Petroleum Industry: Challenges and Sustainability

This assignment delves into the multifaceted aspects of the petroleum industry. It examines the various challenges faced by the sector, including environmental concerns related to extraction, processing, and transportation of fossil fuels. The analysis also explores the implications for worker health and safety, particularly in offshore operations. Furthermore, the assignment investigates sustainability practices being implemented within the industry to mitigate its environmental footprint and promote responsible resource management.

Running head: CASE STUDY: BRITISH PETROLEUM
Case Study: British Petroleum
Name of the Student
Name of the University
Author Note

1CASE STUDY: BRITISH PETROLEUM
Table of Contents
Chapter 1: Introduction..............................................................................................................2
1.1 Background of the case study..........................................................................................2
1.2 Research Problem.............................................................................................................5
1.3 Research Questions..........................................................................................................6
1.4 Research Aim...................................................................................................................7
1.5 Research Objectives.........................................................................................................7
1.6 Structure of the Report.....................................................................................................7
Chapter 2: Literature Review.....................................................................................................9
2.1 Introduction......................................................................................................................9
2.2 Analysis of the Petroleum Industry..................................................................................9
Chapter 3: Research Methodology...........................................................................................19
3.0 Introduction....................................................................................................................19
3.1 Research Outline............................................................................................................20
3.2 Research Onion..............................................................................................................21
Figure 3.1: Research Onion..................................................................................................21
3.3 Research Paradigm.........................................................................................................22
3.3.1 Research Philosophy...............................................................................................22
Figure 3.2: Research Paradigm............................................................................................23
3.3.2 Research approach..................................................................................................23
3.3.3 Research Design......................................................................................................24

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3.4 Sampling method...........................................................................................................25
3.5 Research Strategy...........................................................................................................26
3.5.1 Justification for selection of research strategy (Survey and interviews).................27
3.6 Data collection methods.................................................................................................27
3.6.1 Primary research......................................................................................................27
3.7Accessibility issues.........................................................................................................28
3.8 Ethical consideration......................................................................................................28
3.9 Data analysis..................................................................................................................29
3.10 Time Frame of the Research........................................................................................29
Chapter 4: Data Analysis.........................................................................................................31
4.1 Introduction....................................................................................................................31
4.2 Strategic analysis using relevant Business models........................................................31
4.3 Findings from the Analysis............................................................................................40
4.4 Proposed Solution for the Management.........................................................................41
4.5 Selection of strategies of Success..................................................................................42
Chapter 5: Conclusion and Recommendations........................................................................43
5.1 Introduction....................................................................................................................43
5.2 Conclusion Review that is drawn from the objective of the research............................43
5.3 Action Plan and Recommendations...............................................................................44
5.4 Limitations of the research work....................................................................................45
5.5 Chapter Summary...........................................................................................................46

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References................................................................................................................................47

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The Factors behind declining sales of BP (British Petroleum)
Chapter 1: Introduction
1.1 Background of the case study
British Petroleum is a multinational oil and gas company, which is the largest of its kind in
the UK and seventh largest in the globe in terms of revenue. It is also thereby considered to
be one the major superpowers in the matters of dealing with the market capitalization and
deciding upon the marketing policies in the industry of oil and gas all over the globe. The
operational department of the organization includes production, refining and exploration of
the oil mining fields. The marketing department of the organization also ensures that the
petrochemical products are being properly distributed within the market along with that of the
trade. The company also has their operations within the department of renewable energy.
The company has its headquarter located at London and was established in the year
1908. The initial brand name of the company is that of Anglo-Persian Oil company (bp.com,
2017). The company currently operates in more than 70 nations all across the globe and the
fuel that are being produced are used in the operations of all types of automobiles and
electronic units. The types of fuel that are being produced by the engines and also used as a
part of the lubricants. The company also operates in diverse types of portfolios, which make
use of the different types of resources. The expansion of geographic segmentation helps in
the matters of improving the range of business. This helps them to make use of different
types geographical resources that are available across different parts. With the diverse range
of resources that are available within the company, it will help in the matters of procuring the
resources for the future and use the same during the time of crisis. The company is always

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seeking to improve upon their utilization capability of the hydrocarbon resources. The
company has developed upon the hydrocarbon resources in order to facilitate their global
operational function. The pipeline project that has been installed by the company will help in
the matters of dealing with that of trade and distribution of the petrochemical products across
different nations. The business model of the company is mainly aimed to maintain
sustainability within the petrochemical business. The company also has a wide range of
supply chain network that are utilized properly in all parts of the trading business. The traders
of the company completed the transactions of 550,000 that is meant to serve the business for
over 12,000 customers all across the globe (bp.com, 2017). The company also has dedicated
market intelligence that are used to analyze the changes that occurs within the trade business
and deal with the global network. Hence, the firm is able to meet up with the growing
demand for the petroleum products. The refineries of the company are able to produce the
best quality products, which has been able to maintain the reputation of the premium brands
of the company. The use of highly advanced technology along with that of the effective
policy in the matters of customer relationship management has helped the company to gain
significant competitive advantage. The company also has been set up business partnership as
outsourcing unit that are mainly aimed to improve upon the logistics and supply chain for the
traders.
As of calculated in the year first quarter of 2017, the total revenue of the company
was calculated to that to be $183 billion. The total assets value is estimated to be that of $263
billion. A total of more than 74,500 employees have been currently recruited by the company.
The profit value of the company was estimated to be that of US$ 115 million (bp.com, 2017).
The average rate of the energy growth and that of energy consumption has been
increasing at an average rate of 1.8% for the last 10 years. In the year of 2015, the average

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growth rate for the petroleum products was much below compared to that of the all other
forms fuel that includes nuclear power and other forms of the renewable sources of energy
supply. Nevertheless, till date, the petroleum products remained the world's largest supplier
of fuel and it helps to fulfil the energy needs of the world. The average rate of oil
consumption is estimated to be that of 1.6 million barrels per day. The highest consumer of
the oil is estimated to be that in China with having 400,000 barrels per day followed by India
with 330,000 barrels per day. The British Petroleum plays a major role in deciding upon the
price and the supply rate of the petrol in the markets all over the globe (D’Andrea and Reddy
2014).
1.2 Research Problem
Financial issues
In spite of being one of the biggest revenue holders in the petroleum market, the BP in
the recent times have not been able to maintain their high levels of profit. As per as the latest
reports the sales record of the company has been the worst in 2015 within the past 30 years.
There was 91% decline in the overall rate of sales that was calculated in the fourth financial
quarter if 2015 (Katakey, 2017). This is mainly due to the fall in the rates of the crude oil
price in all over the globe. The rate was recorded to be the lowest in over a decade. The crude
oil spill in the region of the Gulf of Mexico has resulted in the loss of $10.8 billion. As the
period of lower level of the crude oil price decreased and the lower level of price is
maintained for a longer period, the BP has to cut their costs and the annual capital spending.
The annual expenditure was lowered from the rate of $20 billion from $22.9 billion. The
financial officials of BP have predicted that this downfall. The level of profit of the company

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has also fallen at the margin of $600 million. The security issues of the company are one of
the prime causes of concerns that has occurred within the region of Libya. This has been the
major causes decline in the total amount of revenue income for the company. The company
has to cut the cost of 5000 employees, which has resulted in the restructuring of the of the
overall organization. The cost of the restructuring of the overall organization has increased
from $1.5 billion to $1 billion (Tankiewicz et al. 2013).
This decreased level of income cost of the overall organization has resulted loss of
overall revenue decline of the company. Nevertheless, the company has maintained an
effective level of relationship with their investors by maintaining the dividend payment rate
of 10% per share. In the given context the current research will aim to highlight upon the fact
that have been causing lower level of sales for the British Petroleum over the past many
years. The loss of revenue and the overall net income is one of the primary problems that has
been faced by the organization. It is highly essential for the company to deal with the issues
that at the global market level. The main purpose of the research is to gather the evidence that
will help the British Petroleum to identify upon their issues. The research will mainly focus
on the information that is obtained from the case study related to the sales record of the
British Petroleum.
Environmental issues
From a report related to the Deepwater Horizon incident, there was a record in fall of
55% of the shareholder of the British Petroleum. The incident was caused due to the
explosion in the region of Macondao Prospect, which resulted in the death of 11 crew
members. The BP was also not allowed by the US Environmental Agency for the
development of further new work related to that of bidding new work. Hence, it was not

