Strategic Management Research Paper

This assignment requires students to delve into the field of strategic management by analyzing a selection of case studies. The focus is on understanding how strategic management principles are applied in practice across diverse industries and contexts. Students will need to critically evaluate the strategies employed in each case, identify key challenges and opportunities, and propose potential solutions or recommendations for improvement. The assignment emphasizes research, analysis, and critical thinking skills essential for effective strategic decision-making.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
Question 1........................................................................................................................................1
PESTEL Analysis of British Petroleum......................................................................................1
Question 2........................................................................................................................................3
Analysing with the help of Five Forces analysis on how attractive is the world steel industry 3
Question 3........................................................................................................................................4
a) The product or services of a business organisation and analyse growth/market share using
BCG Matrix.................................................................................................................................4
b) Critically analyse the potential problems with the BCG Matrix............................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Strategic Management is linked with formulating and implementing policies in order to
achieve the set goals and objectives of business in effectual and planned manner. Strategies are
valuable factor as they provide directions to the employees at work place so they can easily
achieve their targets. The resources which are available in the economy should be utilised in
effective ways in order to attain growth and success in business. The undermentioned report is
based on British Petroleum which is leading oil and gas company and they are located in London
(Chandes and Paché, 2011). They are mainly focused towards exploring their business,
production effective and marketing of their activities. PESTEL analysis is the most important
factor in order to analyse how company is having their operations in business environment and
also BCG growth share matrix are used in order to classify business activities.
Question 1
PESTEL Analysis of British Petroleum
PESTEL Analysis are most valuable factors for business as it helps in analysing the
present situations in the economy so that operations can be shaped accordingly. British
Petroleum is dealing in gas and oil industry and the political, social, economic, technological and
environmental factors which should be considered by firms are evaluated below as:
Political Factors: BP are firms dealing in energy consumption, they are mainly targeting
the global competitors and the success of firms is that they are generating oil sources from
underwater reservoirs. The world energy markets are becoming volatile as there are changes in
the requirements, instability in geopolitical factors and the most important there is instability in
Chinese markets. As there are high climatic changes so government has to take steps in order to
maintain sustainable forms of energy (CHUANG and Liao, 2012).
Economic Factors: The developed nations like UK, Australia and Mexico the economy is
not having an impact on sustainability factors of British Petroleum. The valuable economic
factors are linked with the income level as these countries are having higher growth in income
level of people so people can afford more of oil and petroleum products. While on the other hand
the developing nations are still facing many challenges and these can have direct impact on
profitability of firms. The economic factors which had to be focused by firms are exchange rates
of different countries, inflation rates and the interest rates at which company will sell its
products. The report indicates that economic growth between 2011 to 2019 will be 7 percent of
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china and during the time of recession the prices of oils were maximised. As the new and
innovative technologies were evolved it leads to falls in the prices of petroleum and oil products.
Social Factors: The social factors are changing rapidly in the economy and these are
having impacts on the demand of oil and petroleum products and also labours who are involved
in oil extrusion from underwater. In 1992 there was an agreement signed which was named as
Kyoto and this had resulted in carbon funds and emission trading to become the most vital and
legal requirement in the economy. The social factors also consist of population growth rate,
cultural issues and other factors which are affecting British Petroleum.
Technological Factors: There is high need for British Petroleum in order to develop
technological advancement in their business operations. The new technologies have resulted in
exploration, refine and distribution of oil and gas products (Cinquini and Tenucci, 2011). BP
have installed innovative technologies which consist of exploitation of fire ice and Fracking
factors which helps in extrusion of gases from the rocks which are available underground and
this results in producing Shale gas. The gas which is produced known as Fire ice is more stronger
and effective then the natural gases which are Consumed by people of US and this will result in
doubling the supply of natural gases in the economy.
