British Petroleum: Strategic Management and Sustainability

This report analyses the business strategies pursued by British Petroleum over the past five years, its resources and capabilities, and evaluates its environmental sustainability theories and science to become more competitive. The report also includes an introduction and conclusion.

Strategic Management
and Sustainability

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Identifying business strategies pursued by a company over five years...................................1
2. Identifying resources and capabilities of an organisation to its business strategies................3
3. Evaluating environmental sustainability theories, science for company to become more
competitive...................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic management is derived of planned utilization of resources of business in order
to reach and accomplish organisational goals and objectives (Agwu, 2018). Strategic
management needs ongoing evaluation of procedures as well as processes of a company along
with external factors which impacts functions of company. Sustainability is known as doing
business without causing a negative impact on community, society, environment as a whole. For
this report, British Petroleum is a selected company which is headquartered in London, England,
UK. This company is a multinational gas and oil company and is one of the seven super-major of
oil and gas in world. British Petroleum is vertically integrated British organisation which
operates in all areas of gas and oil industry which consists of exploration, extraction, refining,
marketing, distribution, etc. Its processes also includes renewable energy of biofuels, smart grid,
wind power,etc.
The report includes business strategies of a company for past five years along with frame
works to discuss why this strategies were pursued by company. It also includes analysis of
resources and capabilities of an organisation in terms of competitive advantages. This report also
consists of environmental sustainability theories as well as ways of thinking to become more
competitive for company in market.
MAIN BODY
1. Identifying business strategies pursued by a company over five years
Business strategies are list of actions, plans as well as goals which are created by an
organisation to outline business activities to compete in a particular market with a product or
market with a portfolio of goods and services (Anh, Huy, and Phuc, 2021). British Petroleum
creates and develops business strategies to outline activities of business with its oil and gas
products in international market of haulage industry. British Petroleum is leading supplier of oil
as well as a trader of energy in international level. It is a critical role for British Petroleum to
ensure that its supply chain of energy is operating in a effective manner across globe. Various
strategies are being identified and pursued by British Petroleum over past five years which are
analysed by considering Ansoff Matrix framework and is determined as below-
Ansoff Matrix-
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 Market Penetration- This step entails in a process for growth where an organisation
focuses on sale of its existing products in an existing market by various means of
promotion, distribution techniques (Bellucci, Bini and Giunta, 2020). In context of
British Petroleum, company increases its market share by adopting various competitive
strategies such as pricing, advertising, sales promotion and personal selling. Company
also works as a dominant player in its existing market and makes measures to secure the
position of a dominant player in existing market. Company also develops market
restructuring through aggressive campaigns of promotions in order to eliminate
competitors from market. In order to create a high level of usage of its products British
Petroleum introduces schemes to create loyalty in its existing market. Company adopts
various pricing as well as promotional strategies which includes competitive pricing
strategies where company offers quality products at a low rate as compared to its
competitors in market. Company also adopts different means of promotions such as
digital marketing landscape with motive to attract more customers online. Market Development- In this step of market development, companies enters into a new
market with its existing products (Brusca, Labrador and Larran, 2018). In aspect of
British Petroleum, company imply this strategy to achieve growth by selling its existing
products of oil and gas into new market. Company involved in exploration of new market
by exporting its products beyond its geographical areas of home country. British
Petroleum also establishes new channels of distribution along with creating new
dimensions of its existing products. British Petroleum also adopts new policies of pricing
its products as per different insights of its customers depending on economic conditions
of that country as well as taxation charged by that respective country. Company changes
its pricing strategies in different countries with objectives to generate more revenue by
attracting more customers by creating new segments of market. Product Development- This step of Ansoff matrix implies growth strategies in which a
company focuses in introducing new products in an existing market (Calitz, Bosire and
Cullen, 2018). British Petroleum looks forward into developing and creating new
competencies which are coupled in terms of developing or modifying its products in
market. Company has introduced providing gas services to vehicles in its existing market
in order to attract more customers which opt for LPG vehicles. British Petroleum makes
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efficient use of exploration along with its production segment while engaging in search of
underdeveloped reservoirs of oil and gas with objective to develop reservoirs of
production and transporting natural gas with its oil tanks which are developed in its
existing market. Upstream activities undertaken by British Petroleum as incorporate
exploring and extracting crude oil all together with natural gas in diverse countries from
wells. In order to achieve a sustainable position in market in terms of international scale
British Petroleum massively invested in two major areas by aiming in improvement
which includes information technology as well as human resource. These investments has
contributed positively while improving efficiency of production in order to gain
competitive advantages.
