The Competitive Environment Of British Petroleum Management Essay

The Competitive Environment Of British oil colour Management EssayThis cover is basically about the analysis of British oil color PLC (Bp). The analysis covers the free-enterprise(a) environment of the beau monde in terms of its stance in the thick of its several(a) competitors and in like manner how attractive is the sedulousness in which the British fossil oil company be bigs to. Apart from the emulous environment, this report as well as identifies the key occupancy strategies of the company and withal the various resources and capabilities of the company that has given the company an surround over it otherwise competitors.In analyzing the competitive environment, business schema and identification of the various resources and capabilities of British Petroleum, the fol slumping frame works will be used sporter five force, strategic gatherings, Bowmans strategy clock, value chain analysis.OVERVIEW OF BRITISH petroleum (BP)The British petroleum is one and only(a ) of the worlds largest heartiness companies and also one of the largest vertically integrated oil and gas companies in the world, which provides its customers with evoke for merchant vessels, energy for heat and lighting, and also retail service and petrochemicals products for e genuinelyday use. The BP Plc operates across six continents which include Africa, Asia, Australasia, Europe, North America and South America and their products and services are available in more(prenominal) than 100 countries in the world. British petroleums operations involve exploration, production of gas and crude oil, marketing and also trading of power, and natural gas liquids. British Petroleums headquartered is situated in capital of the United Kingdom United Kingdom, and it has employs about 80,300 people as part of its labor force.Bp has various brands which include the Ampm, Arco, Castrol, Aral, Wild bean caf and Bp itself and the energy mix of the British Petroleum is a mixture of oil, gas, solar, wind and biofuels. BP is a company which focuses mainly on petroleum, but has some interest in ersatz energy which shows that the company does non exactly specialize on oil and gas only like some of its competitors does.THE COMPETITIVE ENVIRONMENT OF BRITISH PETROLEUM (BP). In analyzing the competitive environment of the British petroleum, as earlier stated, a very useful tool to consider is the five forces pose of competition which was real by Professor Michael Porter of the Harvard Business School in 1980, this model identifies factors that affect the organizations competitiveness in the patience and also help the square to adoptive the appropriate strategy in order to enhance its competitive advantage and also protect itself from threat as well. The five forces place by porter includeThreat of entrants from organisations currently outside the industryPower of suppliers i.e. providers of inputs e.g. staff, IT, accommodationPower of acquireers i.e. recipients of pr oducts/servicesThreat of substitutes i.e. things customers might buy insteadCompetitors/rivalry competition within the industryTHREAT OF current ENTRANCE The threat of enamor into the oil and gas industry is modest due to the fact that there is high barrier of entrance into the industry. more or less of the companies that establishs the oil and gas industry like British Petroleum uses wakeless and very expensive equipments at well sites For example, pumping trucks and other grand equipments, huge capital investment expenses is involved, such(prenominal) as High infrastructure monetary value i.e. pipeline, road access in fields, land acquisition etc. accessibility of human resources in terms of scarcity of subsurface reservoir applied scientist and geologist all this contribute to the high barrier of entrance into the industry.POWER OF THE supplier The bargaining power of suppliers is relatively high and this is driven by the social movement of high terms of switching fro m one supplier to another and also the presence of relatively small number of energy and alternative energy suppliers (concentrated suppliers), also some of the buyers such as Bp and some other companies that constitute the industry are vertical integration companies so they might not even have the need to want to require the services of this suppliers so the power of the suppliers is Medium.POWER OF BUYERSThe balance of power shifts toward buyers. anoint is a trade good and one companys oil or oil drilling services is not that much different from another companys and thisleads buyers togo in favor of ready about prices and or better contract terms.The power of the buyer will be regarded has being Medium because buyers are powerful and can switch from the inhalation of Bp products to another oil and gas companys product and at the same cartridge clip an individual buyers decision does not necessarily have an impact on the company.THREAT OF SUBSTITUTES Threat of substitutes is Low and theSubstitutes for the oil and gas industry includes alternative fuels such as coal, gas, solar power, wind power, hydroelectricity and nuclear energy which is shut up in the developing phase and also involves high cost of production. Oil is of great importance it is not only used in fuelling cars alone, it is also used in the production of plastics and other materials. Majority of the means of transportation still relies heavily on oil and Oil is needed in order to generate electricity which implies that oil and gas would be depended on rather than the alternative due to its take of development and high cost of production.COMPETITIVE RIVALRY The level of competitive rivalry is high the industry is characterized by big companies which produce low differentiated products and there is low threat of substitute and also low threat of new entrance into the oil and gas industry.Another tool that can also be used in the analysis of the competitive environment of the British Petro leum is the strategy group framework by Porter in 1979. harmonise to porter, a strategic group is defined as a set of companies within an industry pursuing strategies that are similar to each other and different from firms outside the group on one or more key dimensions of their strategy.In terms of the oil and gas industry which BP belongs to, the level of competition is very high because major players in the industry such as Royal Dutch shell, Bp, Exxon Mobil, Total, chevron, and Conoco Phillips all adopt similar strategy and competing on similar pedestals which is adaptation of a vertical integration to an graspment and they also produces similar range of products.BUSINESS STRATEGY OF BRITISH PETROLEUM OVER PAST 5YEARSIn analyzing the business strategy being adopted by Bp over the past 5 years, the Bowmans strategic clock would be a useful tool. The strategy clock considers both the price and the perceived added value of goods and services produced by a company and compares i t to that of its other competitors.Placing the Bp group under the strategic clock show that the company uses Hybrid strategy which means that they operate at a low cost based, reinvest in low price and differentiated in operation. BP is one of the largest operators and also one of the most well established globally, the company operates both in the upstream and downstream operation and its operations is also increasingly diversified or differentiated in production offering various oil products to the market. At the same time British Petroleum (BP) has a cost base that permits low prices and which is sufficient for reinvestment to maintain bases for differentiation.BP has been adopting the Hybrid strategy for a long period of time now and the sole aim of the strategy is to achieve differentiation and a price lower than that of BPs other competitors.