British Petroleum Strategic Management and Sustainability

This research provides a critical examination of the oil production sector as well as an appropriate analysis of British Petroleum's competitive environment in order to determine their competitive standing within the sector. The research also discusses the sustainability of strategic management and its importance. The competitive environment of British Petroleum is analyzed using Porter's Five Forces and SWOT analysis. The PESTLE analysis is also used to analyze the external factors affecting the industry. The industry life cycle of British Petroleum is also discussed.

Strategic Management
and Sustainability

Table of Contents
INTRODUCTION...........................................................................................................................3
Overview.....................................................................................................................................3
MAIN BODY...................................................................................................................................4
Critical Analysis of Industry as well as The Sector....................................................................4
Competitive Environment of British Petroleum.........................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic management is defined as a continual process of analysing, planning, monitoring,
and evaluating a company's needs in order to fulfil and achieve its appropriate goals and
objectives. Significant changes in company and its environment will necessitate organisations
modifying their strategy across the board in order to maintain overall growth (Cavaleri and
Shabana, 2018). Sustainable strategic management entails making the necessary efforts and
taking steps to improve the social and environmental consequences of human activity. For this
research, British Petroleum is used, which is the world's largest energy company, founded in
1909 and headquartered in Westminster, London, United Kingdom. The research goes on to
provide a critical examination of the oil production sector as well as an appropriate analysis of
British Petroleum's competitive environment in order to determine their competitive standing
within the sector.
Overview
The petrol outlets were halted in 2021 because to a worldwide scarcity of supply for large
vehicles, according to research. British Petroleum has apologised for the current situation of fuel
shortages at their stores across the United Kingdom. They go on to say that due to a scarcity of
crude oil and diesel providers, some of their supply facilities are temporarily closed. It was also
discovered that this circumstance arises as a result of a meeting between government officials
and executives from major corporations to discuss supply chain difficulties in the United
Kingdom.
They also included a message from Downing Street claiming that there is no fuel scarcity. It
leads to increased political pressure to respond to the growing demand for more action to
alleviate supply chain and labour shortages amid the Brexit and pandemic (Durand, Paugam and
Stolowy, 2019). To entice workers to farms, road haulage companies, and industries, the
organisations aim to implement visa schemes or outsource certain tasks. Despite this, Rod
McKenzie of the Road Haulage Association, who was accused by ministers of dramatic
opposition to the launch of visa programmes to recruit a pool of candidates, is threatening the
whole situation.
3

MAIN BODY
The corporation can use the sustainability of the strategic management process to gather
information and numbers about current scenarios, plan and shape them, apply and analyse their
overall impact on management plans. Both internal and external variables contribute to this, and
both provide imperatives for the company's strategic management approach to preserve
sustainability in both internal and external aspects.
Critical Analysis of Industry as well as The Sector
British Petroleum is an oil and gas corporation that supplies fuel and electricity to a
number of countries across the world (Cantele and Zardini, 2018). It is regarded as one of the
world's most powerful companies, operating in the oil and gas industry and supplying power to
countries all over the world. The following is a proper analysis of the sector in which British
petroleum operates: SWOT analysis of British Petroleum
This is a marketing tool which has been applied by companies in order to identify their
strengths and weaknesses which they could improve for enhancing growth as well productivity.
This tool also helps companies in determining opportunities and threats that organisations could
face in the market. In context to British Petroleum, its SWOT analyses has been explained below
in detail:
STRENGTHS WEAKNESSES
 The company is mainly deals in oil and
gas but also has diversified its business
in various other areas such as energy,
lubricants, aviation fuel, information
technology and many more.
 The respective company also has loyal
customers and they possess a long term
relationships with company (Rocha,
Antunes and Partidário, 2019). They
utilise all the facilities provided by the
company in very effective manner.
 The selected company is one of the
 The biggest weakness that the
respective company posses is that it is
unable to penetrate non-energy market
effectively. Its absence from non-
energy sector will impact the market
position in the long run for the
company.
 The company also gets into various
legal issues related to oil spills in
several parts of the globe. This
weakness impacts its sustainability and
brand image in the market.
4

market leader in UK as well as on
global level. The company is biggest
supplier in oil and gas in domestic
country along with international
market.
 The company has strong network
connection across the world in all its
sectors such as Europe, South America,
North America, Africa and Asia
Pacific.
 This company also encounters with
various scandals associated to dishonest
transactions from workers and spillage
disastrously. This represent the image
of the company negative among people
and market.
OPPORTUNITIES THREATS
 The company has strong presence in
the energy sector which provides it to
explore alternative energy options that
includes wind and tidal energy. The
world wide focus on sustainability is
developing several opportunities in
alternative energy options.
 The company could also try to engage
itself with developed economies in
order to create solutions related to
infrastructure challenges that makes
utilisation of other energy options (Lu,
2021). This will assist company in
improving its image in the market and
among people.
 As the company operates its business in
international market which makes it
responsible for respecting and
following government regulations. If
the company lacks in following
government regulations properly than it
could face legal consequences.
 The respective company could also face
high competition in the market from
other firms such as OMV Group, Total
Energies, Chevron and many others.
The intense competition in the market
for selected company could impact on
its market position.
PESTLE Analysis
PESTLE analysis is a powerful analytical method for assessing overall environmental
conditions and analysing external elements that affect the entire industry. It leads to the inclusion
5