 Diversification- This is a step of growth adopted by companies where companies
introduces new products in a complete new landscape of market (Cantele and Zardini,
2018). Here in this process companies usually face lots of challenges due to lack of
experience which are sufficient to achieve objectives in diversification. British Petroleum
comes up with strategies and ideas of expectations along with plans to assess potential
risks which are associated with undertaking. British Petroleum collaborates with joint
ventures in various countries in order to deal with production and marketing of oils with
includes bio fuels which aims in enhancing production capacity that are coupled with
gaining access to non traditional areas of competitive market that are dealing with energy.
In addition to diversification process opted by British Petroleum derives that risks are
associated with its business in diversification process as it is synergy with original nature
of its initial business.
2. Identifying resources and capabilities of an organisation to its business strategies
In order to analyse resources and capabilities of British Petroleum while adopting VRIO
analysis in terms of its business strategies while to acknowledge its competitive advantages are
as below-
VRIO analysis-
Resources and
capabilities
Valuable Rareness Imitable Organisation Competitive
advantages
Financial YES NO NO YES Temporary
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resources competitive
advantages
Talent to
manage
regulatory
and legal
obligations
YES NO NO YES Temporary
competitive
advantages
Track record
of leadership
YES YES YES YES Sustainable
competitive
advantages
Brand
awareness
YES YES NO YES Sustainable
competitive
advantages
Global and
local presence
YES YES YES YES Strong
competitive
advantages
Intellectual
property
rights,
copyrights
YES YES NO YES Sustainable
competitive
advantages
Opportunities
in e-
commerce
space
YES NO YES NO Temporary
competitive
advantages
Valuable- Financial resources of British Petroleum are highly valuable resources as they
attracts and invest into external opportunities to expand its business operations over time (de
Paula and Melhado, 2018). Company also has a valuable capabilities to manage regulatory and
legal obligations along with capabilities to track and record leadership team. British Petroleum's
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brand awareness are also valuable for company as it build and attracts more customers. Company
also has a strong relationship with its retailers as well as wholesalers which makes this capability
as highly valuable for company. British Petroleum has high opportunities to extend brands as
new niche are emerging in market rapidly. Company has a valuable presence in global and
domestic market as it diversify revenue streams as well as isolate company's balance sheet from
economic cycles. Company also has a valuable legal team as they company to thwart
competitions. Rapidly growing e-commerce space makes opportunities for British Petroleum to
leverage firm to grow. This helps company to attract more audience through use of digital sites
such as e-commerce, social sites, search engine optimization etc.
Rareness- Financial resources of British Petroleum are rare to found as this kind of
strong financial can only be found in few companies operating in this haulage industry (Fu, Tang
and Chen, 2020). Company also has rare patent resources which helps company to trade easily in
various countries. This type of patent resource are to be found with other competitor firm
operating in this respective industry. Leadership team of British Petroleum are rare to be found
as it effectively tracks records of companies past actions as well as future actions. Brand
awareness of British Petroleum is also rare as company shares a position of a dominant leader in
market through its brand awareness as well as products which cannot be seen in case of its
competitors. Company also has a dedicated channel partners making its retailers as a rare
resources for company. Company also has its presence in global and local market making its a
rare capability for company which cannot be seen in this competitive environment with other
firms. Intellectual property rights and other rights acquired by British Petroleum is rare as its
competitors cant copy them.
Imitable- British Petroleum's financial resources cannot be imitate by other firms
operating in this industry as it needs a lot of investment as well as capital to build as such as
strong financial resource by other firms (Galleli, Hourneaux Jr and Munck, 2019). Capability of
keeping track record of leadership team is hard to imitate by competitors of British Petroleum in
haulage industry. Talent to manage legal obligations can be imitated by other firms as it is not
that tough to build a team to manage regulatory bodies for that respective firm. Building a brand
reputation as such as British Petroleum is tough to imitate by competitive firms as company has
created it by satisfying customers in market it its quality products such as oil and gas. Building a
relationship with retailers and wholesalers as such as British Petroleum are tough for other firms
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though it is not impossible for them. Opportunities for brand extensions can be imitated by other
firms operating in this haulage industry. Imitable risk for intellectual property rights is low in
case of British Petroleum as it cannot be copied by other firms easily. AI as well as in-house
analytics used by British Petroleum is difficult to imitate.
