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TABLE OF CONTENTS
Page
(1) Background of BP Company Plc Ltd …………………………………………………………………………… 02
(2) Market Segmentation, targeting and positioning of BP …………………………………………….. 02
(3) Positioning of BP ……………………………………………………………………………………………………… 03
(4) Competitive advantage of BP ………………………………………………………………………………….. 04
(5) Poter’s Generic Competitive strategies and competitiveness of BP ………………………….. 05
(6) Differentiation …………………………………………………………………………………………………………. 06
(7) SWOT analysis of BP …………………………………………………………………………………………………. 06
(8) BP’s experience in crafting business strategies …………………………………………………………. 07
(9) Vertical Integration …………………………………………………………………………………………………… 08
(10) Foreign market entry strategies of BP ………………………………………………………………………. 08
(11) Investment entry of BP as an marketing strategy ………………………………………………………. 09
(12) BP Joint ventures ………………………………………………………………………………………………………. 09
(13) BP Mergers and Acquisitions ……………………………………………………………………………………… 10
(14) Gulf and Mexico Restoration and financial states of BP ……………………………………………… 11
(15) BP Germany ………………………………………………………………………………………………………………. 11
(16) Business segmentation in German market ………………………………………………………………… 12
(17) Target market of BP Germany ……………………………………………………………………………………. 12
(18) Positioning BP products in German Market ………………………………………………………………. 13
(19) Marketing Mix of BP Germany ……………………………………………………………………………………. 13
(20) SWOT analysis of BP Germany ……………………………………………………………………………………. 16
(21) Conclusion …………………………………………………………………………………………………………………. 17
(22) References ...................................................................................................................... 19

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BP (British Petroleum Company Public Limited)
BP is UK registered oil and Gas Company. In terms of its revenue, this is the third
largest oil and gas company in the world. It is also the fourth largest company in the world.
Company has diversified it’s products in to almost every area of the global oil and gas
industry. In other words the company has vertically integrated. Now it is in over 80
countries. When we consider the vertical integration, we find BP is in the business of
exploration, refining, marketing, petrochemicals, power generation and even trading the
products and the services. BP has further extended it’s product portfolio even towards
renewable energy such as wind power, solar power, bio fuels and hydrogen. (www.bp.com)
British Petroleum Company is producing around 4 million barrels of oil in all over the
world. Over 22,300 petrol stations are run by the company. BP America is the largest
division of the company. Gulf of Mexico restoration tarnished the public perception of the
company towards their environmental and safety measures. BP has also been the first
company among the world oil industry which has taken initial steps to prevent the climate
changes. In fact they made the public awareness about necessary steps to be taken against
the on-going climate changers. (www.bp.com)
Company has been listed in the London stock exchange as well as New York stock exchange.
In 2010, the company has over 79,000 employees throughout the world. In the same
year, the company revenue was US $ 308.9 billion and it’s total assets were over US $ 272.2
billion. (www.bp.com)
Market segmentation, targeting and positioning of British Petroleum
When we critically analyse the products and the services of the company, it has not
segmented any particular market to target their products and services. Because when we
look at their product portfolio, they have been involved in every part of the business and
targeting the mass market. According to the BP website, basically they are in petrochemical,
power generation and renewable energy industry. In other words, ultimately they are
mainly targeting the individual and industrial buyers of petrochemical industry, individual
and industrial buyers of power as well as those who are using renewable energy such as
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wind power and solar power. On the other hand since everybody is directly or indirectly
using energy in their day to day life, approximately all the energy users have been
segmented and targeted by the company.


\






KOTLER,P. et.al. (2001)
Positioning of BP
BP has positioned the company in very deferent way in comparison to the other
global companies in the stream of oil and gas or energy industry in the world. BP is often
making noise about on-going climate changes as well as security of energy supply. Obviously
it is the one of the largest company in size. On the other hand it has become the most
consistent profitable company in the world. BP involves in the arena of core oil and gas
through its innovative development of cleaner products and low sulphur fuels. Since last
few years, BP has been investing renewable energy industry. Now it has become the prime
generator of solar power. At the same time BP is making grate noise about alternative
energy throughout the world. Most recently company has found the most innovative
internal emission trading system. BP is spending most of their increasing technology budget
for innovation. The enormous attention to the innovation of the company is proving them
as an Innovation Leader in the industry.
Market Segmentation

