Strategic Analysis of British Petroleum: Evaluation of Global Haulage Industry and Competitive Environment

This report provides a strategic analysis of British Petroleum, including evaluation of the global haulage industry and competitive environment. The report includes PESTLE and SWOT analysis, industry life cycle, and evaluation of the value chain model identified by Porter.

Analysis of British Petroleum

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Evaluation of Global Haulage Industry with the help of related frameworks in order to have
critical analysis of industry.........................................................................................................1
Evaluation of competitive environment of British Petroleum....................................................6
CONCLUSION................................................................................................................................8
References:.......................................................................................................................................9

INTRODUCTION
The strategic analysis is an procedure of conducting research of an business environment
by an organisation which tends to facilitate strategic planning in order to have smooth decision
making operations for an organisation. The business sustainability is also called as corporate
sustainability which is related to management coordination with various environmental factors
for the success enhancement. The report is based on essay of strategic analysis of British
petroleum which is an Haulage industry of the UK (Blumberg, T and et.al., 2019). It is a
Multinational oil and gas company headquartered in London, England. This company was
established by William Knox D'Arcy Charles Greenway in 1909. several issues were faced by
the organisation in framework of supply at various retail sites and therefore few sites were closed
temporarily. The cause of behind the shutdown was unavailability of unleaded and diesel grades.
Several strategic analysis has been done in order to study impact of several external factors in the
context of organisation. The essay would focus on several strategic analysis approaches such as
PESTEL analysis, SWOT analysis Industry life cycle along with value chain analysis model that
has been developed by porter.
MAIN BODY
Evaluation of Global Haulage Industry with the help of related frameworks in order to
have critical analysis of industry.
PESTLE and SWOT analysis
The PESTLE analysis of global haulage industry in framework of British petroleum is
been performed. This also further highlights the threats and opportunities for various external
factors that is impacting over the organisation within the industry.
FACTORS OPPORTUNITIES THREAT
POLITICAL  The political opportunity
British Petroleum has seized
lately is its expansion into
post-Soviet territories for its
future reserves. It has also
 Political instability poses a
major threat to British
Petroleum's business.
Because of Brexit, there is a
great deal of instability in the
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made its presence in the North
Sea region through the growth
of its major oil and gas
acquisitions (Dong, K and
et.al., 2019).
 To its advantage, Britain has
begun to pay lobby fees so that
they can look after their
political interests in the
country. It has also started
funding government political
campaigns to get the political
benefits.
free movement of workers
and the supply chain
involved.
 A disruption in global oil
prices can occur at any time
if there is tension between
Iran and the US. This can
lead to a decrease in the
supply of oil and the demand
for the oil will increase,
which will lead to an
increase in oil prices.
ECONOMIC  Another opportunity British
Petroleum offers is that it has
developed a flexible pricing
policy system and that system
is not followed by its
competitors.
 The opportunity that British
Petroleum has seized is to be
listed on the London Stock
Exchange, which has helped
develop customer loyalty to it
in the oil sector.
 The collaboration is an
opportunity to meet the
demand and supply for British
Petroleum products in the UK.
The supply chain is getting
more options outside of the
 British Petroleum's danger is
that profit margins have
decreased due to the
recession, which led to its
overall growth and
expansion strategy.
 When inflation is high, it
demands higher wages from
workers and leads to higher
operating costs (Righi, S.,
2019).
 The loss of sales was felt in
both the supply chain and the
oil industry. This is because
of increase in wages for
workers in this sector.
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UK.
 The quality of the
infrastructure can be
developed to improve
production in the oil sector,
and the infrastructure of the
supply chain can also be
improved (Mojammal, A.H.M
and et.al., 2019).
SOCIAL  This is an opportunity for BP
as the population is growing
tremendously. Hence, the
demand for its oil products
will also increase in the near
future.
 Because in the oil sector, the
majority of workforce is
ageing towards retirement.
British Petroleum can
therefore take advantage of the
ability to recruit and train
young workers for making
them prepared for future
operations.
 With the ageing of the UK
population, there has also
been an increase in demand
for pension funds as they are
eligible for employees who
have worked at BP.
 The threat to BP is that more
people have become green,
so the demand for green
products has increased.
Hence, they need to change
the nature of their products
to address this threat (Shao,
S and et.al., 2019).