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possible foe BP to get the supply of the raw materials from the respective regions. The
accident also caused destruction of the wealth of shareholders. The value of per share went
down to the amount of $27 per share to the amount of $59.48 that was lower than 55% of the
normal value. Even after recovery of the sales record, the value of each share was that of $37
to $52 (Marketrealist.com, 2017). The average value of the stocks was also lesser compared
to that of the normal value.
One of the major causes of concerns for that of British Petroleum is due to the matter
related to the environmental degradation. This can be said that due to the effects of oil spill
incidents, there has been huge fall in the sales values. This is also one of the major issues that
have compromised on the social reputation of the company and they were not able to follow
the legal policies. Hence, the company has not been able to deal with the policies of the
corporate social reputation.
The global demand for the energy in the forms of fuel consumption is changing fast
due to the fast pace of technological development in all parts of the globe. The energy mix is
also driven and continued by the improvements that have taken place due to the technological
development within the last few decades. The global marker of the technology is also driving
fast due to increase in the demand for fuel. The fast pacing developmental rate of the
economy is also causing huge change in the supply chain network of the petroleum products.
This is mainly due to the fact that most of the emerging economic nations of the globe are
highly dependent on the petroleum products. this has also resulted in the increase of the
world’s energy demand by over 30% within the last 10 years (bp.com, 2017). The oil and the
petroleum markets in all parts of the globe have responded swiftly in order to deal with the
change in demand. According to Hodgetts (2013), it is essential to have diverse range of fuels

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that needed to meet up with the growing demand within caused due to the innovative forms
of technology that are being introduced within the consumer market.
Issues in the Human resource management
Due to the poor level of sales and revenue within the organization, BP has to lower
the compensating level that is provided to the employees. The company also has been
criticized for not providing the proper values within the payroll of the senior workers. In the
recent times, as the company planned to incorporate the new and the short-term changes
within the operations. However, most of the old employees within the management have not
been able to deal with the changes. This is mainly due to the fact that the organization has not
been able to provide the training that is needed to incorporate changes for improving the sales
strategy. The company also has not been able to provide proper information to the employees
that could have helped them to deal with the changes. As the company has not been able to
maintain clarity, it is not possible to improve the level of coordination between the
employees.
In the year 1989, the company has initiated the plan for Sohio pension, which has the
policy for the cash balance for the retirement plan of the employees. Nevertheless, the main
cause of concern for the employees was that due to the initiation of this scheme, more than
half amount of retirement plan is being lost.
Issues in the Operational Management
The main issues with the operation department of BP is mainly due to the sustainably
factors. It is important to note that most of the sustainability issues within the business
operations of BP is mostly due to inability to deal with the changes within the business

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environment. Due to the existing operational issues within the organization, the company is
not able to improve upon the infrastructure that are needed to deal with the issues related to
product sustainability. Due to the implementation of new promotional strategies, it is not
possible for the company to improve on the investment planning that can result with the
issues related with that of the engaging in the social activities. It is also not possible to
maximize the social values that can help to improve upon the sales rates. The operational
department of the organization are not able to deal with the issues related to maintain
transparency.
1.3 Research Questions
Following are the research questions:
 What are the causes of decline in the sales of British Petroleum?
 What are the effects of sales decline that occurs due to low sales record of
British Petroleum?
 What are the intervention policies that can be adopted by British Petroleum to
deal with the issues of low level of sales?
1.4 Research Aim
The aim of the study is to identify the causes that are causing poor level of sales for British
Petroleum and identify following intervention measures.

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1.5 Research Objectives
 To identify the causes that have caused decline in the total volume of sales for British
Petroleum
 To identify the effects that are caused due to lower level of sales for British Petroleum
 To suggest intervention strategies that can be adopted by British Petroleum to deal
with the issues of low sales record
1.6 Structure of the Report
Chapter 1: Background information on the case study, research problem, aim and objectives
of the study is given within this chapter
Chapter 2: The following chapter highlights about the relevant existing literature related to
the subject of the research
Chapter 3: This chapter will highlight about the research methods and techniques that will
be used to collect relevant data and analyze the same for making up the conclusion of the
study
Chapter 4: In this chapter, the given the collected data will be interpreted to make
conclusion of the research
Chapter 5: The final chapter draws the suitable conclusion for the overall research and also
will provide proper recommendations.

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Chapter 2: Literature Review
2.1 Introduction
In the given chapter the investigators will make use of the existing literature that is
related to the oil and gas industry from all across the globe. The chapter will discuss about the
size of the industry along with that of growth rate. This will be followed by the analysis of
the competitive environment and other types of business situations. The analysis will help the
researcher to decide upon the plan for future research.
2.2 Analysis of the Petroleum Industry
The petroleum industry consists of all types of petrol, oil and gas products that are the
part of the fossil fuels. The activities including the exploration, extraction and refining of the
oil products are also included as a part of the activity of the petroleum industry. The
marketing and transportation of the petroleum products are also one of the major activities
that help to maintain smooth functioning of the global petroleum industry. Song et al. (2014),
have highlighted about the fact that petroleum also acts as the major source of fuel for all
types of chemical industry. The fuel oil and gasoline are the two main products that capture
the majority of the petroleum industry. The oil and the other petrol products account for 32%
of all energy that is consumed in Asia and Europe and 53% of the energy that has been
consumed in Middle East regions (O’Connor and Gronewold 2013). In the North America
and South America, it accounts for 41% and 40% respectively, while that of Africa it
accounts for almost 44% (Lopes and de Almeida 2015).

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The Human civilization has been using the petrol products for over 5000 years and
was initiated as a part of utilization as unrefined oil. In the later period of human civilization,
the petroleum product became an important part of the world economy. Along with coal, the
petroleum product became the biggest provider of energy for the industrial revolution in the
19th century. With the discovery of kerosene, the demand for crude oil increased
significantly because it can be used as a lightning and heating item.
The American Petroleum Institute, which is considered the world's largest trade
association for petroleum and natural gas products, has divided the overall petroleum industry
into 5 categories (Shuen et al. 2014).
In the upstream category, all the supermajor companies of oil and natural gas products
are included. These companies play an important role in deciding upon the trade and
marketing policies of oil and natural gas products from all over the globe. Most of the
upstream companies of oil and natural gas have the right to control the major reservoirs of
petroleum product. These companies also have the duty to search for potential underground
or underwater oil reservoirs. They also have the duty to collect important data from these
locations and explore the reservoirs for obtaining of the natural gas. According to Sueyoshi
and Wang (2014), the upstream industry of petroleum product has recorded the highest
number of merger and acquisition activities, which has ultimately, help to diversify the
petroleum industry. In the recent years, the upstream companies have shifted upon their
exploration for unconventional gas sources. This is believed to be one of the major steps that
has been initiated in order to deal with the energy crisis. It can also help to deal with the
problem of environmental degradation that has been caused due to excessive use of oil
products. The main operational activity of the upstream petroleum industry includes the
primary action for refining of petrol products. The upstream section is also sometimes known

