Business Environment Assignment - British Petroleum PLC

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Report And Reflective Report: CaseStudy Analysis
Table of ContentsINTRODUCTION...........................................................................................................................3SECTION 1......................................................................................................................................3SECTION 2......................................................................................................................................5SECTION 3......................................................................................................................................6SECTION 4....................................................................................................................................10RECOMMENDATION.................................................................................................................11CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................13
INTRODUCTIONBusiness environment is a combination of internal and external environment in whichcompany operates their business. All the aspects of environment are directly linked with theperformance of an organisation that's why they have to make their strategies accordingly. Forthis report, British Petroleum PLC is taken for discussion which is multinational oil and gascompany in the world and deals in natural gas, petroleum, aviation fuels etc. (Our History,2019). Macro environment would be analysed with the help of Pestle framework so that drivingfactors or which influences performance would be identified. Moreover, to scan internalenvironment, SWOT analysis would be done on pan organisations and how it will affect theirdecision making. Petroleum industry would be analysis by using porters give forces model and toidentify current status of company, VRIO will be done. At last, reflective report will be producedfor the whole report.SECTION 1British Petroleum formerly owned by the government only but after after privatised thecompany in 1987 due to which they merged with the Amoco in 1998 and become of the largestexporter of oil and gas in the world.All the business operation in an organisation is conducted under the environment whichis divided into two aspects i.e., internal and external environment. External factors can not bemodified or controlled by the single organisation as it is uncontrollable in nature. So it must beessential for them to analyse and monitor it regularly and then make the marketing activities andstrategies accordingly. To conduct external analysis of British Petroleum, Pestle analysis will beused which is explained below with functional example of it,Political environment:Policies of the UK government has a direct effect on the growthand development of the oil and gas industry due to the sensitiveness of demand andsupply relationship. Before the news of Brexit, BP has the potential and power ofconducting their business in various countries of European union like Denmark, Austria,France etc. But after that, rules and regulation regarding supply of oil and gas would bechanged due to which negative impact would be generated on BP. Besides this electricityand gas bills will be increased due to which BP profitability would be affected negatively(Brexit and the UK oil and gas industry,2019) On the other hand, due to closeness
between the UK government, BP has been able to grab 10 billion dollars deal with theRussian government due to which shares and trust of the investors are increasingsignificantly (BP's close ties with the UK government,2019).Economical environment:Economic condition of the UK is been hampered due tofluctuation in the GBP due to which companies like BP has been suffering negativelyfrom past many years (How does Brexit affect the pound?,2019). But oppositely,increase in inflation rate of UK to its highest, crude oil price is also increasing which ispositive sign for companies profitability in the future (UK inflation hits six-month high of2.7%,2019).Sociological environment:BP has been able to enhance the living standard of the peopleand employees associated with them. For instance, BP has paid 1.7 billion dollars ofdividend to their employees due to which company image in the mind of the customersare getting stronger (BP's impact on the UK economy in 2017,2019). On the other side,rise in global warming and depletion of natural resources has affect their goodwillnegatively as spill in gulf of Mexico has killed thousands of Kemp Ridley sea turtleswhich comes under the most endangers species in the world (BP spill damaged theenvironment,2019).Technological environment:It has positive impact on the BP working operations aswith advanced technology like Big data and latest technology, BP would be able exploremore than 120,000 barrels of oil on regular basis. Moreover, it also works in the climatelike storm which has 40 meters wave. Along with this, BP has saved 7 billion dollar bypredicting the future climate (BP looks to big data to help weather weak oil price,2019)Legal environment:It is essential for company to comply with rules and regulations asvarious legal issues could be faced by them then. For instance, due to oil and pollutionact, British Petroleum has paid 12.6 billion dollar to countries and companies due towhich their balance sheet has affected negatively (Deepwater Horizon costs total $62B,2019).But on the other side, BP has been able to cope up with all the rules and regulationof employees due to which their retention rate are higher as compare to other companies.For instance, they spend 3300 dollar per employees in a year to make the environmenthealthy and friendly (BP at a glance,2018).
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