Environmental Factors: The environmental factors are most vital when it is linked with
business operations. The environment is affected by the extraction of oil from underwater,
refining and production of petroleum. The Government of UK have executed a new Law that
states that operations of oil and gases should be controlled and the risk factors should be kept
which may may evolve from these operations. As oil and gases are one of the important sources
of energy it is seen that they are shifting towards alternative sources of energy consumption as
these are economic friendly by nature. In the present age most of the companies are processing
laws in order to reduce the environmental threats that are posed by the oil and petroleum
companies.
Legal Factors: The laws are changing in the economy as there are changes in the
government. The issues which are affecting the operations of British Petroleum are health and
safety programmes and policies, laws related with employment and the taxation policies. BP are
involved in extraction and production of oil and gas products so they should follow all the laws
which are related with the process of operations (Doz and Kosonen, 2010). Government had
implemented health and safety programmes for the health of persons who are involved in oil and
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gas exploration. The tax rates should also be kept in mind when the products are distributed in
various markets across the nations.
Question 2
Analysing with the help of Five Forces analysis on how attractive is the world steel industry
The steel industry is facing high competition at market place as there are large number of
competitors who are involved in similar business operations. Industry is related with the field of
study which examined the difference among perfect competition factors and also imperfect
competition supported in the real world. This can be analysed with the help of Potters Five Force
Model which is evaluated below as:
Competitive Rivalry : This is one of the important factor which states the rivalry factors
among the companies which are existing in market and dealing in similar operations. If there are
high competitors then it may impact on profitability factors of business. The customers will buy
those steel products which are of high quality and these are easily available at economical
pricers. Thus steel firms should set the prices of their products by analysing the strategies which
are adopted by their competitors in order to achieve high profitability and achieve loyal
customers (Eden and Ackermann, 2013).
Threat of new Entrant: The competition to steel industries is not only from the existing
players but also those players which may be entering into the market place and performing their
operations in the similar industry. If steel firms have achieved long term sustainability then it
may result in gaining strategic power and attracting new firms who will be running their
operations in similar industry. If there are no barriers to entry then new firm can easily enter and
this can affect their sales and profitability. Example: Large Russian producers are entering the
markets and also Chinese products are in competition with the steel industry thus they have
increased their power and capacity by many times, this is the most vital factor which resulted in
attaining higher positions. China is the leader in steel industry and they have increased their
manufacturing capacity several times which result in enhancing their total market shares. China
is leader in the market at present time there is always a fear that if there is any slowdown in the
operations then it may result in surge in the international market.
Threat of Substitutes: The products which can be used in place of other products and
they fulfil the similar needs are known as substitute products. If there are large number of
substitute available at the market place then it may result in high competition and enhancing their
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overall profitability ratios. Example: In cars the substitute of steel is Aluminium and plastic
products are used for packaging.
Bargaining power of buyer: The bargaining power of the customers are higher when
they are purchasing the products in bulk quantity or there are many rivalry firms so customers
can easily switch. Example: The major buyers of steels are cars manufacturing such as Totyota,
Volkswagen and Ford, the key customers can also be the producers such as Crown Holdings
produces ¼ of the total steel supply in the world (Freeman, 2010).
Bargaining power of the Supplier: The suppliers are the strong factors as they provide
raw materials which are beneficial for manufacturing products. There should be strong relations
maintained with the supplier as they set the final price of the products in the allotted time.
Example: Iron Ore is the raw material for steel producers and the major producers of ore is -
Vale, BHP Billiton and Rio Tinto and they are controlling almost 70% of the market shares
while ore are traded internationally.
Question 3
a) The product or services of a business organisation and analyse growth/market share using
BCG Matrix
TESCO is multinational British firms who are involved in grocery and general
merchandising and there headquarters are located in UK. The component of BCG Matrix are
evaluated below as:
Stars: These products are having higher market shares and they are earning high profits
from selling their products. TESCO should invest their money in star as they will get higher
returns in terms of finance. As there are changes in the industries due to advancement in
technologies so firms should invest their money safely in star in order to get higher return. There
should be plans developed in order to keep the high market shares and if not then the stars can
turn into cash cow (Gooner, Morgan and Perreault, 2011).