of those aspects that have a significant impact and influence the entire sector's operations. This
paradigm is critical for analysing developments in the context of preparing to stay competitive in
the corporate world. The following is a PESTLE study of this organisation: Political: This is a crucial aspect since it has an impact on the general expansion of
profitable businesses and the progress of British Petroleum, which is dependent on
political decisions in its own sectors (Ugoani, 2019). It considers important aspects such
as labour rules, tax laws, and life-threatening explosions, terrorism, and other hazards.
These can cause a company's business activities to get jumbled. Political interests tend to
have an impact on corporate operations in a few sectors. Economic: These aspects examine how British Petroleum makes strategic decisions in
the context of a certain economy and scenario. For example, the company's profit margin
has decreased as a result of the global market decline caused by COVID. The cost of
capital was also affected or fluctuated as a result of the increase in interest rates, and the
cost of importing and exporting energy commodities increased as a result of the changes
in economic conditions. Social: It includes changes in social behaviour and awareness that have occurred in
recent years as a result of the overall increase in environmental development. Because
workers are projected to live longer, the general demand for increased distribution of
employee pension funds has led to an increase in corporate costs. It means that
appropriate challenges to deal with rapid environmental changes will lead to increases in
the next years. Technological: In producing renewable, sustainable, and global energy outputs, the
organisation has also faced considerable obstacles and opportunities. For this reason, the
corporation has chosen to use excellent digital media and IT to monitor and track the total
transfer of fuel through its extensive pipes (Mensah and Gordon, 2020). The organisation
has a well-designed website through which they can easily engage with their consumers
about a variety of topics as well as important information about the adoption of cutting-
edge technology and the development of alternative energy sources. Legal: These characteristics are linked to serious instances and accusations levelled
against an organisation in connection with Gulf of Mexico spills and unintentional or
accidental explosions that are destructive or life threatening. In addition, the corporation
6

has broken various standards and rules relating to total commission and, despite this, the
Net Zero 2050 goal. Aside from that, numerous nations have mandated minimum
salaries, which has resulted in increased health and safety legislation, as well as the
development of tight employment policies in response to the increase in overall corporate
expenses.
 Environmental: It depicts the enormous increase in the overall population of humans on
the earth, resulting in a greater demand for fuel and energy (Mullakhmetov, Sadriev and
Akhmetshin, 2018). As a result, environmental groups are always raising concerns about
environmental damage caused by the corporation. The corporation is being accused of
violating important human rights, and they are also moving closer to the tribal people
from their overall sites in order to extend their pipes into indigenous territories.
Competitive Environment of British Petroleum
Porter’s Five Forces
Porter's five forces is a model that analyses and determine the five competitive forces that helps
every industry to know its weaknesses and strengths. Five forces analysis is continue sly help to
identify an industry's structure to find out corporate strategy (Rosini, Gunawan and Hakim,
2020). Porter's five forces model will be applied on British petroleum to discover its current
position in the market in terms of its competitiveness in the industry. This forces are applied on
the company to affect its operations and positions in the markets.
Industry rivalry
The major competitors for British Petroleum include Texaco, shell, OMP , Petrol china
and many more in this industry. In the energy industry all the competitors are compete with
each other on the basis of product differentiation, fixed and variable costs and economies of
scale for these companies. The current situation of the world where the oil fields are drying up
and almost near to end and the companies are continue sly seek to getting the fair and large
share of the market. British petroleum also merges with various small companies to compete
with competitors and earn huge profits share in the market. For renewable resources, companies
are in rivalry to build up their structure of restorative resources.
Threat of new entrants
Due to the huge profits British industry is very captivating in this business and many
other reasons, because there are high barriers to entry including the high fixed costs involved in
7

this finance of establishing an energy resources company so, there is a less threat from new
entrants in this field . So, it is not easy for new companies to enter in this industry and compete
with large profitable company . Because they captured a bigger share of the market and already
selling their product in more innovative ways and build trust of their customers. And faced
various challenges to safeguard their position in competitive market.
Bargaining power of buyers
Buyers are often to demanding a lot and attracted towards the profit of existing
companies in the industry through their quality and services to lower prices and need to supply
higher product or service quality (Ulubeyli and Kazanci, 2018). In the oil business, the cost of
the oil depends upon the world demand of it. Various countries can use their power to bargain
even with big suppliers like British petroleum. The countries which have high power and are
developed also have a bargaining power over their supplier When it comes to everyday
consumers, the buyers have power too because it is very easy for them to switch to another oil
provider depending upon their own requirement.
Bargaining power of suppliers
When the raw materials provided by the suppliers represent a large proportion of the
total cost of the product to the customers, the actual bargaining power of the supplier is greatly
increased. suppliers for British petroleum include the suppliers from oil field, the engineers that
work on it, and technicians and other managements (Schulte, Villamil and Hallstedt, 2020).
British petroleum have an bound over their suppliers in this case as they can bargain with their
suppliers by building efficient supply contact with various suppliers .because the suppliers will
not be willing to suffer such business. These countries have bargaining power over their buyers
because oil fields countries are also the suppliers so the over all effect of higher bargaining
power of suppliers is lower the profitability of gas and oil.
Threat of substitutes
Substitutes products refers to the products having power of satisfying customers needs
impressively.. Substitutes affects the profit of any company. Biofuels and other inexhaustible
resources can be the substitutes in an oil industry. Companies are still working for their
development and know the core needs of buyer instead of what the customer is buying they
have less threat and it will take them some time to replace the oil resources . The government
8

