British Petroleum Strategic Management: PESTLE, SWOT, and Five Forces

This report provides a strategic analysis of British Petroleum (BP), a prominent British oil and gas company, focusing on its internal and external environments. It employs several strategic management tools, including PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors impacting BP's operations. Porter's Five Forces model is used to evaluate the competitive intensity within the industry, considering the threat of substitutes, bargaining power of buyers and suppliers, the entry of new competitors, and industry rivalry. A SWOT analysis identifies BP's strengths, weaknesses, opportunities, and threats. The analysis aims to provide insights into BP's strategic position and sustainability in the context of the evolving energy landscape and competitive market dynamics. Desklib offers a range of similar solved assignments and study resources for students.

Strategic Management
and Sustainability
Table of Contents

INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
PESTLE Analysis of British Petroleum:.....................................................................................3
Five Force Analysis.....................................................................................................................5
Strategic group analysis..............................................................................................................7
SWOT Analysis..........................................................................................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic management is termed to as the techniques of managing the tactics of the
business that are implemented and formulated by their executives. The fundamental purpose of
business is to maximise the global productivity and performance in respect to gain competitive
boundary over varied other challengers. It can be evaluated that arrangement of decisions and
managerial exercises that maximise effectiveness of the management that manage their resources
and create effective targets, measure competitive environment as well (AlShehail, Khan, and
Ajmal, 2021). The pandemic situation of COVID-19 will have an impact on the performance
and functions of the business. Hence, it gets important to implement suitable tactics to functions
their management effectively. The following report covers the scenario of British Petroleum that
are popular British oil and gas brand. Management is expert in managing oil and gas that
involves refining, distributing, extraction, exploration, power generation, trading and as well as
marketing. In relation to it the management is having their headquartered in London, England.
The report covers about the internal and external environment like PESTLE and SWOT analysis
in context to the British Petroleum. It will also involve industry life cycle framework and Porter's
five forces in respect to identify its competitive situation.
MAIN BODY
PESTLE Analysis of British Petroleum:
PESTLE Analysis:
PESTLE analysis is termed to the strategic model that is done by the management in
respect to measure the managerial situation of the external environment. External factors have an
impact on the productivity and performance of the management in negative and as well as
positive manner. In relation to the British Petroleum such factors are related to the external
situation that are as follows -
 Political Analysis – Political factor will termed to the unreliability and flexibility of
political situations in the certain fields, restrictions and approaches of the government,
foreign trade policies and restrictions on trades that will have an impact on the
presentation of the management (Habib, and et.al., 2021). In relation to the British
Petroleum, that is an international brand that conduct their operations in varied other
country. Hence, it should know political situations in their tactics and plan of actions in

respect to perform it. As it is important to measure the political conditions of various
country and develop the tactics and makes the tactics and create policies in respect to
perform their operations (Hadid, and Al-Sayed, 2021). In relation to British Petroleum,
formulation of new rules in terms of the taxes, competitive laws and manner of
employment. Hence, such factors will maximise and decay the operations of the business
as per to get the approval from the government so British Petroleum have been provided
funding to various British programs.
 Economic Factor – It have an important role in functions of the management that will
have an impact on long term success in a negative manner. Wages, interest rates, foreign
exchange rates, rate of inflation, workers who performs and customer spending are some
of the sections that include in this factor. In context to the British Petroleum, organisation
have focusing on to decreasing environmental issues that gives them effective results.
 Social Factors – It involves expectations, attitude, behaviour, growth of population,
cultural norms and any fluctuation in the trends or needs of the society which can impact
the working of the firm, In relation to BP , company's marketing strategies influenced by
the factor of increase in the prices of oil locally as well as of gas and firm is assuming
more power supplies.
 Technological Factor – Management of the British Petroleum concentrates on adapting
several means of technology which includes digital marketing of their advertisement
rather than the use of the the transnational way of marketing in accordance to get the
maximum audience with spending low amount. The need of the renewable energy in the
world, integration with the need to be accomplish for the technology as well as
automation. In order to improve the sub sea automation in the firm which is essentially
invest in the automation that can support in the production of oil as well as gas.
 Legal Factor - Occurrence in legislation governing businesses, imports , health laws,
employees laws, safety of consumer as well as workers, exports and legal factors affects
the smooth functioning of the company are included in this factor (Khattak, and Khattak,
2021). Company should concentrate and follow all these laws and norms that are made
by the government in accordance to function their working in an effective and efficient
mode. In context to the British Petroleum, firm need to concentrate on the several laws in
respect to the utilisation of fuel and also in relation to the carbon emission which is very

harmful for the environment and also firm requires to be more conscious in knowing the
trading laws laws of the European Union in order to know about the carbon emission.
 Environmental Factor – This element is related to the effect of the ecological factor and
affect the environmental aspects of it. Laws related to the protection of environment,
industrial waste, consumption of energy norms are included in the ecological factors that
should be considered by the organisation. In case of the British Petroleum, firm can work
on its functions with giving low carbon emission that provide into maintained effective
place in the market. This firm requires to adopt the waste management and they also need
to work on the several CSR campaigns in order to successfully attain their duty towards
the environment (Yadav, and Veettil, 2021). This can help them in getting an edge over
their competitors as their consumers will be inclined towards them. Management of BP is
taking support of several techniques in accordance to minimise the emission from the
greenhouse of the firm that is good for their long term growth.
Five Force Analysis
 Threat of substitute: These are the type of of goods which can be replaced by the other
goods as they are having the consideration of the market and also having major
consideration in the large market as well. Substitute of petroleum is solar energy that is
commercially viable for long term. The prices of the solar enegy is better then the prices
of petroleum. As per the Crisil & PHD Chamber, the average solar tariff rates is being
reduced from Rs. 15 per kwh to Rs. 8 per kwh. Additionally the wind power is gaining
more cost parity with the help of conventional energy sources. Furthermore, it producers
get the generation-based incentives of 50 paise/kwh which is subjected to Rs. 1 crore per
Mw over period of time of 10 years. As switching cost of the producer from the
petroleum to the form of energy can be difficult. If the equipment is designed in order
work on petroleum such as transport sector. However, the other issue used in the
industrial and the domestic sector is the switching cost is not so high.
 Bargaining power of buyer: These are the aspects that are revenant to the petroleum
enterprises as the buyer switching charges and for them the expenses for retail consumer
are some how low as alternative petroleum products from competing companies that are
free inside open market. As on the moment maximum of the retail distribution they are
having certain means of public sector undertaking. Instead of this, these are not anyway