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as exploration and production sector as they perform all the basic activities that are needed to
maintaining the supply and trade chain of petroleum products. The total asset value of the
upstream petroleum industry has been recorded at 135 billion dollars (Civan 2017).
The value chain concept is an important part of the upstream industry that decides
upon the supply chain of Petroleum products in all parts of the globe. The integrated oil and
gas companies are an important part of the upstream industry, which has their operation both
in upstream and downstream business of petroleum industry. The British petroleum along
with ExxonMobil and Chevron Texaco are few of the major companies included in this
category. There are also independent oil and Gas Company, which have their operation either
in upstream or downstream business of Petroleum products. There is also the category of oil
equipment manufacturer, which provide specialized machinery that are needed for extraction
of oil from refineries. The upstream companies also found partnership with security service
providers, which help them to deal with major security issues that are related to the petroleum
products. Overall, it can be said that nearly the operational department of upstream
Companies (Silva et al. 2014) controls 80% of the oil and natural gas industry.
There is also the category of mid-stream industry, whose operational activity includes
processing storing and transportation of oil and natural gas products. These companies play
an important role in linking up the populated cities from the areas of oil and natural gas
extraction. Hence, the midstream companies help to deal with the issues of geographical
location that is believed to be one of the major challenges for transporting Petroleum
products. Taylor et al. (2017), have added in this context that the transportation activities are
mainly carried out through pipeline, tanker ships and trucking fleets. It is also believed that
the level of risk involved in the midstream activities of the petroleum industry is quite lower
compared to that of the upstream and downstream sector. In some cases, the activities of the

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midstream sector may include refining of the natural gas and oil products, which are needed
to deal with the issues of environmental degradation. This can also help to reduce the burden
of the upstream sector in some geographical areas. Few of the major examples of midstream
Companies are Transneft, Enbridge, TransCanada and many more. Transneft is the only
company in the midstream sector, which are included in the category of top 25 oil and gas
firms in all over the globe. The company is currently having an asset of 12% of the overall
industry that is estimated to be a value of 55 billion dollars (Ambituuni et al. 2014).
The activities of the downstream sector of the petroleum industry include refining of
crude oil and natural gas. The operational activities include purification of the natural gas so
that it can be used for the commercial and domestic purpose. The marketing activities are also
an important part of the downstream sector, where the petroleum products are distributed
directly to the customers through outlets. The midstream and the downstream sector work in
collaboration in order to ensure that all the petroleum products are distributed equally in all
parts of the globe according to the local demand. It is also the duty of the downstream Sector
to gather vital information related consumer market of petroleum product. Hence, it is
possible for them to regulate the price of petroleum product depending upon the changes in
the supply chain management. All the local gas stations and petrol pumps are within the
control of the downstream sector. The efficiency of the midstream and upstream sector is
highly dependent upon the performance quality of the downstream sector as these companies
directly interact with the customer providing operational activities related to sales and
distribution. The important jobs within the downstream sector include hazard analysis, plant
operation, and maintenance activities (Jafarinejad 2016).

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2.3 Industry Size
The crude oil is believed to be the Prime source of energy supplier for the life of the
modern era. This is believed to be evident from the fact that the oil industry controls a major
portion of the world's economy. The industry produces and supplies 4 billion metric tons of
oil in an average year. One-third of the total oil that is being produced originated from the
Middle East regions. The United States and Saudi Arabia are believed to be the two main
producers of oil and natural gas products. Each of this nation is estimated to contribute nearly
13% of the overall oil and gas products. With 12% average production, Russia is regarded as
the third largest producer of oil (Halabi et al. 2015).
Due to its wide range of supply and demand the petroleum, industry is regarded as
one of the largest corporations within the worldwide sectors. Six out top 10 companies are
from the industry of Petroleum products that is calculated in terms of the total revenue. The
market value is determined to be the greatest in terms of the global economic values. Due to
the increased level of demand of the world’s energy, there has been steady rise in the total
amount of revenue that has been earned by the oil companies. As per the current report, with
one-fifth of consumption, US is regarded as the top consumer of the petroleum products. The
US is also the largest importer of oil products. Followed by the US, China is the second
largest consumer (Nielsen et al. 2013).
Under the current condition, 1.71 trillion barrels of oil can be extracted, which is
believed to help the future economic condition. The total volume of oil reserves all across the
globe is estimated to be 1,706.7 billion litres. Out of this, 47.7% belongs to the Middle East
region (Bachmann et al. 2014). With the revenue of 218,608 million dollars, the ExxonMobil
is believed to be the biggest company in the global petroleum industry.

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From the data of the market research, it is clear the estimated value of the total
revenue of the oil and gas products includes that of value of $5 trillion. This amount is of
including the different sectors of the industry that has been described in the above section.
The global domestic products of all the sectors related to that of the gas industry include
being that of $107 trillion. This helps the oil and the natural gas industry to occupy 6.5% of
the total revenue of the global economy (Aslani et al. 2014).
Goldemberg et al. (2014), have mentioned about the fact that most of the emerging
economic nations have increased upon their level of demand in the crude oil products. This is
one of the biggest contributors to the higher rates of demand for the oil and natural gas
products. The BRICS are the biggest contributors to the rise in the supply chain demand of
the petroleum products. Due to the exploration of the natural oil and gas products, the
industry size of the petroleum products has raised tremendously over the past many years.
Due to the nature of the oil and natural gas products, the operational and supply chain activity
of the industry is heavily dependent upon the expenditure of the human capital. Hence, it is
possible for the petroleum industry to provide huge amount of employment. This is also
believed to be one of the major ways that can help the petroleum products to contribute to the
social development.
2.4 Industry Growth
As mentioned in the previous section, the industry growth rate of the petroleum
industry is huge. This is mainly due to the fact that most of the energy consumption rate of
the world has increased tremendously over the past several decades. According to the
research work of Cheng et al. (2016), the growth rate of the oil and the gas industry has been
steady throughout the history of the human civilization. The growth rate of the overall
industry has been quite evident from the overall net income level of upstream and

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downstream sectors. From the report of Rajasekar (2017), over the past five years, the overall
growth rate in terms of the annual growth rate income has been 13.8% and the growth rate of
the overall revenue has been 26.6%. With the net requirement of the overall energy expected
to increase the growth rate of the industry is also likely to increase.
On the other hand, Lin and Xie (2015), have raised the concerns about the fact that the
sustainability of the industry is highly doubtful due to the fact that petroleum products are
non-renewable. Hence, it is important to deal with the issues of procuring the source of raw
materials that will ensure smooth function of the operations within the given sector. Song et
al. (2015), have suggested that it is essential for all the companies to improve upon their
dependency on the renewable sources of energy. This is believed to be one of the best ways
to deal with the issues of the energy crisis all over the globe.
The growth rate of the industry can be measured with the help of the SWOT analysis
tool. It is important to identify the opportunities within the petroleum industry. Hence, it will
be possible for the business firms to improve upon the sales rate. The major opportunity for
the petroleum firms is the innovation that has been implemented within the industry. On the
other hand, the major threats to the industry can be regarded as the expansion of the industry
of alternative energy. In order to properly identify the threats, the model of Porter’s five
force.
The tool of PESTLE analysis also has been applied that are needed to deal with the
external business environment. This is can help to deal with the issues that are encountered
by the industry. In this context, it can be said that most of the business organizations within
the petroleum industry, are not able to deal with the changes.
2.5 Major Players and Competitor analysis

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As mentioned in the earlier section, few of the major companies all over the world are within
the sectors of oil and natural gas industry. Most of the large-scale companies within the
sectors of oil and natural gas industry are located in the region of US and Saudi Arabia. The
largest companies in the industry have their activities within the domain of upstream and
downstream sector. Gazprom with the total revenue of $102.1 billion is believed to be the
largest company in terms of the revenue and market value within the Russian region. Petro
China with the revenue of $275 billion dollars is the largest in terms of the petroleum
industry of China (Hodgetts 2013). It is also regarded as the second largest oil manufacturing
oil company in all over the globe. In the region of United States, Exxom Mobil is believed to
be the largest with the net revenue amount of $270 billion (Binder et al. 2015). The British
Petroleum is the largest oil producer in the UK region, which have their operations both
within the sector of downstream and upstream. Saudi Aramco with the net asset value of
$455.5 billion is believed to be the biggest company within the given sector (Ambituuni et al.
2014).
These companies play a major role in deciding upon the market regulation of the
petroleum industry along with the consumer price. It can also be evident that the competitive
environment of the petroleum industry is decided upon by the policies implemented by the
large-scale business organization in a given sector.
Compare to another form of industry, the competition within the natural gas and
petroleum sector is different. This is due to the fact that petroleum exploration is dependent
upon the natural conditions. Most of the threats that are encountered within the petroleum
industry are due to the fact that there is a huge challenge in procurement of the natural
resources required for manufacturing the petroleum product. The competitive strategy of the
petroleum industry is dependent upon getting proper access to the extrapolation sites.