TECHNOLOGI
CAL
 In the technological
environment, BP has many
ways in which it can create
current and global energy-
innovative goods. They can
also research the technology
 The threat posed by the
technology is that hackers
can hack BP's technology
and leak vital information,
which can result in losses for
BP's relationship with British
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necessary to enable them to be
used in the manufacture of
alternative energy sources.
 The company has implemented
a secure information
technology system to monitor
the flow of oil and control its
movement. The company uses
technology to communicate
with its customers through its
website. The company can use
this opportunity to contact all
of its stakeholders via this
website (Poole, R., 2018).
 Another thing they can do is
be the first to try out new
technologies because if they
work they will have the
pioneering advantage along
with the benefit of supply
chain.
Petroleum.
ENVIRONMNE
TAL
 British Petroleum can take the
opportunity to become a
sustainable energy company
instead of just being an oil-
based company. They should
also focus on providing
products that will not harm the
environment and that can be
protected from global
disasters.
 As consumers become aware
of the environment, many
environmental groups are
raising concerns about the
environmental degradation
the company is causing. So it
is an environmental threat to
the company as it could
affect the overall company
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performance.
 Also, because the company
did not participate in efforts
to protect the environment, it
was recently recognized as a
Green Wash Award. This
award was given to the
company for not caring about
climate change. This is a
threat to the company as the
stakeholders want to partner
with the companies who are
now making efforts to
protect the environment.
LEGAL  The legal environment is
beneficial for British
Petroleum as they know what
to invest in and what rights the
customer has. For this purpose,
OGA (oil & gas authority) was
created by the British
government, which pays
attention to different things.
Those things are oil and gas
licenses, oil and gas fields and
wells, oil and gas
infrastructure, oil and gas
fields and wells, and licenses
for carbon storage product is
an extract, the loss can be
shared by both companies and
 As the UK government cares
about the health and safety of
the people who work in the
oil sector. So they passed the
Health and Safety Policy Act
to protect workers' rights in
this industry. Another law
that has been passed by the
UK Government is the Age
and disability Discrimination
Act. So now they have to
employ workers of all ages,
including those with
disabilities (Abubakar, I.R.
and Dano, U.L., 2019).
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the supply chain.
SWOT analysis
 Strength- The British petroleum has strength of diversified interests in number of areas
such as lubricants, energy, fuel etc. It is a high brand of having loyal customers that
meets energy needs. It also maintains strong ties with customers.
 Weakness- The Weakness is British petroleum has inability to penetrate successfully in
non-energy due to having diverse interests in related areas. The British petroleum face
number of scandals from dishonest transaction from employees and handled
controversies regarding to spillage disastrously which damages the company ((Azubuike,
S.I and et.al., 2018)).
 Opportunities- The British petroleum has prominent presence in energy sector and
company can take alternate energy options like wind energy. The global focus on
sustainability creates lot of opportunities in alternate energy options. It can also engage in
developing economies for creating solutions in infrastructure challenges for making use
of alternative energy options. Threats- The main competitors for British petroleum are shell & chevron.
Industry Life cycle
It is similar to as of other several industries. This life cycle consists of four phases which
is used for determining the industry extent for producing several ranges of products. The phases
consist of introduction stage, growth stage, maturity stage and decline stage. The life cycle of the
industry is determined with several factors which are demand growth and production. The
changes that is needed in industry is determined by industry growth rate. It is essentially the
factor of production that determines whether the organization's products are likely to enhance the
organization's life cycle through various sales and advertising techniques.
The first phase is introduction stage of industry life cycle process of British Petroleum
where the product sales along with market penetration rate tends to be low because the product is
introduced recently in market.
The second phase is growth stage where organisation launches full marketing scale
activities along with promotional activities for having advantage of emerging industry as well as
market. In the growth stage the value of industry tends to increase as customers notice various
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products and services of British petroleum. The industry experience during this stage n upward
growth as sales is continuously increases during such phase (Khalaf Al-Enizi and et.al., 2020).
