competitive
advantage to

the company
so yes.
as well with
the help of
investments.
financial
instruments
are available
to nearest
competitors
as well.
position in the
market.
the company.
Intellectual
property
rights,
trademarks
and
copyrights.
Extremely
valuable for
the company
specially in
the highly
competitive
market.
Yes, it is an
extremely
rare resource
for the
company
which cannot
be copied by
the
competitors.
No, Only the
company has
the right to
use it. If
someone
imitate the
resource then
the company
can take legal
actions
against them.
The company
has not
utilized this
resource to its
fuller
potential and
has also not
taken actual
benefit of it.
Provide
strong
competitors
advantage to
the company.
It capabilities
and growth in
e commerce
segment.
Yes as it is a
growing
industry and
the firm can
leverage the
opportunities.
No,
competitors
are also
investing in
similar
technologies
as well as e
commerce
segments.
The in house
AI can be
difficult to
imitate for the
competitors.
It is just the
starting stage
for company.
Sustainable
competitive
advantage in
long run.
Brand
awareness
Yes, the
company is
present in 80
countries
which is a
Yes as the
competitors
require much
more time to
create that
No cannot be
imitated by
the
competitors .
Yes highly
organized for
the company.
Provide a
strong
competitors
advantage to
the company.

massive
presence.
level of brand
awareness.
Product
portfolio and
product lines
Yes as the
company is
having high
product lines
and portfolio.
No as the
competitors
of the
company are
also coping
effectively
with the
company.
Yes can be
imitated by
the
competitors
of the
company.
Yes
efficiently.
Can provide
short term
competitors
advantage to
the company
but not for
long run.
Some of the other resources and capabilities which are providing high benefits to the
company in the market is the innovation and talent management capabilities of the company. It is
important for the company to make sure that they are working according to the goals and
objectives and are utilizing these resources to its fuller capacity in order to have competitors
advantage in the market. It will help the company in not only surviving in the market but will
also increase the growth potential of the company in the market.
Environmental sustainability science, theories and competitive strategies of British Petroleum
Environmental sustainability science of British Petroleum:
The oil and gas sector have achieve significant growth in the recent years which makes it
important for the sector to make some severe changes in their working and contribute towards
sustainability a little more. In the year 2050, the British Petroleum has announced its net zero
ambition for the purpose of becoming more sustainable and wit the aim of “re-imagining the
energy for people and planet”. the CEO of the company states that they are having an aim of
becoming net zero by the end of 2050 and will help the environment and the world to become
better. The 10 aims of the company is to be more strategic and holistic approach towards
sustainability (bp introduces new sustainability aims, 2021). Some of the aims of the company
are integration of energy, environment, human rights, social and economic responsibility as well
as climate.
Because of the strong beliefs of the company and an urge to do better for the society
helps the company in becoming more and more sustainable as well as responsible towards the

environment. The first five aims of the company is to care for the planet and the other five aims
of the company is to improve the lives of people. The company is collaborating with internal
expert as well as external specialists in order to develop strategies through which they can
become more sustainable and can also fulfil their aims and objectives towards the planet and
environment. The net emission of the company in the year 2020 is decreased by in total of 16%.
the sustainability report of the company states that part driven by disinvestment and the own
emission reduction of the company along wit the reduction of emission in the project of Angola
and US. The reduction of emission in the production process of the company is estimated to be
9%.
The company can gain competitive advantage by following theories of scientific
sustainability as it will help the firm create a sustainable brand perception in the oil and gas
industry. This type of image will help the firm face the negative responses of consumers and
governments regarding the lack of sustainability at the company. In addition to this, it will also
assist the company in recovering from past controversies regarding lack of sustainability and
environmental damaging actions. The past controversy of the company, the deep-water horizon
oil spill lead to harsh criticism being directed at the company for harming marine life and
ecosystem. This oil spill occurred because of careless transportation of oil through ocean. The
deep-water horizon oil spill occurred on June 4 2010 when an explosion at the deep-water
horizon oil rig which was owned and controlled by British petroleum lead to release of 130
million gallons of crude oil into the gulf of Mexico (Ten years later, BP oil spill continues to
harm wildlife—especially dolphins, 2020). This oil spill is considered the largest oil spill and one
of the worst environmental tragedies over the world.
Since this event the company has adopted theories and approaches of scientific
sustainability, to enhance overall environment friendly nature of the company. Despite this active
effort to enhance sustainability, because of involvement in one of the most recent and biggest
environmental disasters, British petroleum is still considered an environment harming company.
The company has been criticised for long-term damage caused by the oil spill on marine life.
Research on marine ecosystem in the gulf of Mexico has highlighted that many marine specifies
are struggling to recover from the negative impact of the oil spill on the ecosystem and health of
various marine animals. Some of the species who are facing existential crises as their population

have decreased because of the deep-water horizon oil spill include deep-sea coral, common
loons, and spotted sea trout.
It is essential for British Petroleum to implement scientific sustainability as it will help
the company develop brand image which is not related to the negative connotations of the deep-
water horizon oil spill but an environmental friendly company working to create a better world.
In this way the company will gain competitive advantage through the scientific sustainability
efforts as it will help the firm show consumers credible results in improvement of the
environment backed by science and logic. An example of the positive impact of scientific
sustainability on British petroleum has been the usage of digital technology to build more
sustainable supply chain. The company has collaborated with the environmental defence fund in
order to build advanced technology and enforce policy and process change to reduce methane
emissions in supply chain (Here's How BP Is Using Digital Technology to Create a More
Environmentally-Friendly Supply Chain, 2021). This is scientific sustainability initiative and will
project the firm as environmentally responsible company. In addition to this it will also help the
firm improve supply chain energy usage providing the firm competitive advantage.

Conclusion
From the above report it is concluded that strategies can help the company in making
effective plans for future and will also make sure that the company is going into correct
direction. It is important for the company to explore the options through which they can enhance
their reach to their potential customers and can also enhance their market share. It will be
beneficial for the company to analyse their resources which can help them in capturing the
market and can also help them in gaining competitors advantage in the market. The above report
will provide an analysis of the markets as well as the existing products of the company which
can help them in further growth ad expansion. The strategy which can be best suitable for the
company will also be given. Along with that an environmental analysis as well as competitive
analysis of the company is provided as well.

References
Online
A Complete Strategic Business Analysis of British Petroleum (BP), 2017 [online]. available
through <https://www.grin.com/document/381395>
Ansoff Matrix Analysis of British Petroleum (BP), 2021 [online]. available through
<https://www.mbaknol.com/business-analysis/ansoff-matrix-analysis-of-british-
petroleum-bp/>
bp introduces new sustainability aims, 2021 [online]. available through
<https://www.wbcsd.org/Overview/News-Insights/Member-spotlight/bp-introduces-
new-sustainability-aims>
Here's How BP Is Using Digital Technology to Create a More Environmentally-Friendly Supply
Chain, 2021. [online]. available through
<https://supplychainnext.wbresearch.com/blog/bp-digital-technology-environmentally-
friendly-supply-chain >
Ten years later, BP oil spill continues to harm wildlife—especially dolphins, 2020. [online].
available through <https://www.nationalgeographic.com/animals/article/how-is-wildlife-
doing-now--ten-years-after-the-deepwater-horizon >
VRIO Analysis of British Petroleum PLC and John Browne A Culture of Risk Beyond
Petroleum A, 2018 [online]. available through
<https://www.case48.com/vrio-case/6722-British-Petroleum-PLC-and-John-Browne-A-
Culture-of-Risk-Beyond-Petroleum-A>