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According to Hoshdar et al. (2016), the quality of the petroleum products is one of the
major criteria in deciding upon the competitive advantage for petroleum firms. It is also
important to mention that with the rising popularity of non-conventional and renewable
sources of energy, most of the commercial and domestic activities are performed without any
form of assistance of the petroleum products (Chan et al. 2014). The industry also has to face
the threat of environmental degradation, which is caused due to huge amount of carbon
emission from the combustion of Petroleum products.
2.6 Situational Analysis
Due to the fast-changing nature of the oil and gas industry, it is important for the
business forms to analyses the situation and implements necessary changes to the operational
Management process. One of the major causes of concern for the oil and gas industry in the
recent time is due to the lowering of the price. It has been highly challenging to implement
Future Plans and strategies that will have the capability to predict the future changes. From
the case of British Petroleum, it is clear that in spite of the price recovery of the petroleum
and crude oil products, it may not be possible for the companies to deal with the financial loss
(Sueyoshi and Wang 2014).
As the oil, companies are exploring more potential areas for oil extraction, supply of
the petroleum products are increasing. However, in context of the current situation it may not
be possible for the regulator of Oil and Gas industry to properly balance the production rate
along with that of the rate of demand with the consumer market. The frequent changes in the
pricing of crude oil products are rebalancing the supply and demand chain. In order to deal
with the challenge of price fluctuations, most of the companies are exploring ways to reduce
the cost of production and workforce.

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Due to the increased amount of carbon production, in the recent situation, the
petroleum industry is also under the surveillance of environmental Commission in different
parts of the globe. As mentioned by Ammar (2014), it is highly essential for the petroleum
products to get properly refined. This will help in the current situation to minimize the effect
of excessive carbon emission due to the burning of crude oil products.
2.7 Proposed Plan of Analysis for each identified problems
One of the major issues that have been identified with the crude oil production
industry is because there is huge variation in the pricing of the petrol products. As per
mentioned by Kargari and Sanaeepur (2015), the fluctuation of the petroleum product is
mainly caused due to the irregularities in the supply chain dynamics. In order to deal with
this, issue it is important for the upstream sector of the petroleum industry to control the
initial flow of petroleum product in a global supply chain. It is necessary to ensure that there
are no excessive petroleum products that are being misused within the industry. There also
has been increased flow of surplus funds from unauthorized sector, which was resulting in the
increased inflow of the crude oil products.
For the companies in the UK and US region, it is necessary to control the operational
activities of the oil companies of Middle East. It is important to mention that the global
economy of the oil industry is highly dependent upon production rate of the Middle East
region. Hence, Castaneda et al. (2014), have suggested that most of the oil companies need to
collaborate with each other in order to decide upon a common policy for the Global
petroleum industry. This will help to maintain a coordination within the overall supply chain
sector of the petroleum product.

22CASE STUDY: BRITISH PETROLEUM
Another major issue related to the oil and natural gas industry is because there is
increased in concern related to the excessive amount of carbon product and pollutants that are
emitted into the environment due burning of the natural gas and petroleum products. Fisher
(2015), has mentioned about the importance of refining the natural gas and oil products. This
need to be an integrated part of the environmental management for oil and gas industry. It is
also important to spread the awareness related to environmental issues that are caused due to
excessive production of crude oil products. The United Nations and Oil Companies in all
parts of a globe base the guidelines of environmental management for petroleum industry
upon the collective research work that has been conducted. The Organization of the
Petroleum Exporting Countries (OPEC) is also one of the major contributors for deciding up
on the environment and sustainable development policies for oil and gas industry. Excessive
extraction of oil needs to be prevented in order to ensure that there is no misuse of the
petroleum products. This can effect on the overall growth rate of the economy of the oil and
natural gas industry (Haavik 2017).
2.8 Chapter Summary
The section of the literature review has discussed about the current situation related to
the industry of oil and natural gas products. It is also important to mention about the fact that
the overall structure of the industry is dependent on the overall operational activities that are
performed within the sector. The literature has also discussed about the current situation and
the issues that are encountered by the oil and petroleum industry. The major issues that are
encountered within the department are due to the fluctuation in the pricing level. This issue
mainly occurs due to the irregularities in a supply chain management on the petroleum
product. Hence, it is important for the natural gas and petroleum industry to control the
pricing of the respective product and ensure that environmental policies are being followed.

23CASE STUDY: BRITISH PETROLEUM
This can help to deal with the issue of sustainability that is also one of the major concern due
to the excessive consumption of Petroleum products.
The major gap that exists within the existing literature is due to the fact that it has not
discussed in details about the intervention measures that can be adopted by the petroleum
industry in order to deal with the pricing issues. It also has not discussed about the
competitive advantage policies that can be implemented by large-scale petroleum companies
in order to ensure proper supply chain is being maintained in all parts of the globe.
Chapter 3: Research Methodology
3.0 Introduction
In the research methodology chapter, the researcher tries to design a suitable structure
for the research, which will be followed while carrying the research effectively. For this
purpose, the researcher collects information from various theoretical underpinnings and
conceptual models that are discussed in previous chapter. Proper selection of the
methodology of the research helps the learner in solving the research problems, which have
been raised during the course of the study such that the desired objectives based on the
expected results can be obtained.
3.1 Research Outline
The outline of the research bestows the primary framework of the research upon
which the entire research methodology can be formed. For the research purpose, based on the
research topic, the researcher has taken into consideration the positivism research philosophy

24CASE STUDY: BRITISH PETROLEUM
with a deductive research approach and a descriptive style research design. Data has been
stringently collected via availing secondary research method in order to analyze the factors,
which are responsible for the decline of the sales of the British Petroleum. The ethics of the
research including research validity, reliability have been strictly taken into consideration
during the time of conducting the research.
3.2 Research Onion
Figure 3.1: Research Onion
(Source: Saunders et al. 2009)
It is extremely important to abide by all the layers of the research onion in order to
make sure that a suitable path has been cited to solve all the research problems in an efficient
way. In this dissertation, proper emphasis has been given to the inclusion and adoption of the
appropriate research approach along with design. Here the design follows a specific research
philosophy along with other data collection and sampling methods that are suitable to guide
the research towards the desired or hypothesized direction. The different layers of the

25CASE STUDY: BRITISH PETROLEUM
research onion denote different steps of the research that are extremely important to conduct
the study. However, Bryman and Bell in the year 2011 have criticized the concept behind the
research onion. According to them, the layers of the onion are not arranged in an organized
manner. The process of data collection and analysis, which are entitled as the inner most
layers of the research onion are not arranged in an ordered manner. Bryman and Bell are of
the opinion that, data collection along with analysis of the data should have been situated at
the outer most layer of the research onion as they are the preliminary steps which are required
to be undertaken to conduct or to initiate the research. In spite of such strong criticism, the
research onion that has been skilfully developed by the Saunders and his group of research
team is considered extremely helpful towards the process of logical flow of the research
procedures. The basic idea is; each step of the research is unfolded via pilling of each
consecutive layer of the research onion in a chronological manner.
3.3 Research Paradigm
3.3.1 Research Philosophy
There are two different types of research philosophy namely research philosophy of
positivism and research philosophy of interpretivism. Research positivism deals with the
proper examination of the research problems in accordance with the real facts, findings or the
established truth which are already available or recently elucidated. The research philosophy
of interpretivism is somewhat different from the research philosophy of positivism. The
theory of interpretivism deals with the perception that people nurture over a particular topic
or subject under a particular situation (Bernard 2011). The theory of positivism is important
toidentify the problem via logical analysis of the collected data. The research problems are
evaluated via the help of the facts and evidence. On contrary interpretivism, only deals with
the business activities and management. The selected research philosophy helped the