In the industry life cycle the maturity stage is third phase for British Petroleum. This
phase tends to have flat growth curve which states that growth of organisation is becoming
stagnant. This phase says that the growth in the particular place has decreased. The maturity
phase usually consists of several aggressive competitors that tend to include aggressive
competition from the new entrants within the organization. It is very important that the
marketing efforts are very strong during the phase so that the organization can offer a unique
product or differentiated service to its customers. In the maturity phase there are relatively fewer
firms in the market and the weak firms are eliminated from the market while the dominant firms
continue to become more dominant in the market.
The last phase of the industry life cycle is declining stage which is considered inevitable
in any type of industry where the organization does not maintain profit levels until the sale of the
product becomes obsolete. The decline phase is marked by the downward curve as the industry
tends to detach itself from competitors who did not leave the industry in the decline phase
(Paramasivam, B and et.al., 2018).
Evaluation of competitive environment of British Petroleum.
The assessment of British Petroleum's competitive landscape was carried out using the
value chain model identified by Porter. The value chain model comprises the analysis of the
activities that lead to an increase in the production and manufacturing process of oil as well as
the oil-based products of the organization and at the same time create added value for the
organization. Several activities are carried out by British Petroleum that tend to add value to the
organization, including both primary and support activities. The main activities are basically the
core activities that the organization likes to pursue. The main activities of British Petroleum
include the exploration of oil as well as the production, the further the extraction of the natural
gas as well as the crude oil from the various oil fields in the neighbouring areas.
Inbound logistics usually includes the process of shipping the crude oil via multiple
transport routes such as pipelines and transit lines. There are also various modes of transport that
can be used such as road transport, rail transport, as well as waterways. The operational sequence
is also part of the main activities which continue to focus on the concept of refining the crude oil
in the form of refined oil that is transported on. By using the various outbound logistics
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processes, the transported goods are further distributed. In addition to the transport networks, the
various outbound logistics also include pipeline networks (Adedoyin, F.F and et.al., 2021).
The supporting activities are essentially the activities that help support the primary
activities and the process of implementation. British Petroleum's support activities are generally
characterized by several inexperienced employees who work in several corporate areas. The
infrastructure usually includes the various sales and logistics networks. These networks continue
to facilitate the use of the networks to transport or ship the crude oil products as well as the
refined oil products. These are transported with the help of oil pipelines together with the
shipping division of British Petroleum. The technology most commonly used by the organization
in the organization's research and development department is Purified Terephthalic Acid
Technology, Carbon Capture and Storage Technology (CSS), British Petroleum Solar, and
Bright Water Technology.
For the organisation the financial resources are of huge importance. In addition, the value
chain analysis is also very important in the value chain of British Petroleum. The financial
resources are tremendous support for the primary activity and technology support involved in oil
and natural gas exploration and production. Technology plays an important role in the further
development and marketing of the products and related services of the organization or brand. In
addition, the strategic fit in the organization deals with the way in which the organization has
reached its resources, along with the goal of smooth operation to complement the various goals,
objectives, as well as strategies of the organization (Amran, Y.A and et.al., 2020). It is assumed
that the strategically well-suited organization will also be successful in ongoing operations, while
the organization's resources are used optimally. British Petroleum was analyzed to have
successfully achieved the strategic fit which further attested that most organizational strategies
were successful in both achieving the goals and objectives of the organization. British Petroleum
has achieved its goals by minimizing various production costs as well as manufacturing costs
while selling thin film photovoltaic while offering improved operational reliability.
British Petroleum was able to achieve the strategic adjustment while minimizing
corporate overheads as well as reducing the investment of the organization's funds in the research
and development activities of the alternative energy organization. The activities have further
helped the organization gain competitive advantage over the various other oil organizations in
the UK transport industry (Al-Ali, A and et.al., 2019).
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CONCLUSION
From the essay it can be concluded that strategic analysis plays a crucial role in the
organization. Strategic analysis includes both internal and external analysis of the organization,
which tends to describe the various elements that have an impact on the business performance of
the organization. Strategic analysis is basically a process by which an organization examines the
business environment of an organization. It tends to facilitate strategic planning to facilitate
decision making for the smooth running of the organization. From the essay it can be concluded
that there are several external factors in the company's environment that can represent both
opportunities and threats. The organization must work to seize opportunities and formulate
strategies to avoid threats. In addition, it can be concluded that any organization in any industry
tends to go through the industry life cycle and therefore the strategies must be formulated in
accordance with the phase that the organization is going through.
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References:
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