Strategic Management and Sustainability: Analysis of Competitive Environment of British Petroleum

This report provides an analysis of the competitive environment of British Petroleum Retails in the retail industry. It covers the strengths, weaknesses, opportunities, and threats of the company. Additionally, it discusses the industry rivalry, threat of substitutes, bargaining power of buyers and suppliers, and threat of new entrants. The report also includes a critical analysis of the industry and sector, along with a PESTLE analysis.

Strategic
Management and
Sustainability

Table of Contents
INTRODUCTION ..........................................................................................................................1
OVERVIEW OF THE CASE..........................................................................................................1
MAIN BODY...................................................................................................................................1
Critical Analysis of Industry as well as The Sector...............................................................2
Competitive Environment of British Petroleum.....................................................................5
CONCLUSION................................................................................................................................7
REFERENCES ...............................................................................................................................9

INTRODUCTION
Strategic management is continuous process of planning, analysing, monitoring and
assessing the requirements of an organisation to meet and achieve their goals and objectives.
Consistent changes in business and its environment will require companies to pervasively alter
their strategies for maintaining growth. Sustainable strategic management means making efforts
and leading ways in improving the social and environmental impacts of human activities. British
Petroleum Retails (BP) is among the growing retail companies in the world, established in the
year 1909 and headquartered at Westminster, London. This report covers an analysis of retail
industry as well as the sector. Moreover this report covers an analysis of competitive
environment of British Petroleum Retails in order to study its competitive status in the industry.
OVERVIEW OF THE CASE
It has been observed that in the year 2021 the petrol stations were halted after the
nationwide shortage of supplies for heavy goods vehicles (HVG). British Petroleum Retails
apologised for the current scenario of lacking in the supply of their products in their supply
shops in UK. They explained that some of their supply sites are temporary being closed due to
lack of supplies and user suppliers. It was found that this situations aroused after the meeting
between the government and executives from huge companies about the Britain's supply chain
crisis (O’Brien, Wellbrock and Kleer, 2020). Another statement added by Downing Street
claimed that there isn't the shortage of supplies. This put more political pressure regarding the
growing demand to take actions to ease shortage of supply chain and labour during pandemic
and Brexit. The companies are planning to create outsourcing and visa schemes to attract
workers on farms, industries and road haulage firms. But the situations are threatened by Rod
McKenzie of Road Haulage Association, that accused ministers by dramatic opposition
regrading the start of visa schemes to attract workforce.
MAIN BODY
The sustainability strategic management process helps an organisation to accumulate
stats of their prevailing scenarios, plan new strategies, formulate them, apply and analyse its
impacts on management strategies (Skok, 2020). Internal and external environment factors that
provides imperatives for a firm's strategic management approach to sustainability into its internal
and external management aspects.
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Critical Analysis of Industry as well as The Sector
BP Retail is a subsidiary of British Petroleum Ltd, an oil, gas and now also in retail
company indulged in supplying its products mainly in fuel and power across many nations
globally. It is among the major giants that are indulged in world's gas and oil operations and
supplying power across many countries in the world. The analysis of Industry/sector in which the
British Petroleum operates is given below.
SWOT ANALYSIS
It refers to the internal or interior analysis and review of an organisation's strengths,
weaknesses, threats from exterior environment and opportunities which influences the strategic
decisions in the company (Wei and Khachatryan, 2021). Strengths: The company has many strengths as the company operates oil business in
multiple places in the world. It has a string of various retail brands and subsidiaries that
are situated at the various places across the world. The company has many extensions
to it such as BP Connect, BP Express and Burma Control. In the economy of UK it
represents approximately about thirteen to fourteen percent of its exchange index. BP in
the UK is among major contributories in Lucrative sector, which is considered as the
barometer companies in its success or failure of the country's economy. British
Petroleum Retails has a strong customer loyalty and its products cover a larger market.
