The Long-Term Impact of the BP Oil Spill: A Review and Recommendations

There are two compensation mechanisms to recover the loss caused by the oil spill: filing an individual suit in court, settlement at the approval of the court, or a class-action suit. Recommendations for British Petroleum (BP) include accepting responsibility, cutting costs, offering help to affected people, and developing a long-term plan to improve water quality. Additionally, BP should minimize environmental issues, promote fishing industries and tourism, consult experts, and sign contracts with stakeholders.

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Contents
Part 1...........................................................................................................................................................3
PLC (Product life cycle).............................................................................................................................3
BCG Matrix.................................................................................................................................................4
Marketing objectives...................................................................................................................................5
Ansoff Matrix- 4 Strategies.........................................................................................................................6
Part 2...........................................................................................................................................................8
Environmental problem – BP Oil Spill........................................................................................................8
Stakeholders Theory....................................................................................................................................8
Recommendations.......................................................................................................................................9
References.................................................................................................................................................11
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Part 1
PLC (Product life cycle)
The product life cycle of the Company involves basically a four stages and these stages starts
with the Introduction followed by the growth and maturity stage and ends with the decline stage.
However, the below diagram shows the product life cycle of the JB Hi-Fi company, which is
dealing with the electronic appliances and is famous for its consumer goods in Australia.
Introduction Stage: The first stage of JB Hi-fi company is the introduction stage when the
company established its digital tape players in the various countries. The company starts
operating in the Australia and New Zealand (Elliott, 2003).
Growth stage: At this stage the company decided to launch more products like CD players and
home computer results to increase in the sales around almost $8 billion with the passage of time.
Maturity: JB Hi-Fi also continues to grow because of the merger and acquisition of the
companies as the company decided to acquire Hill and Stewart chain of 11 electronics stores in
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the year 2006. The company earned the maximum profits or sales at this stage, i.e. NZ $17.5
billion.
Decline: The decline stage comes because of the fall in the sales of the black and white
televisions.
BCG Matrix
Talking about the BCG matrix, it stands for the Boston Consulting group and this is very helpful
in demonstrating the different stages of the product strategy. There are four stages explained by
the BcG matrix and these are the Stars, cash cows, Question and Dogs. All these four stages are
showing the level of the market share and business growth. This matrix is useful to analyze the
different aspects of the market share and the growth of the business in relation to the products of
the JB Hi-Fi company. The JB Hi-Fi company is the leading Strategic business unit having a
high market share and growth (Star cell) (JB Hi-Fi Group Pyt. Ltd., 2016).
Cash Cows: The company JB Hi-Fi also has the highest market share in the electronics sector
and the business of the electrical appliances spread across the 194 different locations. This
strategic business unit represents a low growth rate and high market share and it is assumed as
the mature market. The company needs to build some strategies to maintain its profitability.
Stars: At this situation, both the elements such as market share and growth are high. For
example, currently the company is a well established company and it can still grow in the
process of making revenue of the company. The JB Hi-Fi company falls under this category
because of its high growth and market share in Australia and New Zealand.
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Question marks: This SBU depicts the situation of the high market growth but low market share.
JB Hi-FI is trying to start its business in the 16 more new locations.
Dogs: This SBU cannot affect the other elements of this Matrix. For example the supply of the
black and white TV have low share and low growth.
Marketing objectives
Brand positioning: JB Hi Fi has the objective to maintain its brand image by providing the high
quality of the electronics products. The company is already in the fourth position in the
generation of the revenue as the company is managing portfolio across the world with the
different pricing. All these strategies help in building the reputation of the JB Hi-Fi in front of
the people.
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Increasing sale: Looking at the future period of time, the company is focusing to increase its
sales by attracting maximum customers in the coming 5 years. The JB Hi-Fi sale is highly
influenced by the product quality and the price of the products. There is a direct relation between
the sales and the quality of the products . The sale of the company increases if the product
quality is high. On the contrary, the JB Hi-Fi is focusing on the quality of the all the electronic
products to attract the customers and to generate the maximum revenue (ASX, 2014).
Cost leadership- The company has the main focus to promote their products and attract
maximum customers. The company, JB Hi-Fi is reducing the cost of the products to become the
leader of the electronics company. The reasonable price of the electronic appliances attracts the
new customers and it will help to gain the competitive advantage in Australia and New Zealand.
Ansoff Matrix- 4 Strategies
The Ansoff matrix depicts the four different strategies for the organizations to achieve its
marketing objectives. This Matrix helps the organization to take the best strategic decisions with
regard to these four different strategies and these are as below:
Market penetration: This strategy is very useful as it is applied in the case when the market of the
electronics has the capability to grow. The company already builds focused strategies for the
market penetration as the company offered different products for the home business as well as
diversified products for the professional business (Goldman Sachs JBWere Pty Ltd, 2011).
Product development: This is the best strategy can be applied by the JB Hi-Fi as the company
can develop its new products because of the increase in the demands of the customers. This
strategy is very helpful to gain the advantage over the competitors by introducing the latest
technological products for the competitive advantage.
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Market Development: This strategy can also be used by the JB Hi-Fi company, as the company
is focusing to tap the new markets. As the company already operates in the 194 different
locations, so it can also expand its business in many other overseas countries like Europe, Russia
and Africa.
Diversification: This strategy means to diversify the business and focus on the other type of
business for the successful growth of the market. This strategy is risky, but useful for the future
period of time. This strategy involves the investment for a longer period of time. The JB Hi-Fi
company invested around 5 billion dollars to produce the new computer appliances. This
diversification strategy helps in building the brand image of the company (Biddle, 2010).
