7002LBSMGT: British Petroleum Strategic Capabilities Analysis

This report presents an internal analysis of British Petroleum (BP) to identify its strategic capabilities and discuss their implications for strategy formulation. The analysis utilizes three key models: SWOT analysis, Porter's Value Chain model, and VRIO framework. The SWOT analysis identifies BP's strengths (e.g., multinational presence, diversified revenue, strong operational performance) and weaknesses (e.g., oil spills, environmental concerns, and past handling of disasters). The Value Chain model examines both primary and secondary activities within BP, highlighting areas like inbound logistics, operations, marketing & sales, and human resource management. The VRIO framework assesses the value, rarity, imitability, and organization of BP's resources and capabilities. The report concludes that BP is capable of sustaining itself in the market, but needs to be innovative in technology and CSR. The report is based on the assignment brief to analyze a FTSE 100 company.

STARTEGIC MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
Internal analysis to determine strategic abilities of BP................................................................2
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

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.
SWOT analysis-
Strengths-
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. 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-
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. 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).
Opportunities-
By grabbing the opportunities available in marketplace, British Petroleum can increase
their productivity and profit margin as well. Firm has power of becoming a market leader in
many alternatives energy and fuel markets. By investing in research activities and repositioning
their business strategies, BP will get the opportunity to become market leader, these market
changes include solar, hydrogen and wind. Along with it, business expansion into geographic
territories is another opportunity for company that helps to gain competitive benefits. British
Petroleum has chance to partners with some nations in developing conditions for infrastructure
problems in order to take step towards use of clean energy options, move for positioning their
brand around environmental and innovation accountability (Amernic and Craig, 2017).
Threats-
High competitive environment posse’s threat for BP, it affects its business performance
and operational efficiencies (Vassiliou, 2018). It put pressure on company to make changes in
their existing business plans and activities, which require more investment. They face
competition from emergence of particular alternatives energy firms that are providing
affordability and technology to encourage greater relocation away from reliance on fossil fuels,
which will decrease British Petroleum consumer base rather than before.
Porter’s Value chain model-
Primary activities-

Inbound logistics-
British petroleum inbound logistics define its abilities and capabilities, including storing
inputs and components to start manufacture process.
Operations-
Organization alway focus on their production activities, which is quite beneficial in term
of increasing profit margin and productivity level.
Outbound logistics-
It includes actions that deliver goods to consumers by passing through various
intermediaries. British Petroleum optimizes and analyzes their outbound logistics to explore
competitive benefit source. Within company, outbound activities are effectively and timely
managed with optimal costs that effect on quality.
Marketing and sales-
Marketing department of BP help to generate brand awareness in marketplace, they are
able to provide many benefits such as aid to increase profit margin and generate more revenue.
Some examples of company marketing as well as sales activities are sales force, pricing,
advertising, building relations with channel members and promotional activities (Charles, 2019).
Services-
Post and Pre-sales services offered by company will play vital role in developing
consumer loyalty. BP analyze their support activities in order to avoid damaging brand
positioning & reputation, instead utilize it as a tool to spread good word of mouth due to timely,
efficient and quick support services.
Secondary activities-
Firm infrastructure-
It denotes several of activities, such as legal matters handling, planning, quality
management and accounting. British Petroleum is capable to optimize value of whole value

chain; the best infrastructure management controls every activity to strengthen competitive
position of firm in market.
Human resource management-
HRM is one of the most important and effective department in BP, they are able to hire,
recruits and trained all workers. Human resource management helps to strengthen brand image in
marketplace and also support to build strong workforce by applying various techniques &
strategies.
Technology development-
British petroleum is capable to invest in technology development, which increase its
operational efficiencies rather than before and in return increase profitability. Technological
integration in distribution, HR activities, production and marketing requires firm to consider
importance of technology development (Yu, Román and Solvang, 2018).
Procurement-
British Petroleum is able to purchase inputs which may range from machinery, supplies,
equipments and other items essential for offering finished services or products. Organization
considers their procurement activities effectively to optimize operational, outbound and inbound
chain. Firm highlights areas where value will be added, differentiation basis will be set, cost
efficiency can be achieved or procedures will be optimized. Firm is effectively refining or
converting crude oil into finished goods.
VRIO –
Valuable-
In context of British petroleum, company has a strong worldwide presence that is
significantly valuable for them. They attempt to expand their business size, piece and deals of
overall sector. It is a sustainable and competitive method to obtain incomes from new and current
consumers.
Rare-