Individual and industrial
petrochemical and energy
consumers throughout the
world





Market targeting

Tailoring the needs and
wants of the target
audients more effectively
than the competitors





Market positioning

Develop the positioning
towards each and every
target audient through
the marketing mix





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Apparently BP is positioning them as the Innovation Leader in the global market.
(www.INNOVARO.com)
Competitive Advantage of British Petroleum within the stream of oil and gas
industry
Modern companies are achieving the competitive advantage in various ways in order
to prioritise their products or services within the target audients. Apparently just the
promise does not generate the strong position to the product or service. Companies should
enhance their positioning by delivering the promises to the customers. If they promise
quality service or the best product, they should deliver the expected quality to the target
audients and focus the perceived value towards their products. Obviously the positive
perception of a product or brand inherits the perceived value of the same within the
customers. To reach the mention qualities, most of the companies use the competitive
advantage. They do differentiate their product and services to capture the more market
share for them than the competitors.
KOTLER,P. et.al. (2001)

When we consider the BP, they hold the unique position within the industry as a
leading supply and trading company. Main two functions of the company such as IST and
DCT has generated this competitiveness. IST stands for integrated supply and trading
process of BP. DCT stands for digital and communicational technology process of the
company.
Basically the mentioned integrated supply and trading process of the company
involves in encompassing crude oil and oil product, chemicals, natural gasses and even
financial and shipping process of the company. From the integrated supply and trading
process, BP is getting the advantage of vertical integration. This process maximise the
hydrocarbon flow throughout the BP’s value chain. In other word, the company distributes
the upstream supply source within the downstream consumers.
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(www.bp.com)
Digital and communicational technology (DCT) optimises the productivity of
integrated supply and trading process of the company (IST). Growth of IST always depends
upon the DCT of the company. Ultimately DCT and IST enhance the British Petroleum’s
highly competitiveness within the global energy market. (www.bp.com)
Porter’s Generic competitive strategies and Competitiveness of
British Petroliam
Competitive advantage
Low cost Differentiation

Broad Target
Competitive Scope

Narrow Target

POTER,M.E.(1985)

Cost Leadership
Cost Leadership stage describes the advantage of becoming low cost producer in
the industry. Cost advantage depends upon the structure of the particular industry. If any
company can achieve the position of cost leadership, it will be mostly above average
performer within the industry. POTER, M.E.(1985)