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Part 2
Environmental problem – BP Oil Spill
An environmental problem faced by the British Petroleum Company was at the time of the
explosion of the deep water horizon rig. The company suffered from the huge damage because of
the spill of the oil into the gulf of the Maxico. As per the records there were around 4.5 million
barrels of oil, which was released into the gulf and this oil contaminated the water and affect the
environment to a great extent. All the water got polluted because of the oil spill.
The main cause of the oil spill was determined by the Federal joint task force and they
concluded that the all the contractors, Transocean and Halliburtun who owned the rig, are
equally responsible for the damage and explosion (Brennan, 2013). However the problem was in
the end faced only by the British petroleum. There are many other environmental cases
registered against the BP. The company health and safety violations were the reason of the
explosion the refinery in 2005 and fire in the year of 2006. All these accidents results in the
death of the 30 people. Moving further, all these disasters spoil the environment as this accident
affect the fishing, food and health care of the animals and people living in the surrounding
environment. The company needs to focus on solving these environmental as well as the ethical
issues. The company has some responsibilities towards the welfare and the wellbeing of the
society. The environment of the marine or sea is highly affected through the rig explosion.
Stakeholders Theory
There are many theories that applicable in this environmental problem such as Stakeholders,
health and safety policies, and ethical theories. Stakeholder theory simply represents the people,
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groups or the organizations that are influenced by the company actions. There are many
stakeholders found in the environmental issue and those are the contractors, BP, Transocean and
the owners of the rigs. All of these stakeholders are under the burden of the actions taken by the
corporations (Windsor & McNicholas, 2012).
The first stakeholder was the worker on the rig who is highly affected by the Deppwater oil spill.
At the time of the explosion, there were 126 people were on the rig and many people died in this
incident. Except the workers and the crew members, there are many other major stakeholders
were, the fishing industry, tourists, communities and the environment.
According to this theory, an environment is playing the role of the stakeholders in this accident.
This explosion had greatly affected the sea and the fishing industries. There are many methods
used by the British petroleum to reduce the amount of the oil from the shores. The methods used
are the burning, skimming and chemical dispersants. All these methods are useful in minimizing
the oil by 40%, but the long term impact was unknown (Ohreen, 2010).
Compensation mechanism: There are two ways to recover the loss of the company because of the
oil spill and these various methods are:
 To file an individual suit in the civil court
 Settlement at the approval of the court
 A classroom suit
Recommendations
The recommendation to the company to handle this problem are mentioned as below:
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1. It is recommended that the company should accept the fact that it was just an accident
and refuse to take the accountability of the reducing the oil from water and to recover the
ecosystem.
2. A Heavy cost cutting is the wrong thing and it is the dilemma of the ethical issues.
3. The BP has the option that he can blame others for this cause and offer some of the help
to the affected people as to show the CSR of the company (Sherwell, 2015).
4. The company should develop a long term plan and research on the improvement of the
quality of water, that is highly affected by the explosion.
5. It is advised to the British petroleum that to build the channel with the help of which the
company will get to know the status of the payment who affected by this explosion.
6. The company should need to minimize the environmental issues as much they can.
7. It is also suggested that the company should promote the fishing industries and the
tourism to maintain the balance in the ecosystem.
8. The company should consult the experts for their advice so that the company can easily
recover from this financial loss (Bryant, 2011).
9. The company should sign a contract from their stakeholders to share the equal loss
suffered by the organization.
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References
ASX, 2014. Annual Reports Preliminary Final Report, Available at:
https://www.jbhifi.com.au/Documents/Annual%20Reports/Preliminary%20Final
%20Report_FY14.pdf
Benayoun, M. & Whittaker, P., 2009. Upstream oil and gas: An evolving ecosystem, Available
at: https://www.bcg.com/documents/file15469.pdf
Biddle, I., 2010. Relationship Marketing: Shop-A- Dockets, Available at:
http://www.nhs.vic.edu.au/virtuallibrary/busidate/BusiDateVol18No12010.pdf
Bryant, B., 2011. Deepwater Horizon and the Gulf oil spill - the key questions answered,
Available at: https://www.theguardian.com/environment/2011/apr/20/deepwater-horizon-key-
questions-answered
Elliott, P., 2003. JB Hi-Fi Limited Prospectus, Available at:
https://www.jbhifi.com.au/Documents/Announcements/JB_Hi-Fi_Limited_Prospectus.pdf
Goldman Sachs JBWere Pty Ltd, 2011. JB Hi-Fi Limited Prospectus. Macquarie Equity Capital
Markets Limited, Available at: https://www.jbhifi.com.au/Documents/Announcements/JB_Hi-
Fi_Limited_Prospectus.pdf
JB Hi-Fi Group Pyt. Ltd., 2016. JB Hi-Fi Annual Report, Available at:
https://www.jbhifi.com.au/Documents/2016%20JB%20Hi-Fi%20Annual%20Report_ASX.pdf
Ohreen, D., 2010. Opinion: BP puts costs ahead of environment. Are we surprised?, Available at:
http://business-ethics.com/2010/07/05/1432-opinion-bp-puts-well-costs-ahead-of-environment-
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are-we-really-surprised/
Sherwell, P., 2015. BP oil spill: Five years after 'worst environmental disaster' in US history,
how bad was it really?, Available at:
http://www.telegraph.co.uk/news/worldnews/northamerica/usa/11546654/BP-oil-spill-Five-
years-after-worst-environmental-disaster-in-US-history-how-bad-was-it-really.html
Windsor, C. & McNicholas, P., 2012. The BP Gulf Oil Spill: Public and Corporate Governance
Failures, Available at: http://ro.uow.edu.au/cgi/viewcontent.cgi?
article=1036&context=acsear2012
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