26CASE STUDY: BRITISH PETROLEUM
researcher to analyse the present scenario of the market which in turn will provide a boarder
perspective to the overall research procedure (Lancaster 2012).
Figure 3.2: Research Paradigm
(Source: Harrison and Reilly 2011)
3.3.1.1 Justification of choosing positivism research philosophy
After taking a detailed insight of both the types of research paradigm, the researcher
has opted for the research philosophy of positivism. The research philosophy is capable to
making a logical investigation along with critical analysis of the research topic based on the
evidences and facts, which are collected by the learner. According to the opinion of the
Cooper and Schindler in the year 2010 interpretivism emphasize on the application o the
observation of the researcher in order to examine the research problems. On the other hand,
positivism deals with the proper analysis of the research problems under the citation of the
authenticated facts. Therefore, the theory of interpretivism here is considered to be
insufficient to analysis the factors, which are responsible behind the decline of the sales of the
British Petroleum.
Research
Philosophy
Philosophy of
Interpretivis
m
Philosophy of
Positivism

27CASE STUDY: BRITISH PETROLEUM
3.3.2 Research approach
Two main kind of research approaches that are undertaken during the research is the
deductive and inductive approach. According to Crouch and Pearce (2012), the deductive
approach in research is undertaken when there are many dissertations. This is due to the fact
that the deductive research approach put emphasis of the obtaining core knowledge. The
process of deductive research approach employs top-bottom approach which enables the
researcher to generate a research hypothesis after detailed analysis of the literature review
thereby generating genuine information to authenticate whether the pre-existing theories are
valid or not. In comparison to the deductive approach, the inductive approach is somewhat
advantageous researchers who strive to generate new theories, which are relevant with the
framed research topic. This kind of research approach helps in the research explorations of
the data at an initial stage of the research in order to obtain the required information to create
a completely new theory.
3.3.2.1 Justification behind choosing deductive research approach
After undergoing a thorough analysis of the both the research approach, the researcher
has opted for deductive research approach. Deductive research approach helps in the
deduction of the data from the pre-existing concepts, theories and figures on the sales value
of the British Petroleum. This is a very little scope for the research to generate new models or
approach to analysis the factors, which are responsible for the decline in the sales value of the
British Petroleum. Thus, inductive approach, which is majorly used for designing new
theories, is not relevant for this particular research model.
3.3.3 Research Design
There are three different types of research design and these are exploratory,
explanatory and descriptive. Research design is used for conducting an academic or social

28CASE STUDY: BRITISH PETROLEUM
research. Based on the aim of the research and research objectives, the research design is
selected. In the exploratory method, the psychological aspects of the research are taken in
consideration. In explanatory research method, the researcher explain the elucidated data
without even analysis the negative and the positive outcomes. Both explanatory and
exploratory research design are used only when the researcher does not generate any formal
set of research objectives or questions and does not has significant knowledge about the topic
of the research. As opined by VanderStoep in the year 2009, descriptive style research design
is extremely beneficial for those research those have a definite set of objectives and a set of
research questions. Moreover, in descriptive type research design both the positive along with
the negative perspectives are taken into consideration and are simultaneously represented in
the form of detailed report.
3.3.3.1 Justification of choosing descriptive research design
In this research, the researcher has taken descriptive style research design. This is due
the fact that this research has a definite set of aims and objectives. The importance of the
descriptive style research design is, it is appropriate for the structured and formal research
and provides significant scope for an enriched analysis such that the researcher can
accumulate authentic information for the purpose of the study undertaken in the research.
One of the major limitations, which is faced by the researcher is time. Time here is a
constraint and thus the researcher has conducted a cross-sectional survey that has been aptly
supported by the descriptive style research design and has effectively managed the time
constraint. However, the descriptive style research design has one advantage. Descriptive
type research design enables the researcher to get an in-dept analysis of the data for a huge
population of focus group and that too under very short span of time.

29CASE STUDY: BRITISH PETROLEUM
3.4 Sampling method
There are two different types of sampling methods and these are probability and non-
probability sampling. In probability sampling, research selects the respondents of the focus
group in a random manner. However, it should be taken into account that the entire target
population has been properly represented by the selected sample. In case of non-probability
sampling method, instead of going for random sample selection, purposive selection bias is
employed for the purpose of the selection of the sample.
For this particular research, the researcher employs a combination of both probability
and non-probability sampling in order to generate research data. The sample size of the
research work is from the secondary data. Relevant articles about the research work of
petroleum industry have been chosen by the researchers. Information has also been collected
from the business report and financial data of the company. The articles are being chosen on
the random basis.
3.5 Research Strategy
Based on the purpose of the research, the researcher selects the suitable research
strategy. Some of the popular research strategies, which are available for the research work,
are surveys, interview, case studies and experiments. Experiments are mostly employed in
case of the scientific research like biological research. Experiments are used to provide new
theories and models. These theories and models are important in relation to the research
topic. They also help in proving the validity and the reliability of the previous researchers.
Case studies, on the other hand, provide the basis of secondary knowledge to the researcher
(Brannen 2009).

30CASE STUDY: BRITISH PETROLEUM
3.5.1 Justification for selection of research strategy
After strictly examining all the research strategies, the researcher has selected mixed
methodology as the main format of research. With the help of the survey procedure,
researcher was successful in gathering extensive yet original data.
3.6 Data collection methods
The researcher has collected data via using mixed methods of research. The mixed
method of research includes primary and secondary methods. The term "mixed methods"
defined a research methodology that advances the mode of the systematic integration or
mixing of the both quantitative and qualitative data within the sustained program of inquiry
or within the single investigation. The basic layout of this methodology is that the integration
of data allows a comprehensive and synergistic use of the data in comparison when done in a
separate manner like separate quantitative and qualitative data analysis. The concept of mixed
methods evolved in the context of social sciences and lately, it is expanded in the area of
business areas. Towards the end of the last decade, the procedures of the mixed methods of
the data collection and analysis were refined in order to encompass a wide variety of research
question (Creswell and Plano Clark, 2011). The refinement procedures include offering
alternative mixed methods designs, advancing rigour, specifying a shorthand notation system
for explaining the overall design in order to uplift effective communication across different
fields. The refinement procedures also include visualizing procedures via the help of
diagrams, proper noting down of the research questions and generating rationales for
conducting various forms of the mixed method study.

31CASE STUDY: BRITISH PETROLEUM
3.6.1 Primary research
In primary research data are obtained from those people who already have an
understanding of the chosen topic and thus help in assisting primary research data. For the
current research work, no primary data are used in the forms of survey.
3.6.1.1 Quantitative Data Collection Method
The process of quantitative data collection method helps in generating numeric data.
This numeric data can be easily represented in the form of tables, charts and graphs. The
quantitative data collection method helps the researcher in accumulating data from a large
amount of population and that too in a cost efficient and time effective manner. Another
advantage of quantitative data collection method is, this type of data collection method is
authentic and can be easily proved as it is subject to testing (Gummerson 2010).
3.6.1.2 Qualitative Data Collection Method
Qualitative data collection method deals with enriched amount of data, which are
recorded on the basis of personal experiences and perceptions. For this study, the researcher
has performed the strategic analysis of the business of the British Petroleum based on the
relevant business model. Under the strategic analysis, the researcher has analysed based on
the political, social and economic background of UK. The research has also highlighted the
technical factors and legal issues.
3.7Accessibility issues
The major issues about the accessibility are due to the fact that it was not possible for
the researchers to get the detail classified information about the company. Moreover, since
British Petroleum is a huge brand name with a decade old existence it became at times
difficult for the researcher to fetch authentic, reliable and updated data. Moreover, the SWOT
analysis performed by the searcher also faced certain accessibility issues like the researcher

32CASE STUDY: BRITISH PETROLEUM
failed to access all the relevant data of the competitors of the British Petroleum as there were
certain ethical complications. Moreover, while finding the exact customer trend, it became
difficult for the researcher to fetch exact data as majority of the business papers lacked the
online access.
3.8 Ethical consideration
At the time of carrying out the research, it is always necessary to abide by the certain
ethical considerations. Moreover, the researcher has also made sure that the data, which are
obtained for this research, are never cited or used in any other research.
3.9 Data analysis
With the objective of evaluating the quantitative data, the researcher has calculated
the numerical digits via transforming them into percentages. Another numerical form of data
is represented in the form of charts, graphs and tables. This wide representation of the data
made the overall layout of the researcher easy to understand and more convenient for the
reader.

