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Strategic Planning and Performance Goals: A Case Study

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Added on  2024/06/28

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This article delves into the strategic planning process and performance goals of a company facing a critical dilemma. The company, initially focused on environmental sustainability and social impact, seeks to balance profitability demands from new investors with its core values. The article explores key performance goals, strategies for convincing shareholders, and a 5-year strategic plan that aims to achieve both financial success and environmental responsibility.

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Contents
Assignment 1
................................................................................................................................... 3
Assignment 2
.................................................................................................................................. 5
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Assignment 1
1. Do you think that BP could have managed the crisis more effectively? Why or why not?

The senior management of British petroleum (BP) committed that have developed global

strategies but they failed to implement it when it was needed. The company could have managed

to crisis more effectively if they had a policy on how to conduct deep-water drilling. This is a

process under which holes are created by drilling rig in deep sea for oil mining. In the strategy

statement of company of March 2010, the company promised that it will be a world leader in

deep-water drilling for oil and gas and shall be best at finding and exploiting reserves in deepest

recesses of Earth and under thousands of feet of water. This competency in deep-water drilling

shall be source of competitive advantage in sustainability. However, the company failed to

implement this global strategy in hour of need and the gap between global strategy and local

operating policies resulted in bad management of disaster (
Wolf, 2013). The team of British
Petroleum failed miserably in implementation of global strategies and therefore it could be

concluded that they could have managed the crisis more effectively. The senior management of

the company must have put the fundamental standards of care in place and must have enforced

the execution of global operating strategies.

2. Could the reputational damage have suffered by the company been avoided by a

better/more adequate response?

British Petroleum spent years trying to establish itself as a brand which is environmentally

responsible. But all of its efforts were undone when Deepwater Horizon rig in Gulf of Mexico

exploded in 2010. In this disaster, 11 workers died, and an immeasurable damage occurred to the

surrounding wildlife, and tourism and fishing business was destroyed. Unsurprisingly, reputation

of BP was battered. This impacted its business in a significant way. The gas stations of BP

witnessed drop in sales and share prices and the company was reported to e facing a loss of $5

billion. BP became the butt of criticism from far to wide. As part of fixing the reputational

damage, BP started a multi-million-dollar ad campaign stating that “we’re sorry”. It further

promised to fund $500 million in scientific research. However, some believed that it was not

enough for the loss caused due to disaster. Further, the company showed little empathy towards

the victims of accident and the CEO of company also accepted that the company was slow to

communicate in the immediate aftermath of disaster and the company further attempted to pass
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the blame of disaster on other parties. The company could have avoided this damage by
responding better to the situation. However, the company still remains to be one of the biggest

market players. The company could have saved itself from reputational damage through

communication and commitment to sustainability.

3. Do you recall when the crisis was happening? What do you recall hearing about it from

the media? Was the company doing enough to respond to the public at the time the crisis

was happening?

When the crisis happened, the company had two jobs in hand including stopping the spillage of

200,000 gallons of oil in Gulf of Mexico and convincing people that it is giving its maximum

efforts to stop this spillage of oil in Gulf. When this crisis was happening, BP was watching its

market value and reputation wither away. It was America’s worst environmental catastrophe. For

87 agonizing days, millions of gallons oil spilled over the ocean floor. Number of birds, shrimp

and fishes died, and thick brown oil washed ashore in marshlands and on white sand beaches of

Gulf Coast. The businesses of fishing and tourism were forced to shutter. At the time of crisis, it

can be said that the company was not doing enough to respond to the public. The company, in its

interview after the accident, blamed third parties for the disaster. The company however

attempted to communicate with the public through social media. The company failed to develop

a positive image in minds of public as it did not show enough empathy towards the victims of the

incident. The statement given by the CEO of company after his first visit to the accident site that

‘he wanted all this to end and want his normal life back’ backfired on the reputation of company

and its efforts for controlling the damage (
Sherwell, 2015).

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Assignment 2
Abstract:

This article provides the discussion in relation to the strategic plan and the performances goals

targeted by the company.

Introduction:

Strategic planning plays an key role in the development of the growth of the organisations. The

key performance goals set by the companies helps in the long term growth and the developments.

The discussion is provided in terms of the case study and the planning operations.

Facts of the case

The facts of the case states that a business was started that was intended to be environment

friendly and creating positive social impact. The company worked well for 3.5 years but during

4
th year the company faced difficulties in winning bigger contracts as the competitors were other
bigger companies thereby limiting the reach. The company then decided to increase its

competitiveness and to guarantee long-term sustainability. For achieving this, it was decided to

take financial support from other individuals and organizations. The investors then became the

shareholders of the company with 75% of stake, and the owner of company was appointed as

CEO with expectations of increasing the profitability of company. The sole objective and focus

of shareholders were on profitability and they want the level of profitability to reach higher than

15% per year, failing which the CEO shall be replaced. The first business is to outlines a

strategic plan for next 5 years and the dilemma is to keep the shareholders satisfied on one hand,

with reaching maximum profitability and on other hand, to keep the company environment

friendly which may involve extra costs. The CEO must manage this dilemma.

Key performance Goals

The key performance goals for next five years shall include-

Utilizing the strengths of company for solidifying competitive advantages
Formulate strategies that would help the company in gaining such competitive advantage
resulting in increased profits
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Setting short term organizational goals which are SMART
Creating such objectives which are customer-focussed so that the customer base can be
increased (Knowles, 2011).

Aligning the financial objectives of company with social and environmental impacts
Convincing shareholders

The shareholders of company can be convinced for investing in strategies that are environment

friendly and have positive social impacts by mentioning their importance and benefits in long-

term which may include following:

Enhanced image of company and its products
Ease of attracting investment thereby lowering cost of investment in such strategies.
The relationships with community can be improved thereby leading to easy and quick
approval of plans

Better relationship with regulators and protecting the company in cases of violations
Improved relationship with stakeholders and higher level of satisfaction of customers
Improved morale of workers, resulting in higher productivity, less need of new
recruitments and less training costs.

5-year strategic plan

The strategic plan of company shall include following:

Vision statement

Provide the community with best product, along with causing no harm to the environment and

leaving positive social impacts.

Mission statement

Increasing the profitability of company by 15% every year.

SWOT Analysis

Conduct a SWOT analysis of company and using its strengths, weakness, opportunities and

threats to achieve growth and prosperity.
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Strategic Goals
The goals of company includes increasing its profitability by accomplishing performance goals

and using the potential and applying best efforts towards achieving the profit targets. At the time

of performance of duties, ensuring that the environment is not impacted in any negative way.

Measuring success

Employing methods and making strategies for measuring the success of company at regular

intervals and ensuring that the company is achieving the progress and is not lacking in any key

areas (Leonard, 2018).

Conclusion

It is concluded from the above article that the planning plays a key role in the growth and the

development of the organisations. The plans set helps in the targeting the business goals.

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References Crowther, D., and Aras, G., (2008). Corporate Social responsibility. Bookboon.com.
Knowles, G., (2011). Quality management. Bookboon.com
Leonard, K., (2018). How Do I Write a 5-Year Strategic Plan? Chron. Available at:
https://smallbusiness.chron.com/write-5-year-strategic-plan-4709.html [Accessed on 27

July 2018].

Sherwell, P., (2015). BP oil spill: Five years after 'worst environmental disaster' in US
history, how bad was it really?
The Telegraph. Available at:
https://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

[Accessed on 27 July 2018].

Wolf, D. D., (2013). Crisis management: Lessons learnt from BP Deepwater Horizon
Spill Oil.
Business Management and Strategy, 4(1), 69-90.
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