Internal Analysis of British Petroleum for Strategic Management

STRATEGIC MANAGEMENT

Table of Contents
Table of Contents........................................................................................................................................2
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
Internal analysis to determine strategic abilities of BP............................................................................3
Threshold resources and competence......................................................................................................8
Unique resource and competences...........................................................................................................8
Evaluation of 3 tools................................................................................................................................8
CONCLUSION.........................................................................................................................................10
REFERENCES..........................................................................................................................................11
Appendix 1 SWOT analysis..................................................................................................................13
Appendix 2 VRIO..................................................................................................................................13
Appendix 3 Core competency................................................................................................................13

INTRODUCTION
Strategic management is the monitoring, ongoing planning, and analysis of all essential
things for companies to meet their objectives and goals. The current report is based on British
Petroleum, is a world’s biggest gas and oil firm with headquarter in UK. It has operations in
about 80 nations, which produces equivalent or closely to 3.8 million barrels of oil every day and
operate nearly 22,400 services stations in across the world. This study explains strategic abilities
of chosen company by conducting internal analysis with the help of using three models.
MAIN BODY
Internal analysis to determine strategic abilities of BP
Here, internal analysis in context of British Petroleum will conducted with the help of
using three effective tools or models, in order to determine the strategic capabilities of company.
Internal analysis is defined as exploration of chosen organization’s competency, competitive
viability and cost position in marketplace. Conducting this process often incorporates measures
that cater useful data about firm, strength, weaknesses, opportunities & threats. There are three
different types of internal analysis models or tools use to analyze capabilities of chosen firm,
following are;
Definition of internal analysis and strategic capabilities-
Strategic abilities refer to a company capability to harness all their skills, resources and
other this in order to achieve business aim and gain competitive advantages within specific sector
(Huikkola and Kohtamäki, 2017). While internal analysis means considering at factors within
internal environment of business such as strengths, weakness, opportunities and other that impact
on decision making.
SWOT analysis-
It is strategic planning technique or method that can used to help a company and
contribute in analyzing their business as well as management capabilities. Here, it is used in
regard to British petroleum (Sevillano and et.al., 2020).

Strengths-
Effective management activities-
BP is multinational gas & oil firm, based in London (Kanso, Nelson and Kitchen, 2019).
It is one of the four largest oil and gas organizations in the world, in terms of revenue with
market cap of 108.50 billion. The strength of this company is its effective management, they has
a number of subsidiaries as well as retail brands that include ARCO, BP connect, Travel centre,
ARCO and British petroleum express, PM Burmah Castrol etc. which cater firm with a
diversified revenue portfolio more than basically relying on their power business.
Strong performance capability-
This organization had strong operational performance that helps to gain competitive
advantages. It is working towards, positioning firm for new oil price scenario. There is direct
focus on costs, discipline and efficiency in capital spending. BP is able to work extensively to
rebuild their brand image in market and wake of current accidents by executives including a full
on focus on CSR and transparency as well as more thoughtful interactions.
Weaknesses-
Dishonesty and lack of management skills-
Oil spills are a concern of BP, as they face same difficult situation like other gas
companies in UK throughout Torrey canyon disaster, which led to significant environmental
change and fatalities around the world. The executives of organization were dishonest and
ineffectively handled these disasters, that further tarnished brand image and led to massive fines,
penalties and costs to assist those field that were destroyed. It defines organization weakness that
directly impact on its productivity and profitability negatively.
Lack of execution-
Company had closed some oil wells, leading to certain layoffs, which have occurred in
bad economic cycles, furthering business position that BP is greedy and uncaring (Tomlinson,
2017).