33CASE STUDY: BRITISH PETROLEUM
Chapter 4: Data Analysis
4.1 Introduction
The purpose of this chapter is to analyse the collected data that has been gathered
from the secondary sources. Most of the data will be collected from the journal articles
related to the research work of petroleum industry. The researcher has also focused upon
information that is obtained from the case study of British Petroleum. Strategic analysis will
be done based on the business model that are utilised in the petroleum industry. The value
chain product along with that of SWOT analysis tool will be used to properly evaluate the
existing condition of British Petroleum. It is also important to analyse the information of the
competitive environment, which is needed to deal with the current issues that are being
encountered by the management of British Petroleum. Strategy analysis will be done in order
to propose relevant solution to the management of the British petroleum and help them to
deal with the issue of poor record of sales. Hence, it will be possible to identify the factors
behind declining sales of British Petroleum.
4.2 Strategic analysis using relevant Business models
It can be said that the use of relevant business model can be used in the case of British
Petroleum in order to identify their areas of weakness. This will help to deal with the causes
of poor level of sales and also have the company to suggest proper intervention measures.
The analysis is done from the secondary data that are collected from relevant sources.
Analysis is also done using properly that make use of the business models.
From the sources that have been included in analysis section, it is clear that the
analysis tool of pestle can be used to deal with major issues related to the external business

34CASE STUDY: BRITISH PETROLEUM
environment. It is also important to mention that location of British Petroleum has a huge
effect on the business operations that are being carried out by the company. The changes in
the political and economic environment along with that of the social environment has a huge
impact on the sales record and business operations of the company.
The political factors that affect the oil industry are due to the trading policies and
intercountry relationship. These policies can affect the overall business operations and the
trading unit of global petroleum supply chain. It is clear from the collected evidence that the
Global energy market is changing rapidly due to the change in the demand rate of Petroleum
products. The variation in the geopolitical scenario has also tremendously affected the
operation of the petroleum industry. The fast-moving improvement rate of the China
economy also had a huge impact on the Global political environment. Nevertheless, the
stability of the UK Government is one of the major advantage points For the British
Petroleum. The UK government has been able to maintain an effective relationship status
with all the major Global oil Powers. This includes the business partnership with the Middle
East region of Saudi Arabia and Iran. Nevertheless, due to the incidence of Gulf region, the
political scenario of the British Petroleum was highly compromised. Government policy of
UK related to the petroleum product is also changing rapidly. The decision of the UK
Government to increase the import tax up on petroleum product by 3% in the recent time has
a huge impact upon the operational cost of British Petroleum. After the election of the
conservative government, the petroleum revenue tax was increased to 50% which had a major
impact upon the overall corporate tax that is paid by the company. Hence, it is evident that
policies implemented by the UK Government in the recent years had a major impact on the
operational and financial cost expenditure of British Petroleum. The political factors of the
UK environment also had a major impact upon the energy policy that is implemented all over

35CASE STUDY: BRITISH PETROLEUM
the globe. This is evident from the fact that in the recent times the UK Government have on
several occasions intervened with the marketing policies of the petroleum industry of UK
region. The tax imposed upon by the government had direct impact upon the consumer price
of the petroleum product that is being decided by British Petroleum.
The performance of the petroleum industry has a huge impact upon the global
economy along with that of the economic condition of UK. It is important to mention that
from the evidence collected it is clear that the operation of the British Petroleum has a huge
impact upon the economic condition of many nations. This is due to the fact that the officials
within the British petroleum played an important part in deciding upon the Global Oil price
and the fluctuation of the price that occurred due to changes in the production rates. The
economic policies implemented by the UK Government in the recent past year have helped
the growth of alternative sources of energy. This energy that includes solar power and uses of
biofuel has become highly popular within the people of UK. From the collected evidence it is
clear that this is one of the major causes of poor sales record witnessed by the British
Petroleum. It is also important to mention about the fact that in the recent times there has
been a great impact on the economy of the oil industry due to the fact that companies have to
spend huge amount of revenue in the search of new refineries. The world economic condition
in the context of the petroleum industry is highly controlled by the manufacturing rate of the
Middle East regions. The economic factor also has a high impact upon the overall supply
chain process of the petroleum industry. From the collected information by the researcher it is
clear that due to the uneven distribution balance of the petroleum product, the upstream
company is like the British Petroleum has to compromise upon their business performance
level. This is mainly due to the fact that the operational cost of the British petroleum
company has increased and they have also compromised upon their business reputation level

36CASE STUDY: BRITISH PETROLEUM
within the customers. The variation of the American dollar value also had a huge impact upon
the operational cost of British Petroleum. This is mainly due to the fact that the company is
currently not able to collect proper revenue from the export of the petroleum product, which
is believed to be one of the major sources of income for the British petroleum company.
The social background condition of the British Petroleum also had a major impact
upon the total volume of sales. The gathered evidence of the researchers suggests that in the
past few years, the viewpoint of the world about the use of petroleum product has changed
tremendously. This is mainly due to the fact that the awareness campaign related to the
excessive use of petroleum product and its effect on the environment had a major impact
upon the decision making activity of the consumers. It is also relevant to mention in the
context that due to the accident in the Gulf region, the British petroleum has compromised
upon their reputation in maintaining social and environmental values. Nevertheless, many of
the awareness campaigns that have been initiated by the British Petroleum and a major
impact upon the corporate social value of the company. In the social program, the
management has been able to afford the society about the sustainability measures that are
being implemented within the extraction process of petroleum product. The latest data
collected also suggest that the social factors within the oil and petroleum industry have
changed tremendously due to the variation in the democracy, income level of the people
along with the cultural values of the local people in UK. Nevertheless, one of the major
contributions of the British petroleum within the society of the UK is due to the fact that it
has been able to provide huge source of employment. Due to the increasing demand for
petroleum product in the past many years the company was able to expand they are
operational performance in many regions. Hence, it was possible for them to provide job
opportunities at various operational positions. The company has also taken important

37CASE STUDY: BRITISH PETROLEUM
initiative in order to spread the awareness about misuse of petroleum product. This can help
in the process of both sustainable development and prevent the excessive carbon emission
within the environment.
From the collected evidence, it is clear that the technological factors had huge impact
on the operational activities of British Petroleum Company. One of the major issues that have
affected the company in the recent past years is due to the fact that the company has not been
able to adopt the latest technology and machinery that are implemented worldwide in the
process of Petroleum extraction. This is believed to be one of the major cause of competitive
disadvantage that resulted in world level of sales growth. The company has also technological
issues in the department of supply chain management. This is mainly due to the fact that the
poor technological infrastructure was not enough to provide necessary information that was
needed in the smooth functioning process of trade business. It is clear from the past evidence
that the use of Technology has helped in the process of extrapolation and refining of
petroleum product in all parts of the globe. There is also the application of using oil and gas
pipeline in order to properly distribute the product in long distances. There is also a huge
impact on the technology in providing proper protection and safety to the workers, who are
involved in the operational activities of the petrochemical industry. Hence, with the help of
Technology, it is possible to reduce the chance of risks that are involved in the core activities
of Petroleum manufacturing unit. Use of latest machinery can also help in the process of
properly refining the petroleum products. On the other hand, the impact of technology is also
helping the other forms of energy to improve upon their operations. This is believed to be one
of the major threat for business performance of the petroleum industry.
It is highly evident from the collected fact that environmental factor is one of the
major causes of concern for all petroleum industries and product. Due to the Geographic