(1) Cost
Leadership
(2) Differentiation
(3)a Cost Focus
(3)b Differentiation
Focus
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Differentiation
If a firm try to become unique among the industry and which is valued by the
target audients, such a company focus the stage of differentiation. On the other hand, the
firms uniquely position them among the customers. Obviously these companies easily can
go for a premium price for their products and services due to their uniqueness.
POTER,M.E.(1985)
When we apply the potter’s generic competitive strategies to British Petroleum,
the company differentiate their product and services as well as maintaining the cost
leadership within the global energy market due to their enormous uniqueness. TST and DCT
have created the uniqueness of the company. This Uniqueness has enhanced the
Competitiveness of the “BP” brand within the industry.
(www.bp.com)
SWOT analysis of British Petroleum
Strength of BP
(1) According to the global rankings, BP has been ranked as the world third largest oil
company. On the other hand, it has been positioned as the multinational oil
company in the world.
(2) BP has the very strong brand loyalty within the global oil market.
(3) BP is participating in London stock exchange as well as New York stock exchange.
(4) Enamours brand management.
(www.bp.com)
Weakness of BP
(1) Increase the petrol prices in UK.
(2) Explosion of BP refinery in Texas’s in 2005 and killed over 100 employees.
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(3) Criminal charges due to oil spillage in Alaskan tundra in 2006.
(4) Gulf of Mexico restoration tarnished the public perception of the company.
(www.bp.com)
Threats of BP
(1) Oils spills related environmental issues
(2) Often refinery explosions.
(3) Sale if co-operate petrol stations
(4) Rising oil prices
(5) Competition from Chevron and Shell
(www.bp.com)
Opportunities of BP
(1) Over 8 billion USD investment upon renewable energy programs such as wind and
solar.
(2) Joint investment with Russian oil company
(3) More flexible price policy makes them competitive among rivals such as Shell.
(www.bp.com)
BP’s experience in crafting business strategies
Mainly BP has been using their integrated supply chain and the defensive
foreign market entry strategies to enhance the business and marketing operations
throughout the world. Basically to strengthen the integrated supply chain, company
implementing the vertical integration as a strategy. Apart from the mention main two
strategies, BP is constantly gaining the competitive advantage due to their uniqueness.
Company has diversified their range of products and services throughout the world.
Geographically company has expanded their business all over the world. BP has flexible
pricing strategy. Through vertical integration, company obviously minimise their overall cost
of the products and the services. As a strategy, BP use to sell their co-operative business
unites in certain situations such as on-going situation in Pakistan.
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Vertical integration in British petroleum
This is a common strategy within the microeconomic and the management. On
the other hand, this is a process of management control. In this situation, vertically
integrate companies come under a single ownership. Mostly each and every company of the
vertically integrated supply chain is producing deferent products but towards the common
need. These products are apparently combining each other. KALEGAMA,S.(2005)
BP is involved in encompassing oil and oil products, natural gas, power,
chemical, finance and shipping industry. Even though the outputs of these industries are
mostly deferent, all the companies are going for a common goal under the brand BP. These
inter related group of companies enhance the integrated supply and the treading process of
the Company with the help of their digital and super communicational technology system.
Due to the vertical integration, Company can provide the flexible price as well as
comprehensive service to their customer than the competitors.
Product diversification of BP
Initially BP was in oil and oil related industry in the world. Since last few
decades, they have diversified the business in to several areas such as Natural gas, power,
chemical, finance and shipping industry.
(www.bp.com)
Foreign market entry strategies of British Petroleum
As a market expansion strategy, BP is using the Incremental Approach. BP is
using various approaches to gain the market share in deferent countries throughout the
world. Mostly the company is following Incremental Approach to spread their business as
BMW, General Electric and Body shop. According to this approach, BP is selecting foreign
markets, one after another, once it stabilised in a one market, goes to another market or a
country by using relevant market entry strategies. BP is doing business comfortably even in
world most emerging markets such as even China and India due to their tactical market
entry strategies. ROOT,F.R.(1994)
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When we consider the BP’s foreign market entry approaches, we do find
various strategies that they have used to enter the markets. Basically in this process, BP has
used Export Entry through direct and indirect export methods to gain market share for their
product and services in certain countries.
(www.bp.com)
As a second mode of market / foreign market entry strategy, BP has used
Contractual Entry Strategy. There are several sub categories in this method such as
Licensing, Franchising, Management contracts and Counter-trade agreement. Among those
sub market entry strategies, BP has used Franchising to develop their business in Australian
market. They have franchised retail out lets in every part of Australia.
ROOT,F.R.(1994)
Investment Entry of BP as a market entry strategy
BP has often used the above market entry strategy to spread their business in
most of the countries in the world. There are sub categories under the above strategy such
as Joint venture and strategic alliance, whole-owned subsidiary, Mergers and Acquisition
and Foreign production. Mostly BP has used the mode of Joint venture, Mergers and
Acquisition under this category in certain countries to developed their business.
ROOT,F.R.(1994)
BP Joint ventures
In this situation BP shares in the ownership of an enterprise in a target country
with local, private or public interest. They have strong joint ventures in India and Algeria. In
India, Company has a joint venture with Reliance for sourcing and marketing gas in the
Indian market. In Algeria, BP is ventured with Salah Gas to source dry gas and with Amenas
to source gas within the country. (www.bp.com)