Growth and performance of company is rare, it is one of the greatest firm all inclusive.
BP made a distinct name for their offers and quality. Other companies also offer various goods
that are provided by British petroleum, which means that it is not rare asset for them. This is
because other firms also have access to similar services or goods as well as portfolio. BP is
contemporary brand name that had a premium touch to it & in modern and upscale. Most other
organizations and competing brands, does not have packaging and quality to urge consumers to
engage in way they do with BP.
Inimitable-
British petroleum continued investment in research and development as it permit them to
generate ideas for new goods and test that new services in limited market setting. It allow firm to
assess viability of new thoughts and generate feedback for betterment where needed. It is an
inimitable asset for BP because it has become essential part of organizational culture and system.
Innovation at firm in an inimitable resource that permits business at stay ahead of high
competition & maintain leadership in their sector by having first mover benefits in its product
portfolio continuously. Human resource management is inimitable resource for company, they
take part in exemplified HRM in all their function, from hiring to training of talent management.
It will allowed firm to develop an inimitable asset which is aligned with mission, vision and
goals of organization and that is synonymous to BP itself.
Organization-
BP policies and business process organized to help exploitation of their rare, costly and
valuable to imitate assets. The organizational structure and policies are rare as there are other
major players like Dolphin energy that have rare and valuable organizational policies as well as
structure. They are able to use technology to find oil reserves where the amount of oil is more
than the other places. On the other hand, firm is unable to get geographic access to market.
CONCLUSION
From above analysis, it has been concluded that BP is capable to sustain within
marketplace for longer, as they can satisfy consumer’s needs and manage value chain activities
in effective manner. Furthermore, it has been analyzed that British petroleum has to be more

innovative to bring out technology; they seek to invest for installation and implementation of
new systems that is beneficial for business growth. Organization is slowly becoming to be a CSR
firm because they have reached set aim very before and had gained a good benefit from doing so.

REFERENCES
Book and Journals
Amernic, J. and Craig, R., 2017. CEO speeches and safety culture: British Petroleum before the
Deepwater Horizon disaster. Critical perspectives on accounting. 47. pp.61-80.
Chaplinsky, S., Lynch, L.J. and Doherty, P., 2017. British Petroleum, Ltd. Darden Business
Publishing Cases.
Charles, D., 2019. Enhancing and Capturing More Value from the Caribbean Community’s
Value Chains. Cambridge Scholars Publishing.
Kanso, A.M., Nelson, R.A. and Kitchen, P.J., 2019. BP and the Deepwater Horizon oil spill: A
case study of how company management employed public relations to restore a damaged
brand. Journal of Marketing Communications. pp.1-29.
Tomlinson, K., 2017. Oil and gas companies and the management of social and environmental
impacts and issues. Extractive Industries. p.422.
Vassiliou, M.S., 2018. Historical dictionary of the petroleum industry. Rowman & Littlefield.
Yu, H., Román, E. and Solvang, W.D., 2018. A value chain analysis for bioenergy production
from biomass and biodegradable waste: a case study in Northern Norway. Energy
Systems and Environment. p.183.

Appendix
After using internal analysis models such as SWOT analysis, VRIO and value chain model in
context of BP, it has been determined that company is capable to manage their business
operations effectively. The high competitive environment threaten firm, but they can manage
each and every activity with strong workforce.