plan of action that opposes the use of fossil fuel are a danger for any company working in the oil
company. So in case of British petroleum the threat from substitutes is moderate.
Industry Life Cycle
British Petroleum's industry life cycle is relatively similar to that of other organisations and
sectors; however, it differs from the product life cycle in that it leads to the total supply side of
the product life cycle. The product's emergence stage, growth, maturity, stabilisation, and
declining growth are all stages of the industry life cycle. The growth rate is a representation of
the changes that will occur within the industry. The production factor represents the entire state
of a product's growth as a result of sales and promotion.
This is the introduction stage, where the curve increment is fairly minimal when new
products are offered to the market. The second stage is the growth stage, in which the company
strives to achieve quick expansion while also defining its entire market position. The company's
next phase is one of maturity or stabilisation, in which it does not expand or fall (Calitz, Bosire
and Cullen, 2018). Apart from that, the corporation is distinguished by competitive hostility, and
the organisation performs at the same level as the company by representing it. Aside from that,
the corporation makes a concerted effort to expand its branches and buy more land.
British Petroleum is at a point where it is trans and does not have to worry about its
competitors since it has already reached a point where they are unable to access and expand its
total territory. The industry cycles in the third stage, maturity, where the entire sector is stagnant
and growth is increasing. The final stage is decline or slow growth, in which the company is on
its way to liquidation and its capacity and capability are dwindling since it can no longer
continue its production.
CONCLUSION
From the above discussion, it can be concluded that strategic management and sustainability
is a practise that assists a firm in properly planning, monitoring, analysing, and assessing its
needs in order to reach and achieve its objectives and goals. The research leads to the
presentation of a profitable corporation that deals with significant problems posed by external
factors. The report displays a critical examination of the industry in which the company operates.
Using strategic techniques such as SWOT and PESTLE, a corporation can assess both internal
and external aspects that influence corporate performance and operations. The paper also
examines British Petroleum's competitors using Porter's Five Forces and the industry life cycle.
9

10

REFERENCES
Books and Journals
Calitz, A., Bosire, S. and Cullen, M., 2018. The role of business intelligence in sustainability
reporting for South African higher education institutions. International Journal of
Sustainability in Higher Education.
Cantele, S. and Zardini, A., 2018. Is sustainability a competitive advantage for small businesses?
An empirical analysis of possible mediators in the sustainability–financial performance
relationship. Journal of Cleaner Production, 182, pp.166-176.
Cavaleri, S. and Shabana, K., 2018. Rethinking sustainability strategies. Journal of Strategy and
Management.
Durand, R., Paugam, L. and Stolowy, H., 2019. Do investors actually value sustainability
indices? Replication, development, and new evidence on CSR visibility. Strategic
Management Journal, 40(9), pp.1471-1490.
Lu, L.W., 2021. The moderating effect of corporate governance on the relationship between
corporate sustainability performance and corporate financial performance. International
Journal of Disclosure and Governance, 18(3), pp.193-206.
Mensah, A.M. and Gordon, C., 2020. Strategic partnerships between universities and non-
academic institutions for sustainability and innovation: Insights from the University of
Ghana. In Sustainability Challenges in Sub-Saharan Africa I (pp. 245-278). Springer,
Singapore.
Mullakhmetov, K.S., Sadriev, R.D. and Akhmetshin, E.M., 2018. Corporate culture in
management systems.
Rocha, C.S., Antunes, P. and Partidário, P., 2019. Design for sustainability models: A
multiperspective review. Journal of Cleaner Production, 234, pp.1428-1445.
Rosini, I., Gunawan, J. and Hakim, D.R., 2020. The contingent fit between management control
system and capabilities on sustainability performance. International Journal of
Business, Economics and Management, 7(6), pp.375-386.
Schulte, J., Villamil, C. and Hallstedt, S.I., 2020. Strategic sustainability risk management in
product development companies: Key aspects and conceptual approach. Sustainability,
12(24), p.10531.
Ugoani, J., 2019. Business ethics and its effect on organizational sustainability. Global Journal
of Social Sciences Studies, 5(2), pp.119-131.
Ulubeyli, S. and Kazanci, O., 2018. Holistic sustainability assessment of green building industry
in Turkey. Journal of Cleaner Production, 202, pp.197-212.
11