38CASE STUDY: BRITISH PETROLEUM
position of most of the oil reserves of British petroleum, they had to compromise upon the
local environment in order to carry out the activity of oil extraction and refining. It is also
evident that due to the poor use of Technology, most of the all product of British petroleum is
not being refined properly. Therefore, there is a huge risk of increasing the total volume of
environmental pollutants that are there emitted. This poor quality of petroleum product that is
being provided by the company has been one of the major causes of concern and thereby
compromised upon their business reputation and social values. It is also important to mention
about the UK environment management law that has been implemented in order to deal with
the excessive emission of carbon due to the burning of fossil fuels. According to this new
law, it is highly essential for all the companies to properly define the petroleum product in
order to minimise the effect of harmful pollutants that include lead, Sulphur and nitrogen.
From the collected data it is clear that in the recent time majority of the oil products that are
being sold by the British petroleum has not been able to manage the permission level that has
been implemented by the environment management law.
The formation of new legal laws related to the petroleum operation has a major
impact on the operational activities of British Petroleum. The European Union, American
Union, and the union of Middle East region mainly decide the international laws related to
the supply chain of the petroleum product. The National Oil Corporation, along with OPEC
country is also usually contributing upon the pricing strategies that will be implemented in
the distribution of petroleum product. The legal factor also has a major impact on the
exploration and refining process that is believed to be one of the major parts of the
operational activities of upstream sector of the petroleum industry. From the collected data, it
is evident that most of the policies implemented by the British Petroleum has not been able to
follow the international laws related to import and export of the oil products. The expansion

39CASE STUDY: BRITISH PETROLEUM
of the British Petroleum in the total number of oilfields and refineries have not been able to
follow the legal protocol that has been implemented by the European Union and UK
Government. Hence, it was evident that most of the parts of newly expanded operational
activities of British petroleum have not been able to provide the revenue that was expected.
The Swot analysis has also been one of the major causes of the tool that have been
used by the researcher in order to properly evaluate the strength weakness and external
threats that are being faced by British Petroleum. By proper valuation of internal business
environment, it is possible to properly identify the changes that have been occurring within
the business.
From the collected past evidence it is clear that the major strength of the British
petroleum company is due to the fact that day has been one of the major contributors in
deciding upon the policies of the Global petroleum industry. The high level of strong
operational performance of the company is believed to be mainly responsible for their huge
impact upon the overall petroleum industry in the UK region. The company also has its
presence in all parts of the globe, which is believed to be one of the major competitive
advantages. This has also contributed due to the fact that the company has its operational
department extended in various geographical location. The company is also believed to be
one of the major contributors to the Global demand for energy supply. It is also possible for
them to improve upon their reputation in regions outside Europe. This was mainly possible
due to efforts in the process of dealing with international trade.
On the other hand, the major weakness of the company is due to the recent accident of
oil spill that occurs in the Gulf of Mexico region. Environmental hazards that have been
caused due to the accident has compromised upon the social reputation of the company. It is
also evident from the fact that most of the oil refineries of British Petroleum have not been

40CASE STUDY: BRITISH PETROLEUM
able to produce enough amount that is needed to meet the demand of the petroleum supply
chain. There is also evidence about the fact that the company has reached its maturity stage,
where it is not possible for the management to implement innovative style of business
operations. From the information collected about the pricing strategies of the petroleum
industry is also evident that the drop in oil cost within the consumer market also has a major
impact on the total revenue of the British Petroleum.
The increase in oil prices believed to be one of the major opportunity for British
Petroleum, which can help them to recover the loss of revenue that is caused due to dropping
of oil prices. In the recent years, there is also an increase in the production rate of natural gas,
which has resulted in ability of the market to resolve most of the issues related to supply
chain. As more oil reserves have been discovered, there is an increase in the production rate.
With more amount of production, it is possible for the British petroleum to expand their
export business and make further investment in new regions. It is also relevant to mention
from the collected information that due to the increase in awareness level about using of
alternative source of energy, there is a huge opportunity for British petroleum to invest in the
new form of business. The company, therefore, have the opportunity to enter into new sector
of business within the energy industry.
The major threats that are obtained for the British petroleum are due to the frequent
change of government regulations and pricing of petroleum product in the Global market.
There is also high level of competition from the companies in US and Middle East region. In
spite of the fact that the management of British petroleum plays an important part in deciding
upon the pricing of natural gas and oil product in the Global market, there is an increase in
risk of the global market being seized by the superpowers of United States and Middle East
region. Due to the implementation of environmental regulation, there is also the risk of

41CASE STUDY: BRITISH PETROLEUM
improving the quality of the natural gas and petroleum product. The company therefore have
to spend extra amount in order to refine the petroleum product before they are being sold to
the consumer market.
In order to properly analyse the threats that British petroleum has to deal with from
external sources, the researchers have implemented the tool of Porter's five force. This will
help them to identify all the major sources of external threats that have been responsible for
poor record of sales. The necessary information related to the porters five forces have been
identified from the stakeholder analysis.
The threat of substitute product of oil and natural gas is highly prominent in the
current days. With the increase in the market value of solar energy and wind power, more
number of people are depending upon the renewable sources of energy in order to deal with
the problem of energy crisis.
There is also the threat of new entrants, which is occurring due to the start-up
business that is investigating in the alternative source of energy. On the other hand, the major
thread that the British petroleum has to deal with is due to the intense level of competition
from the existing petroleum companies. In a global market there is a tough level of
competition of British petroleum that is associated with the large-scale companies in the US
and Middle East region. The Exxon Mobil is one of the major competitors of British
Petroleum in the Global market.
The suppliers in the petroleum industry have a huge demand. This is mainly due to
the fact that the entire operational process of the British petroleum is dependent upon the
suppliers functioning. The bargaining power of the supplier is generally high within the
sector of petroleum industry. This is mainly due to the fact that most of the countries in the

42CASE STUDY: BRITISH PETROLEUM
Middle East region have the major control over the functioning of suppliers. The British
petroleum has to face the threat of low production rate from the supplier, which has caused in
the loss of market share of the company.
Bargaining power of the customer of the buyer is quite low within the petroleum
industry. This is mainly due to the fact that most of the customers do not have the choice to
switch over to alternative form of energy. This is evident from the fact that oil and petroleum
products are still considered to be the main source of energy supply in the global market.
The value chain model is used by business organization in order to modify the
product or service according to the demand of the customer. Every company aims to achieve
importance of value chain by providing high quality product or service to the customer in
order to gain maximum value of customer satisfaction. Value chain is an important part of all
business model. This is to ensure that the service quality the company is made according to
the needs of the customer.
The downstream segment of British Petroleum is mainly aimed to deal with most of
the issues within the operational section of the business. The business of the company is
determined by the values chain service integrated with that of the local distributors. From the
report of the company, it is clear that British petroleum distributes its product in more than
17000 retail stores all around the globe. The expansion of the value chain is spread all over
50 Nations. This highly advanced level of value chain helps to offer advanced level of
business opportunity. The company can use the same opportunity with the help of business
strength and their capability to overcome the challenges of the petroleum industry.
The report information of the company suggests that use of advanced level of
Technology is also an essential part of the value chain that is being implemented to provide

43CASE STUDY: BRITISH PETROLEUM
high production value to the customers. The main purpose of the operational activity is
establishing effective relationship with the government and every group of stakeholders. The
fuel strategy of the company mainly focuses upon value chain of distribution of the products.
The company is, therefore, expanding their value on business portfolio and capture a strong
position within the market. The value of the distribution chain of the company is expanded in
positions, where it is possible for the company to gain significant competitive advantage.
Application of innovative technology is believed to be one of the effective ways that helps
the company to develop upon its supply value chain. The company also aims in the
development of the extensive relationship development with the customers.
It is also important to mention about the fact that the brand reputation of the company
is determined with the help of effective and efficient value chain. This is also one of the
effective ways that can the company to implement the effective ways to improve upon the
value chain service. The profit level of the company can also be determined with the help of
effectiveness within the value
4.3 Findings from the Analysis
From the above finding section, it is clear that one of the major causes of low level of
sales of British petroleum is due to various external factors that are caused due to the change
in the government and economic policies. From the secondary data sources, it is also clear
that security issues are also one of the major concern for gathering of raw materials that are
needed for smooth functioning of supply chain within the petroleum industry.
The researchers have implicated various business model in order to properly evaluate the
existing condition of the British Petroleum. The changing political scenario within the UK