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There are several reasons made BP to take the mentioned steps to expand their business in
those countries such as;
(1) In those countries, there are discouragements of sole ventures by the respective
governments to protect the local business and the resources.
(2) Joint Venture has become the best investment mode since the respective
governments prohibited the sole ventures in their countries.
(3) Local partner’s contribution enhances the productivity within BP, since they are
contributing capital, knowledge of the local country and the marketing skills.
ROOT,F.R.(1994)
BP Mergers and Acquisition
BP has used this strategy to develop their business in Angola and Pakistan.
The company has merged with Amoco in 1998 to oil and gas exploration, development and
production in Angola. Angola’s wealthy hydrocarbon resources attract the foreign investors
to the country. Angola has become the BP’s 6
th
new profit centre in the world. Even in
Pakistan, BP has an Acquisition with Pakistani Occident Petroleum Cooperation to promote
their business in the country.
(www.bp.com)
Why BP has used the mode of Mergers to enter the Angola to develop their
Oil and Gas business?
(1) Within short period the company can gain income.
(2) This has been the fastest start in the foreign market.
(3) Sources which BP finds in Angola scares in the other countries in the world
ROOT,F.R.(1994)
BP’s partnerships with foreign oil companies
BP has partnership entries in Egypt with Egypt general petroleum cooperation
and South Africa with Shell.
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Partnership mode of marketing entry has been taken by BP in mentioned markets to enter
the respective countries within the regulations of their ruling authorities.
(www.bp.com)

Gulf and Mexico Restoration and the financial status of BP
Since last few decades, BP’s revenue and the profit has been constantly grown
up. It has shown recorded higher revenue in 2010. It is over 308,000 million USD. In 2009, it
is over 246,000 million USD. In 2009, the company recorded the profit of 26,426 million
USD. Only 2010 it has shown a loss of 3,702 million USD. This has been only due to the Gulf
and Mexico Restoration. But since then in 3
rd
quarter of 2010, the company has returned to
profit. It is 7.7 billion pre-tax. This profitability proves the company’s rapid recovery from
the disaster of Gulf and Mexico. This situation is generating the re-build confident within
the general public. In fact, the improving financial condition proves the suitability of
company’s on-going business and marketing strategies.
(www.bp.com)

BP Germany
Germany is the largest petroleum market in Europe. In one hand, this has
become the most important petroleum market for BP. On the other hand, this is the most
profitable market since 2005 consecutively. BP Germany is the number one in many
segments in the market. Normal business activities of the company have been increased
nearly 100% than the projected figures since the beginning of 2004 to date.
In spite of the very general optimistic atmosphere, Petroleum business of
Germany is very defensive. Due to the extreme competition, price has to be kept very low
and competitive to combat the rivals in the market. Often, the company has to keep lowest
retail station prices in Germany in comparison to the Europe prices.
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Business Segmentation of BP Germany











BP has segmented their business and marketing strategy in to four different
areas in Germany. According to the above diagram, Exploration and production, Gas and
power, Renewable energy and Refining and Marketing segregated simultaneously in
Germany.
Target market of BP Germany









Exploration and production
Gas and power
Renewable energy
Refining and Marketing
Authorities of German oil rich
areas
Industrial and individual
consumers of Gas and power in
Germany
Industrial and individual buyers
of green energy
German government
Business Segmentation
Target Market of BP
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As per the above diagram, BP’s target market is changing according to their
deferent marketing segments in the German market. In Exploration and production, they
are targeting the authorities of Germen oil rich areas. Because, there are several other
companies involve in local Exploration. When they full fill the need and the wants of the
respective local authorities, Company is more likely to capture the market other than the
competitors. (www.bp.com)

Likewise, in Gas and Power, company is focusing the industrial and individual
buyers or the consumers comparatively. When it’s come to renewable energy, Company is
focusing the industrial and individual buyers of green energy. In the final segment, company
is targeting the Companies involved in the refining and marketing activities of the segment.
(www.bp.com)

Positioning BP products in German market
Price
High

Quality High
Low






Low
ARAL
CASTROL
BP
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According to the above diagram, British Petroleum positioning their brand in
German market as higher price and higher quality products. Even in the down turn of
German automobile industry, ARAL and CASTROL manage to save their higher positioning as
premier brand still in the German market. BP is also positioning as premier brand but
comparatively lower than their other two brands of ARAL and CASTROL. This has been due
to the price war in oil industry of the country.
(www.bp.com)
BP has positioned premier as well as most ethical brand in German
market
Beyond the commercial operations in Germany, BP is actively involved in
climate change, social and economic development activities in the country. BP is going
beyond minimising own emission towards support and development of new cleaner energy
programs in the country. As an alternative energy, BP is actively working to generate and
market low carbon power throughout the country. BP is working to enhance the
government revenue in the country as well as to eradicate the unemployment of the
country.
(www.bp.com)
Marketing Mix of BP Germany