promoted by the authorises and there is desire of purchasing all of the groups marketplace
merchandise at greater or less to the same fee. As the company level, they are already
promoted by the firms and this is also refereed to the nature of crude oil from various
sources. This also helps in having the better use of things so that they can rightly use in
the large market and also having better use of activities. At the company level, they are
offering to the particular goods and also having number of assets do exist and the choice
of crude oil is indirectly restricted the liberty of refining companies to choose the source
depending on the functionality of refinery and to form the unique crude. Thus, bargaining
strength of downstream petroleum firms for sourcing crude may depends up on the their
overall functionality.
 Bargaining power of supplier: It is defined as the power which is integrated with them.
This can be categorised on the basis of differentiation of inputs and the fundamental of
the company is being derived from the petroleum industry in crude oil and this range
from source to supply he things by which they can have the better approach in the market
as well. This aspects plays an important role within the delivery chain as the function of
differentiated inputs will become more necessary as the effective delivery system is
changing from the prospective and this is varied in order to maintain for preserving non-
stop processing inside the refineries. The other aspects is the switching prices of the
suppliers and the cost incurred in this are small and their can switch their supplier in easy
manner until there is the long term agreement in the two parties. This is also leading to
have the strong function the downstream petroleum firms. This is also related to the
Business standards, 2013, as the India have imports approximately seventy nine percent
of its crude oil requirement.
 Entry of new competitors: Economic of scale is the vital part which down average
charges of manufacturing. In context to petroleum industry, the goods are practical in
nature and the income is having small margins. For starting the new brand, economic
scale are majorly applicable in petroleum enterprise to deliver down cost and also having
full-size earning. This is the better way that the new company is having the seize a
enormous marketplace proportion in order to exist in the market and in order to utilise
economics of scale. Estimate marketplace stocks for the important oil marketing agencies
for the year of 2014-15.

 Industry Rivalry: These are the aspects which is related to the pertinent to the petroleum
supply chain and it includes the industry boom, the Indian economy has been steadily
growing and they are growing companies which is catering to the improvement. As per
the record, petroleum industry will even grow within the country and however, the
opposition is basically contained to the PSU majorly with the downstream supply chain.
Strategic group analysis
British Petroleum Plc is based in 1909 and the figure of the business enterprises of BP
institution of organisation and its firms in finding and advertising herbal strengths recrudesce. BP
PLC is the sector that is the largest incorporated oil business enterprises and turned for shaping
in 1998 from the merger associated with the British Petroleum and Amoco. It is the largest oil
company which is having the producer in the United States and also having the capacity by
which they can refine the 3 million barrels of oil in an easy approach. This also aims to have the
internal and outside environmental elements influencing the business sports and the certain
strategies of company which they are doing five years and will appraise the existence of the BP.
They further also helps in having the better approach in the market by which they can rightly
sustain in the large market. They are having the aligned such assets and competencies correctly
to advantage competitive gain over their competitors inside the oil and gasoline enterprise.
 Market share: Oil and gas industry is having major role in supplying the company's
energy needs with the oil production amounting to 517 million barrels an 58 billion cubic
metres of gas production which satisfied 94% and 68% consumption in the respectively
in 2009. as the UK is the largest producer of oil producer in 2009. and the large group of
billion pounds was paid as the tax representing 20% of the overall corporation tax paid by
all the venture to HM reserve.
 Market position: it is the worldwide oil and gasoline organisation and one of the high-
quality majors in UK. 0.33 biggest strength corporation in UK ns also having the
international rating. this is the forth largest oil company which is being measured by the
way of their sales.
SWOT Analysis
Strengths Weaknesses

 British Petroleum is having several
brands and in this, its helps to diverse
portfolio that is helping the company
generating revenue from all kinds of
customers.
 They are having strong network as this
are having distribution channels across
the world in various countries.
 The company is having the strong
political supports in their functions by
various government department.
 They have closes many oil wells which
is leading t may lay-offs that have
occurred in poor economic cycles,
reflecting the company.
 The competitors is all this hole is
having the major image which creates
many challenges for the company.
Opportunities Threats
 The company is having potential to
becoming the market leader which is
also leading to have the alternative fuel
and energy markets and if the market is
not having the better use in the large
market.
 They can expand their business in new
locations with the alternative fuel and
energy opportunities.
 The global regional and local
regulatory environment continue to be
the biggest threat for the company
which also impact how the BP can do
their business.
 The company will continue to face laws
units and penalties. If the company they
can address these environment issues
and the poor safety.
CONCLUSION
From the above report, it is concluded from the above report that, the strategic
management is the control of a business enterprise's resources in order to acquire the desire the
targets. Strategic management includes setting objective, studying the aggressive surrounding
studying the internal business enterprises, comparing techniques and making sure that control of
business activities by which they can rightly manage the overall business organisation. This is
the aspects which is having the main consideration of the market. The PESTLR Analysis is being

conducted in order to understand the impact of external factors which is leading to have the
required chaang within the organisation.

REFERENCES
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