Cash Cow: These factors are always having lower growth but there market shares are
very high. They always produce more cash then they consume. These cows are providing the
cash so that question mark can easily be converted into leaders at market place. They are
generating the profits by investing very less amount of cash and they are always seen in those
industries which are constant that is not growing.
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Dogs: They are having lower growth and also there market shares are also low. They are
not having the potential and capacity to bring higher cash. There should be strategies developed
in order to minimise the dog business and the operations of business are always at declining
stage.
Question Mark: These factors are having lower market shares but there growth rate is
very high and Tesco have started their business with Question Mark and if there market shares
will remain unchanged then they can easily attain large amount of cash. These business are
having the capacity to convert into star business and cash cow. The investment factor should be
higher for these business.
b) Critically analyse the potential problems with the BCG Matrix
According to the views of Greco, Cricelli and Grimaldi, (2013) it is stated that BCG
Matrix is a theory that was developed by BCG, USA in order to analyse the growth performance
of an organisation. This is a two dimensional analysis, for evaluating potential outcomes. Some
of the limitations are mentioned below that is effective the whole process and they are as
follows:
 This helps us to evaluate the only the low or high business but it doesn't assist them in
analysing medium scale business. Thus, it do not provide the organisation with authentic
data.
 Boston Consulting Group (BCG) Matrix is a very useful model but it does not provide
the clear motive or vision present in the market.
 If a company is high on market share than it doesn't mean the organisation will gain
maximum profits.
 Thus, the growth rate will not always indicate the profitability related to market share,
BCG model disregard another indicators of the same.
CONCLUSION
From the above report it has been concluded that strategic management are beneficial
factors for firms in order to set goals and objectives according to which employees will complete
their targets. PESTEL factors are beneficial for firms in order to analyse the environment in
which there activities are operating.
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REFERENCES
Books and journals
Chandes, J. and Paché, G., 2011. Investigating humanitarian logistics issues: from operations
management to strategic action. Journal of Manufacturing Technology Management.
21(3). pp.320-340.
CHUANG, C. H. and Liao, H. U. I., 2012. Strategic human resource management in service
context: Taking care of business by taking care of employees and customers. Personnel
Psychology. 63(1). pp.153-196.
Cinquini, L. and Tenucci, A., 2011. Strategic management accounting and business strategy: a
loose coupling?. Journal of Accounting & organizational change. 6(2). pp.228-259.
Doz, Y.L. and Kosonen, M., 2010. Embedding strategic agility: A leadership agenda for
accelerating business model renewal. Long range planning. 43(2). pp.370-382.
Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management.
Sage.
Freeman, R.E., 2010. Strategic management: A stakeholder approach. Cambridge University
Press.
Gooner, R. A., Morgan, N. A. and Perreault Jr, W. D., 2011. Is retail category management
worth the effort (and does a category captain help or hinder)?. Journal of Marketing.
75(5). pp.18-33.
Greco, M., Cricelli, L. and Grimaldi, M., 2013. A strategic management framework of tangible
and intangible assets. European Management Journal. 31(1). pp.55-66.
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review and research agenda. Journal of Interactive Marketing. 24(2) .pp.138-154.
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approach. Cengage Learning.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases:
competitiveness and globalization. Cengage Learning.
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32(13). pp.1500-1516.
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Priem, R. L., Li, S. and Carr, J. C., 2012. Insights and new directions from demand-side
approaches to technology innovation, entrepreneurship, and strategic management
research. Journal of management. 38(1). pp.346-374.
Swayne, L. E., Duncan, W. J. and Ginter, P. M., 2012. Strategic management of health care
organizations. John Wiley & Sons.
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Wheelen, T. L. and Hunger, J. D., 2011. Concepts in strategic management and business policy.
Pearson Education India.
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