Comparison of British Petroleum and ExxonMobil

Running head: ECONOMICS
Economics
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2ECONOMICS
Comparison of British Petroleum and ExxonMobil
Introduction
The international trade allows the country to expand their markets for both goods and
services which might be not available for the country. International trade is known as the
exchange of services and goods which is present between the countries (Cortez and Johnston
2017). This type of trade gives rise to a world economy where prices, demand and supply are
known to be affected by the global events. The global trade also allows wealthy countries to
use their resources in an efficient way. When a country will not be able to produce an item
efficiently, it can obtain the item by trading with other countries which is known as the
specialization in international trade.
The paper will be comparing the international strategies of two famous petroleum
industry in the world which are the British Petroleum and the other is Exxon Mobil.
Introduction of ExxonMobil and British Petroleum
The British Petroleum company is a British Multinational oil and gas company which
is located in London. This particular company is one of the world’s seven oil and gas super
majors. British Petroleum known as BP have been found in the year 1909 which is more than
100 years ago. It is also a vertically integrated company which is known to operate in the
areas of oil and gas industry which also comprises of production, distribution and exploration
of petrochemicals in the industry. It is also known to operate in more than 40 offshore oil as
well as in gas fields (Morschett, Schramm-Klein and Zentes 2015). The downstream
activities of BP comprises of refining, manufacturing, marketing and supply of crude oil. The
British Petroleum is also known to market the petroleum products in more than 50 countries
worldwide and have around more than eighteen thousand service stations.

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ExxonMobil on the other hand, is an American multinational gas and oil corporation
present in Texas. This particular company is also known to be 9th largest organization by
revenue. It was formed on 1999, by the merger of Exxon and Mobil (Kapustin and
Grushevenko 2018). The primary brands of ExxonMobil are Exxon, Mobil, Esso and
ExxonMobil chemical. It is also the world’s 9th largest company in terms of revenue and is
one of the largest of the world’s Big Oil companies. However, it was criticized for the slow
response to clean-up efforts due to the oil spill in Alaska.
Foreign direct investment and outsourcing
The World Investment Report of 2018 states that the inflows of the foreign direct investment
had been USD275 billion which went down a little from 2016. The country also remained
one of the top destination for foreign direct investment in the year of 2018, as a result of large
consumer base, productive workforce, developed infrastructure and a favourable environment
for business which fosters innovation (Morschett, Schramm-Klein and Zentes 2015).
ExxonMobil will also be investing around $20 Billion in order to create thousands of high
paying jobs.
Internationalisation strategies in case of British Petroleum
Internationalisation strategy involves the plans that is known to guide commercial
transactions taking place between entities in various countries. It might also involve business
strategies which refers to the pans and actions of the private companies in order to increase
profit.
British petroleum have adapted itself in a complex market environment. It is known to
operate in more than eighty countries worldwide where it has earned a revenue of around
$380 million. British petroleum is always looking for better opportunities in order to conduct
business around the world (Meyer and Peng 2016). It have also known to develop

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relationship with Ford in order to build fuelling stations and hydrogen vehicles in California
and Michigan.
Amoco Corp and BP Co. plc. agreed to unite their business on a comprehensive basis for
becoming the largest ever industrial merger. The combined firm which is based in London
have become of the biggest company of United Kingdom where BP is known to hold 60%
equity interest.
The unique characteristics of British Petroleum which acts as internalisation strategy
are its unique pricing policy, products, place and promotion strategy. In case of product it can
be said that fuel is known to be the commodity product which is offered by all the oil
companies around the world. The unique characteristics of British Petroleum is that it sells
petrol and diesel which is better for the environment. It is also known as the only company in
the world which sells superior fuels which is better for the environment. The product line of
BP includes fuels and stations, motor oil and lubricants and convenience shop. In case of
price it can be said that when the prices between the competitors are easily matched it
becomes quite difficult for differentiating the products based on prices. The pricing strategy
of BP is mainly completion based and profit oriented for inelastic demand (Lundin 2018).
The service stations of the British Petroleum is the vital strength in marketing strategy and
are also located in some of the best locations. They also have a significant investment in
direct as well as indirect investment and distribution channel. The loyalty programmes are
some of the valuable point of differentiation which is used to drive sales volumes and counter
the activity of
Licensing policies
British Petroleum known to have chosen licensing for expanding its foreign
operations. The strategies of licensing involves