The company's different retail brands with the “Beyond Petroleum” slogan made the
image of company as energy company, not just an oil company. Even though the
company was affected by devastating effects of changing global situations the company
has been experiencing the rise in its revenue due to record increase in oil and gas prices
(Kolach and et. al., 2020). Weaknesses: British Petroleum Retail has a few weaknesses as well but these may be
a major factors affecting its worth in the market. The company has been in controversy
since very long times in related to collaborative oil pipelines constructions in volatile
areas that are prone to conflicts, environmental and political concerns. The company has
been portrayed as the criminals of environment and convicted to annihilation of
indigenous people's lives. The company also faced severe challenges in relation to
harms caused due to explosions in various pipelines and accidents in refineries causing
lives to threatened. Its consequences of oil spills and deep water horizon spills has
continuously deteriorated the company's retail image (Najib and et. al., 2021). Opportunities: There are many unexplored opportunities for BP are still hidden. The
company has moved and shifted its ways of producing energy and in their retails since
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many years. The company focuses towards production of products by sustainable ways
including less use of plastic natural gas, hydro power, wind power and may other ways.
Although many groups are also against these project sand demanding or better to say
creating opportunities to arise in producing environment friendly fuels (Lianingsih and at.
al., 2021). The company has come up with flexible price policies that will help it to
compete its rivals such as Reliance Digital, Reliance Retails, Downing Street, Shell and
Chevron, etc. Other opportunities are from the terms of expansion into frontier regions
where it could have future reserves and increase strategic crude acquisition in other
regions. Threats: BP Retails is under persistent threats from variety of factors that include
changing behaviour of people, political outbreaks and social changes. These challenges
may arise from variety of factors such as environmental consciousness, social changes
and political dilemmas, oil spills, explosions and accidents, wider spread destructions,
gas leakages and constant lawsuits. The company is also indulged in constant
competition that comes from competitors such as Reliance Stores and ASDA and
TESCO. The company is also facing the challenge from Rod McKenzie that is leading to
the tensions between the corporations and the government policies regarding the trade
activities.
STRENGTS
 Strong Operational Performance
 Technological Advancements
 Global Presence
WEAKNESSES
 Near miss and life causing
Accidents
 Oil Spills
 Environmental Degradation
OPPORTUNITIES
 Growth in new regions and
locations
 Increasing demand for fuels and
power
THREATS
 responsible for global emissions
 Concern for security and safety of
people
PESTLE ANALYSIS
PESTLE is a strong analytical tool that can be helpful for an organisation to study the
external or extrinsic factors that prevails in an industry or sector. It involves political, legal,
economic, environmental, social and technological factors that influences the operations in an
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industry/sector (Landmann, Stolz-Römmermann and Günther, 2020). This analytical tool is
essential to determine the changes in need to prepare for staying competitive in the market.
PESTLE analysis of the company is given below: Political: Political influence is a major determinant in the growth of lucrative business as
well as the progress of BP depends upon political decisions in its own areas. It include
anonymous factors such as tax laws, employment regulations, nearly life threatening
explosions, global emission, terrorism and other threats. These may lead to disoriented
business operations of the business (Nedumaran, 2020). In some areas the political
interests have influenced the operating activities of the business. Economic: These factors determine how the the BP operates and arrives at strategic
decisions in an particular economic situation. For example, the global market
degradation due to COVID has lead to decrease in company's profit margin. The cost of
capital was also fluctuating due to rise in interest rates and cost of importing exporting
energy products raised along the changes in economic conditions. Social: Changes in social behaviour and awareness has been seen in recent years
regarding their awareness in terms of environmental awareness. The demand for
increasing the allocation of employee pension funds has raised the cost of the company
as workers are likely to live longer (Kurmanalina and et. al., 2020). This means that the
challenges to tackle rapid environment changes will also rise along the coming years. Technological: The company has the challenges and opportunities of developing
sustainable, renewable and global energy outputs. The company has adopted us of
digital media and IT for monitoring and movement of products through its wide supply
chains. The company has a website that communicates easily with its customers with
various issues and its crucial information towards adoption of appropriate technology
and production of alternate energy sources. Legal: The legal factors such as related to severe cases and allegations on the
company regarding gulf of Mexico spills and accidental explosions that are life
threatening. In addition to this the company has violated certain norms and regulations
regarding its total commissions and not withstanding the pledge towards Net Zero 2050.
