Patrick presentation (1)

STRATEGIC
MANAGEMENT

11/03/2013 Strategic Management M3N209277

PRESENTATION TOPICS
This presentation will use the concept of strategic
management theories to analysis BP in the following
areas-
 Introduction of the company, products/services,
strategic objectives and CSR
 Financial performance
 External environment
 Competitive strategy
 Strategic directions of development
 Method of development
 Conclusion and Recommendation


INTRODUCTION
 (BP) British Petroleum is the third largest company in the energy
industry, and the fourth largest company in the world, BP is into
exploration and production of oil and gas, refining and marketing
wide range of their products, corporate and other businesses such
as alternative energy and shipping to its customers for everyday use
across 30 countries in 6 continental regions

Product On the road- Biofuels, Gas and petrol stations, etc…
and Home use- LPG
services Business- Air BP, industrial lubricant, shipping BP etc….


STRATEGIC OBJECTIVES
BP drew up a 10 point plan which covers corporate, operational and
organisational objectives during presentation of its 2011 result in
February 2012.
Expectations-
 Focus on safety and risk management
 Utilisation of organisational strength
 A simpler and standardised organisation
 More visible and transparency to value
 A stronger and more focused BP
Indicators-
 Active portfolio
 New upstream/downstream projects
 Target of about 50% annual increase of cash flow by 2014
 Re-investment of half of operating cash and half for other purposes
including distribution
 Strong balance sheet, with gearing in low of the 10-20% range over
time

CORPORATE SOCIAL RESPONSIBILITY (CSR)

 BP aims to be responsible and force for
progress.
 They tend to achieve this through guidelines in
their involvement and contribution to policy
debate, research support and development of
technology in power and transport
 Community investment

 Sustainability


FINANCIAL TREND OVER THE PAST 5YRS
2011 2010 2009 2008 2007
GBP GBP GBP GBP GBP

Turn over 26.03 24.45 -39.77 73.06 4.3

Operating 10.30 -1.19 10.72 9.6 11.10
profit %
Pre-tax 10.04 -1.58 10.20 9.34 10.84
profit
margin %
Return on 18.60 -2.59 14.34 21.88 21.08
capital %

Current ratio 1.16 1.15 1.14 0.95 1.04

Gearing % 97.55 107.09 82.45 89.52 77.22


EXTERNAL ENVIRONMENTAL STRUCTURE


PORTER’S FIVE FORCES
Threat of
New
Entrants
Low

Bargaining Rivalry
Power of Low Bargaining
suppliers Power of
Shell Buyers
High
Exxon-Mobil Low-High
Countries
that have oil Chevron Depends on
reservoirs Texaco demand
and oil fields

Threat of
Substitutes
Low


BP’S COMPETITIVE STRATEGY USING PORTER’S GENERIC
STRATEGY

Cost leadership Differentiation
leaders in finding and develop cost Alternative energy

Cost focus Differentiation focus


RESOURCE BASE VIEW
 BP’s resource are the oil in the ground, savings in the
bank/assets and skilled staff
 Oil wells: BP has a proved reserves of 17.7 BOE making
them the 3rd largest in the world
 Asset: Has an asset of about $293 billion

 Employees: Takes diverse talent across
engineers, HSE, projects, procurement and wells experts
to meet global demand


STRATEGIC DIRECTION USING ANSOFF
GROWTH MATRIX

Product
market


BP’S GROWTH METHODS

BP Consolidation
video


CONCLUSION AND RECOMMENDATION
USING SPACE ANALYSIS
Financial Strength

High

Competitive Low High Low High
Industry
advantage Attractiveness
Low

High
Environmental
Turbulence/Instability


RECOMMENDATION
 Penetration into market
 Political lobbying

 Care for environment

 Creating better image

 Green advert campaign


REFERENCES
 BBC News., (1998), Business: The Company File, BP and Amoco in oil mega-merger [online]. Available from:
http://news.bbc.co.uk/1/hi/business/149139.stm. [Accessed 20 November 2012]
 BBC News., (2011), News Business, BP and Russia in Arctic oil deal [online]. Available from:
http://www.bbc.co.uk/news/business-12195576. [Accessed 13 November 2012]
 BP., (2012), our business strategy [online]. Available from:
http://www.bp.com/sectiongenericarticle800.do?categoryId=9021974&contentId=7072362. [Accessed 20 October 2012]
 BP., (20120), products and services [online]. Available from:
http://www.bp.com/productsservices.do?categoryId=37&contentId=2007985. [Accessed 20 October 2012]
 BP., (2012), corporate social responsibility [online]. Available from:
http://www.bp.com/sectiongenericarticle.do?categoryId=9026901&contentId=7049221. [Accessed 25 October 2012]
 BP., (2012), BP Announces Acquisition of Additional Shares in Brazilian Sugar and Ethanol Producer CNAA [online]. Available
from: http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7070955. [Accessed 16 November 2012]
 Business insider., (2012), The15 biggest oil company in the world [online]. Available from:
http://www.businessinsider.com/platts-worlds-biggest-oil-companies-2012-10?op=1. [Accessed 30 October 2012]
 Herald Scotland., (2012), BP vows to invest in North sea projects [online]. Available from:
http://www.heraldscotland.com/business/company-news/bp-chief-vows-to-invest-in-north-sea-projects.19289703.
[accessed 2 November 2012]
 FAME., (2012), Detailed information on UK and Irish companies [online]. Available from: http://fame.bvdinfo.com/version-
20121121/Report.serv?_CID=86&context=3U7P8AHBF8HE5RZ&SeqNr=0. [Accessed 22 November 2012]
 Keynote., (2012), Energy industry market review 2010 [0nline]. Available from: https://www.keynote.co.uk/market-
intelligence/view/product/10351/energy-industry/chapter/4/competitive-structure. [Accessed 21 November 2012]


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