44CASE STUDY: BRITISH PETROLEUM
environment has been one of the major concern. This is mainly due to the fact that the
company is not able to properly control the pricing strategies that are being implemented. The
change in the global economy of the petroleum industry has also hugely affected business
operation of British Petroleum. This is mainly due to the occurring of the economic and
financial crisis. Excessive production of oil is also believed to be one of the major cause of
lowering of Price value of petroleum product.
From the analysis of external threats, it is clear that the replacement of Petroleum with
renewable sources of energy is not a major cause of concern. This is mainly due to the fact
that 70% of the Global energy production is still dependent upon crude oil and fossil fuel. It
is also important to mention about the increase estimation of cost that is required in the
maintenance of using alternative source of energy. From the collected data it is clear that use
of solar vehicles or biofuel can increase the cost of energy consumption by about 25% for
each domestic or commercial purpose. It is also relevant to mention about the fact that the
company also has to deal with the concern of bargaining power of the suppliers. The recent
years the company has lost Major control over the oil refineries due to the accident of oil spill
in the Gulf of Mexico region. Nevertheless, it is evident from the collected information that
the British petroleum has a wide range of supplier source. On the other hand, it is also evident
that the threat from the bargaining power of buyer is quite low. This is mainly due to the fact
that most of the company products currently do not have a reliable source of alternative.
The collected information also suggests that 85% of the energy consumption in the UK
region is still dependent upon consumption of fossil fuel and crude oil products. The British
petroleum still captures nearly 65% of the petroleum industry in the UK region and other
parts of Europe. The market share value of the British petroleum has dropped to 35% in the

45CASE STUDY: BRITISH PETROLEUM
last 5 years due to the lower rate of production. The change of the price of crude oil product
in the international market is also believed to be one of the major cause of concern.
4.4 Proposed Solution for the Management
It is important for the management of British petroleum to properly analyse and
collect information about the petroleum industry and the Global Oil market. The intervention
strategies need to be implemented depending upon the future prediction that is being
implemented. In order to restore the control over the Global petroleum industry, it is essential
for the British petroleum to follow the rules of national Oil Corporation and that of the OPEC
nations. This will help to deal with most of the issues related to environmental degradation
that is caused due to excessive use of Petroleum products. It is also essential for the
management to improve upon their refining and manufacturing unit, which will help to
ensure that minimum amount of harmful products are being generated within the atmosphere.
4.5 Selection of strategies for Success
The major aim of the strategy of the British petroleum will be to focus upon the future
need of the energy industry and also deal with high level of efficiency that is needed to meet
up the energy demand. The basic strategy of the British petroleum needs to focus on
developing the technological infrastructure that is needed in the activity of oil extraction and
processing. This is believed to be one of the major strategies that can help to deal with the
environmental issues.
The company also need to focus up on this Chatterjee in the supply chain
management, which is aimed to cover 75% of the global trade market for file product. It will
also aim to maximize the recovery that is caused due to the loss of lowering of Petroleum
prices. Optimisation of the portfolio by making investment in diverse sector of energy can

46CASE STUDY: BRITISH PETROLEUM
also be a strategy for the future benefit. This is believed to help in the long run cash flow of
the company and also ensure sustainability for the future generations. The company also need
to focus up on the corporate social responsibilities, which can also be achieved by following
the environmental regulations that are implemented by the National Oil Corporation.

47CASE STUDY: BRITISH PETROLEUM
Chapter 5: Conclusion and Recommendations
5.1 Introduction
This is the final chapter of the entire research project, where the investigator will draw the
final conclusion and highlight upon the causes of poor record of sales of British Petroleum.
This chapter will also highlight upon the action plan that needs to be implemented by the
British petroleum in order to properly recover from the loss that is caused due to lowering of
sales. Proper recommendations will also be given from the finding section. This will help to
deal with the issues of low revenue that is earned by the company.
5.2 Conclusion Review that is drawn from the objective of the research
Research question 1: What are the causes of decline in the sales of British Petroleum?
From the section of findings and literature review, it is clear that the Global Oil industry has
changed rapidly within the past few years. This has a major impact upon the pricing strategies
that are being implemented by the Oil Companies in different parts of the globe. It is also
evident from the collected data that, there are several reports of illegal mining activities,
which has a great impact upon the overall petroleum Global industry and trade business. The
British petroleum has not been able to control the overall change that is occurring within the
petroleum industry. There also has been major concern about the environmental degradation
that is occurring due to the mining and refining activities carried out by the British petroleum
in various parts of the globe. The overall reputation of the company has tremendously been
affected due to the accident in the Gulf of Mexico region. Moreover, significant amount of
people are attempting to depend upon renewable sources of energy in order to ensure that

48CASE STUDY: BRITISH PETROLEUM
minimum amount of harm is done to the environment and it is possible to maintain
sustainability in the overall energy industry. These are believed to be the few major causes
for decline in the overall sales volume of British Petroleum. It is also important to mention
that the company has not been able to maintain the sales due to the top level of competition
from major Global Oil Companies mostly in the US and Middle East region.
Research Question 2: What are the effects of sales decline that occurs due to low sales
record of British Petroleum?
From the section of literature review, it is clear that due to the lower level of sales in
the British Petroleum has suffered tremendously due to the fluctuation of Petroleum prices in
the Global market. In spite of the fact that in the modern day huge demand of the energy
supply has caused to rise and growth of the petroleum industry, the British petroleum has not
been able to make use of this opportunity. The company also has not been able to follow the
environmental protocols that are being implemented by the National Oil Corporation. Hence,
the management has to face the risk of losing social reputation and thereby the brand value of
the company is compromised.
Research Question 3: What are the intervention policies that can be adopted by British
Petroleum to deal with the issues of low level of sales?
Proper recommendations are being provided in the following section that will be
implemented by the British petroleum in the form of action plan. This will help them to deal
with the major issues related to environmental concerns. This will help to ensure that the
British Petroleum will be able to deal with the issues of poor level of sales.

49CASE STUDY: BRITISH PETROLEUM
5.3 Action Plan and Recommendations
The action plan of the British petroleum needs to focus upon the need of the
community and implement Strategies for the benefit of the stakeholders. Future sustainable
development policies need to be implemented according to the action plan. This plan will
have to ensure that the resources are being properly utilised. The management of the
company needs to work in collaboration with the stakeholder group and ensure that proper
strategies are being taken to safeguard the interest of every group. It is also important to focus
upon the action plan of cultural diversity within the workplace of the company. This will help
in the process of improving upon the company's reputation in the Global scale. The
management also needs to incorporate the policy of cultural awareness among every
employees, which is believed to improve upon the workplace environment of the company.
The company also need to implement a special action plan for recruitment of employees. This
is also believed to be one of the major social responsibility of the company due to the fact
that it is one of the major sources of employment for all business organisation.
The action can also need to focus up on improving the diversity of the supplier group.
The company their phone need to develop business partnership with major oil supplier at the
Global scale, which is believed to help in procurement of the natural resources that are
required for effective functioning of the supply chain. The company can also implement the
action plan for developing partnership with stakeholders. This can help to deal with the
process of implementing new technology that is needed for the activities of mining and
refinery.
5.4 Limitations of the research work
The major limitation of the research what is due to the fact that the investigator has
analysed the data that are only collected from the secondary sources. Hence, it was not

50CASE STUDY: BRITISH PETROLEUM
possible for them to directly interact with the stakeholders of British petroleum and collect
the primary data in the form of survey or interview. It was also not possible for the
researchers to analyse the recent data that could have been collected from primary sources.
Therefore, one of the major limitation of the research work is not able to make predictions
about the latest trends and changes that have occurred within the petroleum industry.
5.5 Chapter Summary
The current chapter has properly summarised the findings and collect the information
that has been utilised by the researcher. Hence it is possible to identify up on the cause of
poor level of sales of British Petroleum. This has also hugely affected the brand reputation of
the company. Proper recommendations and action plan has also been suggested, which has
focused upon improving the technological infrastructure of the company along with that of
environmental policies that will help to ensure proper sustainable development for the future
generations.

51CASE STUDY: BRITISH PETROLEUM
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