Organisation- Financial resources of British Petroleum is well organised to attract
external opportunities to expand business operations. Talent to manage regulatory is well
organised in British Petroleum. Leadership team of British Petroleum is well organised to keep a
track record of company's activities in regards of employees performance to achieve objectives
of business. British Petroleum has secured a leading brand position in market and maintaining it
for over a time period in various segments (Vidal and Croom, 2018). Company has organised
its retailers and wholesalers so well to use them for future growth and to achieve sustainability.
Brand extensions in aspect of competitors of British Petroleum will require higher marketing
budget to achieve such a brand as British Petroleum in market. Distribution network of British
Petroleum is so well organised in British Petroleum which makes company one of top diversified
organisations operating under this haulage industry. Employees of British Petroleum are well
trained and high skilled to attract more customers by creating and developing efficient strategies
to sustain in sustain as well as achieve business objectives of company in competitive market.
3. Evaluating environmental sustainability theories, science for company to become more
competitive
Sustainability is foundation of new strategy for British Petroleum to secure and maintain
a sustainable position in market while attracting more stakeholders which includes employees,
society and shareholders with objective to gain long term resilience as well as value for business
(Hanski and Ojanen, 2020). Company has adopted some sustainability strategies which consists
of objective to reduce carbon electricity and energy, mobility and convenience as well as
resilient and focused hydrocarbons. Evaluating various environmental sustainability science and
theories adopted by British Petroleum to become more competitive in haulage industry is as
below- Low carbon energy and electricity- British Petroleum is looking forward in measures
to build scales in bioenergy and renewable practices by seeking early positions in
carbon capture and hydrogen. Company also builds outs its portfolio of customers in
terms of gas usage while complementing low carbon energies. Company has started
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providing gas for energy saving vehicles as well as looking to establish energy plants in
its stores to provide electricity,gas as well oil all together. Mobility and convenience- British Petroleum focuses on providing satisfaction to its
customers while helping to accelerate global revolutions in aspect of mobility (Thorén
and Vendel, 2018). Company also redefines convenience retail experience along with
scaling its presence in global market in order to achieve growth. Along with this
measures British Petroleum is also taking measures to reduce wastage in its production
as well as distribution activities undertaken by organisation to sustain in long run.
Company has also reduce water footprints in its operational activities in order to save
valuable water resources to conserve for future use. Focused hydrocarbons and resilient- British Petroleum is maintaining an absolute
focus on operational reliability as well as safety. Company adopts this strategy to intend
continuity of its high grade portfolio which are gradually resulting enhancing
competitive producing as well as refining.
 Zero carbon ambition- British Petroleum is focusing in developing sustainable
strategies in order to reduce carbon emission from its business process in environment
(Johnsen, Howard and Miemczyk, 2018). Company aims to be a net zero emission
sooner or by 2050. along with zero emission company is also looking forward to
improve people's lives by providing sustainable livelihoods, greater equity, enhances
well being of people, etc. British Petroleum aim is also to take initiatives to provide
protection to resources of environment by enhancing biodiversity, purchasing
sustainable material from suppliers, unlocking circularity,etc.
CONCLUSION
As per the above report it is concluded that sustainability refers as meeting needs of
present with making future generation to compromise in order to meet their needs. In other
words it is a process adopted by business organisation which includes operating its business
activities without negatively impacting society, environment, etc. VRIO analysis is a framework
used by management of companies to analyse its resources and capabilities with its competitors
in aspect of achieving competitive advantages. Strategic management is process of planning,
analysing, monitoring as well as assessment of various necessities that a company needs to
accomplish its business objectives and goals. Strategic management consists of activities of
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various functional areas of a company. Ansoff matrix is a tool which provides frameworks to
help management of a company to make and develop strategies in order to achieve business
objectives as well as sustain in market.
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REFERENCES
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reporting at universities: A case study. Journal of Cleaner Production. 188. pp.347-354.
Calitz, A., Bosire, S. and Cullen, M., 2018. The role of business intelligence in sustainability
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Hanski, J. and Ojanen, V., 2020. Sustainability in strategic asset management frameworks: a
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Management. 3(4). pp.263-294.
Johnsen, T. E., Howard, M. and Miemczyk, J., 2018. Purchasing and supply chain management:
A sustainability perspective. Routledge.
Thorén, K. and Vendel, M., 2018. Backcasting as a strategic management tool for meeting
VUCA challenges. Journal of Strategy and Management.
Vidal, N. and Croom, S., 2018, July. Integrating Best Practices in Sustainability Within Supply
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