Along with this many countries has imposed minimum wages that are increased, health
and safety laws, strict employment regulations causing the rise in company's expenses
(Morrison, 2022). Environmental: The tremendous rise in the population of human beings on the planet
has aroused the needs for more supply of energy and fuel. So many environmental
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groups are continuously rising concerns of environmental degradation that the company
is causing. The company is oppressed with the aligation of violating major human rights
and shifting tribal people from their locations to extend its pipelines in indigenous areas.
POLITICAL
 Suspected to collaborate with UK
Government
 Gulf and EU States supply deals
LEGAL
 Gulf and Mexico oil spills
 Greenhouse gas policy and emission
standards
SOCIAL
 Social awareness and growing climate
concerns
 Contribution to values of society
ENVIRONMENTAL
 Crucial developments needs to lower
carbon emissions.
 Renewable energy operations
ECONOMIC
 Offshore investments needs to rise
 More utilisation of north sea areas
TECHNOLOGICAL
 Advancements in Seismic Imagination
Technology
 Geographical mapping
Competitive Environment of British Petroleum
Porter's five forces model is a very effective tool or framework for analysing a company's
completive environment. The number of competitive rivals, threat of substitution and new rivals
along with the bargaining power of suppliers and buyers. Porter's five forces of British Petroleum
is given Below:
FIVE FORCES COMPETITIVE ENVIRONMENT
Industry Rivalry
(High)
Major competitors of British Petroleum are Reliance Digital, Reliance
Stores, Downing Street, ASDA, TESCO, Gulf Cost, Petro China, OMP,
Texaco, Shell, and many more players in the retail industry. The
competitors in energy, retail and crude oil industry are many and all of
them has differentiated factors including the product differentiation,
fixed or variable costs and economies of scale to stay strong in the
competition. When it comes to creation of renewable resources and
build best possible ways to build environment friendly fuels the
competition is at hikes (Soeters, 2020).
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Threat of Substitutes
(Moderate)
The threat of substitute, means the presence of alternatives that may
lead to changes in the profitability of the company. Biofuels, solar
panels, hydro power and many other renewable energy sources are
substitute of this industry. So we can see that the threat from
substitutes is moderate in case of this company. The government
policies that opposes the use of the extracted crude oils and fossil
fuels which are also a vital determinant of company's working in retail
industry.
Threat of New
Entrants (Low)
There is a let threat of new entrants to bump up in this market because
there are high barriers to entry of any new comers in this industry.
Although the gains in this company are very high but almost all the
enterers are not capable to crack through the entry barriers and cover
such a huge market across the globe. The new entreats even if are
able to enter in this industry they do not match with the standards of
the big companies and are suffocated to death (Gernreich and Ahlfeld,
2020).
Bargaining Power of
Buyers (High)
In the Oil industry, the price of the oil depends upon the global
demand of the lucrative. The countries with high bargaining and
purchasing power are mostly the affluent ones that influences the
prices with their powers. The countries like USA, China or Japan the
buyers of BP Retails, can influence the prices of the retail products as
they have other suppliers in retail industry. They are able to switch
their sources easily as the availability of suppliers are many. The
buyers have the sense of immediately switching to another suppliers
when they falls their prices according to their own requirements.
Bargaining Power of
Suppliers (Low)
Suppliers of British Petroleum Retails involves the sources from the oil
extractors, that work on the field, managers and technicians. The
company like British Petroleum Retails has full control over its
suppliers as the suppliers has very few companies to sell their
products and they would not like to loose such a precious supplier.
The countries that possesses these oil fields and their supplies also
help to maintain a good relation with the country in which they are
supplying their products. The suppliers want to maintain excellent
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relations with UK as it is among the most powerful nations in the world.