KOTLER, P.and AMSTRONG, G. (2004)
According to the above diagram asKOTLER, P. and AMSTRONG, G. (2004)
explains, 4P describe the marketing mix of any product of service. It is consists of Place,
Product, Price and Promotion. 4Pcs of BP is described bellow;
Marketing Mix
Place
Product
Price Promotion
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Place (BP selling points in German market)
 BP own retail stations
 Franchise retail stations
 Private own shops which sell Castrol and Aral in Germany
 Internet (Castrol and Aral can be purchased even via internet)
(www.bp.com)
Price (Price of BP Germany)
In Germany, mostly the products such as Castrol and Aral which is under the BP
umbrella are prices as a market leader. On the other hand, higher quality and the higher
price have been used to position the product as a market leader in the country by the
company. But oil prices are fluctuating in the market due to the high competition.
Product
BP has basically several products in the market. By name, BP, Castrol and Aral
are the market. Apart from these products, company has oil, gas and renewable energy such
as Solar and wind power.
Promotion
 Visual merchandising
 TV advert
 Sponsorship in Climate changing programs and other social related events within
the Germany
(www.bp.com)



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SWOT ANALYSIS OF BP GERMANY
STRENGEHS
 Innovative products (Castrol, Aral and renewable energy)
 Strong domestic market knowledge in Germany
 Reputation in German market as an ethical brand
 Mass manufacturing
WEAKNESS
 High competition in German oil market
 Explosion of BP refinery in Texas’s in 2005 and killed over 100 employees.
 Criminal charges due to oil spillage in Alaskan tundra in 2006.
 Gulf of Mexico restoration tarnished the public perception of the company.
OPPERTUNITIES IN GERMAN MARKET
 Extending product lines ( Oil and gas, renewable energy and other oil and gas
related product)
 Government support (Since BP is involved in climate changing, carbon emission
and social beneficial projects in Germany, company is getting the government
support for their business and marketing process throughout the country
 Customer loyalty within the German market
THREATS
 Highly competitive German Oil market
 Oils spills related environmental issues in the other countries in the world
 Often refinery explosions out of German.
 Selling some petrochemical activities to another German Company called INEOS
group.
(www.bp.com)

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CONCLUSION
BP is one of the most successful UK registered global company. As we seen the
above strategically analysed company’s global and particularly German performances show
the stabilisation of the company even in the on-going economical down turn. Initially the
company has been started to involve the global oil market. But as a strategy, the company
has diversified their product range successfully even towards the generation of renewable
energy in the global market. Just to fulfil the requirements of the question, in this study, I
have critically analysed the Company’s strategic movements in the Germany. Even though
the question is demanding to specialise the answer to a one international market, in this
study, I had to consider the global business of BP due to several reasons such as;
 To highlight the overall business and marketing strategy of the company
 To analyse the overall strength and the weakness of the company
 Critically analyse the foreign market entry strategies of the company

Basically, Company’s market segmentation, targeting and positioning are more
or less similar in the global market as well as Germany. But BP’s product mix in Germany,
new products of the company such as CASTROAL and ARAL are taking important position in
the market. According to this study, BP has position them as an Innovative market leader in
the global oil and gas related industry. But they have positioned CASTROAL and ARAL as a
premier product in the German market and overall BP as innovative energy company in
Germany. Furthermore, the company describes them as ethical marketer in the Country.
BP’s social contribution in Germany is enhancing this positioning within the country.

According to this study, I can provide few recommendations to the company
to enhance their business in Germany as well as globally more competitive than their rivals
such as Shell.


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Recommendations are given bellow;
(1) Company should accelerate their renewable energy project in Germany as well as
globally. Because, oil resource of the world is limited only for few decade.
(2) Company should move their ethical marketing concept beyond the German
market to capture global ethical market share.
(3) Company should involve more in the projects like climate changing, green energy
and supporting youth to enhance their employability to change the tarnished
public perception of the company after the Gulf and Mexico exploration.
























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