Industry Life Cycle of British Petroleum
The industry life cycle of British Petroleum Retail (BP) is similar to other companies and
other industries, but it is different from the views of product life cycle as it produces the supply
side of the product's life cycle. The stages of industry life cycle includes emergence stage,
growth, maturity, stabilisation, declining growth and at the end the declination of the company.
The growth rate shows the changes that will take place in the industry. The production factor
determines the scenario related to product's growth through sales and promotion. The
introduction stage where the rise of curve is usually low as the product are introduced in the
market. The second stage is growth rate and here the company thrives to grow rapidly and
define its status in the market. The next stage is where the company goes to stabilisation where
it neither grows nor declines. The company is marked with the competitive aggression and here
only the companies at the same level shows competition over the company. The company
makes efforts to extend its branches all over and gain more area. The BP Retails is at this stage
where it is at trans and it does not fears any of its competitors, it already reached the position
where the competitors cannot reach and it is extending its arms. BP Retails is at the third stage,
Maturity of industry cycle where industry is stagnant and growth is increasing. The last stage is
decline or slow growth rate where the company moves towards the wind-up and its capacity and
capability declines and it cannot sustain its production.
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CONCLUSION
It has been conclude in the above report about the strategic management and
sustainability practices that helps an organisation to continuous plan, analyse, monitor and
assess the requirements of an organisation to meet and achieve their goals and objectives. The
report has been presenting an lucrative organisation that is dealing with the challenges from
exterior environment forces. The reports has presented an critical analysis of sector or industry
in which the company operates. With the help of strategic tools such as SWOT and PESTLE the
analysis of company's interior and exterior forces affecting its business are presented. The
report had also been covering an competitor analysis of British Petroleum Retails with the help
of Porter's Five Forces and industry life cycle.
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REFERENCES
Books and Journals
Gernreich, C.C. and Ahlfeld, C., 2020. Five Topics for Which Industry Needs Innovation
Managers: A Job Advertisement Analysis. In ISPIM Conference Proceedings (pp. 1-13).
The International Society for Professional Innovation Management (ISPIM).
Kolach, S. and et. al., 2020. Influence of marketing instruments on the formation and use of
marketing potential of agricultural enterprises. Scientific Papers Series-Management,
Economic Engineering in Agriculture and Rural Development, 20(3). pp.663-669.
Kurmanalina, A. and et. al., 2020. A swot analysis of factors influencing the development of
agriculture sector and agribusiness entrepreneurship. Academy of Entrepreneurship
Journal, 26(1). pp.1-8.
Landmann, E., Stolz-Römmermann, J. and Günther, T., 2020. Customer Integration Through
Virtual Reality Implementation: A SWOT Analysis in the Area of Production. Augmented
Reality and Virtual Reality: Changing Realities in a Dynamic World. p.253.
Lianingsih, D. S. and at. al., 2021. Analisis SWOT Strategi Pemasaran Produk BMT ItQan
dalam Meningkatkan Keunggulan Kompetitif. Prosiding Hukum Ekonomi Syariah.
pp.518-520.
Morrison, A.M., 2022. Marketing. In Encyclopedia of Tourism Management and Marketing.
Edward Elgar Publishing.
Najib, M. and et. al., 2021. Application of SWOT-AHP to develop organic food marketing
strategy. Academy of Strategic Management Journal, 20(1). pp.1-8.
Nedumaran, D.G., 2020. Consumer Perception and SWOT Analysis of Organic Food Products.
O’Brien, D., Wellbrock, C. M. and Kleer, N., 2020. Content for free? Drivers of past payment,
paying intent and willingness to pay for digital journalism–a systematic literature
review. Digital Journalism, 8(5). pp.643-672.
Skok, N., 2020. INTERNACIONALIZACIJA PODJETJA KOZMETIKA AFRODITA doo NA TRG
NEMČIJE (Doctoral dissertation, Univerza v Mariboru, Ekonomsko-poslovna fakulteta).
Soeters, J., 2020. Management and military studies: Classical and current foundations.
Routledge.
Wei, X. and Khachatryan, H., 2021. Analyzing growers’ pest management decisions in the US
ornamental horticulture industry. Journal of Cleaner Production. p.127788.
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