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Todayµs world is the world of technology. We need more energy sources as we go for further development. The government¶s primary motive clearly does state that till 2020 the consumption of oil should be 70%. According to Jennifer, (2010) there is 25 billion barrel of crude oil still to be drilled in the UK oil industry. This deepwater oil allows us to contribute at least 70% of total energy from crude oil and gas. This industry is the main pillar of the UK economy which worth of the total expenditure of 12 billion pounds with extreme engineering and technology. The sector has around half million jobs in 2008. These employees are working with world leading supply chain of the UK oil industry that has a 13 billion pounds turnover, exports the goods and service for 5 billion pounds per annum, throughout the world. But, to survive in the oil industry the organizations, for instance BP Plc, Shell etc, have to analyze the external environment to remain in the completion and make the new strategies with the time. As we know there are many factors that affect the firms directly as well as indirectly which are beyond the control, so firms mostly carry out the PESTEL analysis so that the risk can be minimized and thereby profitability can be maximized (www.euromonitor.com). The macro-environment sets the limit for any organization because as mention above it is always beyond control or in other way this environment controls the organizations.
Macro environment Macro or external environment give a clear picture of the concern industry. It does help with a clear picture of all the various factors existing in the macro environment. For instance these factors are political, economical, socio-cultural and technological. These factors vary time to time and affect the concern industry directly. (Jack, 2007)
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In 2010 there is a 20% decrease in investment in the oil industry since last 2 years which was 6 b to 4. The International Energy Agency decided to cut down 0. For instance. These regulations would consist of the new laws for drilling the oil with safety and security. (Watson. The biggest factor is the global economic crises which created imbalance between purchasing and saving which was mainly due to the increase in the inflation rate that is from 4. 2008) Social factors:Change in trend and taste of the customers does affect the industry in a direct or an indirect manner. (Stephen.5% to 5%. Gordon Brown declared 10% extra tax on the profit in order to raise capital for the oil companies. the last UK Prime Minister Mr. Tendency of 2|P a ge .5 m barrels crude oil production everyday due to decrease in demand in order to control the price. During the economic crisis crude oil price decreased to 55% since January 2008. During this period the consumption of the oil decreased by 2% and leads to price downward.(bbc. According to the survey more than 70% women are working. 2010) .uk 2009). The European Union also makes the new regulations which will be affective from 2011. These regulations are concern with oil split due to the Gulf of Mexico.4 b till 2009. but as mention above the trend of the people is to more save not to spend more. The tax rate varies from 50% to 70% which was totally subjective to the organizations size.External environment of oil industry Political and legal factors: Change in the government does have a direct affect on the organizations. According to UK budget 2009 there will not be any 3 year tax loss carry back period which was a relief for the organizations as the tax rates were very high. Economical factors:The economic factors are also very important. It will lead an extra burden on the organizations.
COP and Shell. (Koottungal. The cost of the project was £187k. drill process. EU has targeted the carbon emission too. For instance the new technology. Environmental factors:Government is very aware about environment in recent years. opportunities and threats which exist within the organization. These laws will be relating to oil spill. The analysis of internal environment of BP Plc is below:Strengths:- 3|P a ge . In January 2010 sub surface sediment imagery cameras were launched with hydrocarbon sensors that detect the background water quality. So the demand of the fuel is reduced by 2% in 2009. The new alternate of cement which has been launched does safe a lot of time and is also durable. (bbc. weaknesses. 2009) Part B Internal environment of British Petroliam:Internal environment means. which is based on remote electromagnetic sensing system provide a clear 3d model of the underground crude oil which is a cost saving technology. 2009) Technological factors: These factors are related to advanced technology. According to Budget 2009. the oil companies have to pay 20% of their carbon emission till 3013 and this amount will increase by 70% in 2017. The new underwater cutting technology launched in 2009 by BP. 2007) than the traditional electric cutting technology. requires low power and the cutting capacity increases by 100% (Manama. The main focus would be on the climate damage by oil spill because it was the biggest disaster accrued in the Gulf of Mexico.uk. European Union is going to introduced new law and regulations in 2011.co.saving encourages the people to use public transport rather than personal vehicles. to examine strengths.
The company is the biggest oil producer in the world with 2. The justice department of the USA also states to investigate against oil split in crime as well as in civil. The BP has 22400 sites worldwide operating with the brands like.BP Plc is the market leader in the oil industry.53 m barrel of oil and 8. The Air BP is the largest fuel supplier to the aviation industry including Asia and partly China. (Crain. 2007) Weaknesses:Oil spill in the Gulf of Mexico:. The US government examined in June 2010 the spilt oil well pushes the oil on water surface 35000 to 60000 barrels per day which has adverse effect on the marine life. With the upstream operations it produces oil and gas from the underground. As a global prospect BP is the biggest producer of oil and gas in North American continent.BP Plc is linked with the biggest environmental disaster in history of USA when the oil was split in the gulf of Mexico. 2010) 4|P a ge . Datamonitor. BP Plc operates it¶s ail fuel supply in 64 countries with 25 b liters sales in a year. America. Amoco. Middle East and China. (Bp.(Datamonitor.BP operates its operations in two segments which are exploration and production. BP. The explosion in the BP¶s drilling well killed 11 workers. 2009) Vertically integrated operations:.com. So BP announced to pay for the loss which is around 20 billion USD. and refining and marketing.com) Wide geographical hold: .Market leader: . (O'Connor.48 cubic feet gas production per day. the PB Plc operates its refineries and marketing which makes the organization unique. the midterm streams is related with management and ownership of the oil and gas and the pipelines and transportation. So the BP Plc is not depending on a particular country. Even though it affected the fish industry in the USA. ARCO and Aral. The company has a strong hold on the market.The Company has reached around 80 countries which the biggest energy market like Europe. The last stream which is downstream.
The US justice department made the criminal compulsory agreement with BP explosion and fire.3 gallon.There was another explosion in the Texas in march 2005 where 15 workers died. (Datamonitor.com) Investments in other energy projects:. Canada that could lead to 500 m USD revenue. 2008) Violation of tax laws in Turkey:. (Paul. This acquisition will open the door to drill the crude oil in the ten exploration blocks in Brazil. In the economic crisis it is a shock for the BP Plc. seven in the prolific Campos basin and in the US Gulf of Mexico. After this acquisition BP will have 50% stake in Kirby oil in Alberta. (Kristen. BP discovered 17th oil discovery in the deepwater of Angola. because BP transported its duty free petrol from Turkey to Greece. Azerbaijan and Gulf of Mexico. Later in 2009 BP discovered crude oil storage in the Gulf of Mexico.BP states in 2010 to acquire the Devon Energy¶s assets in Brazil.BP also invested in other means of energy like wind.Many of the projects proved to be failure for the BP.Explosion in the Texas refinery:. Hence the dependability of the business could diversify. For example in February 2009.BP wants to make its portfolio strong. For instance some African and Middle East regions. In addition BP will have chance to use 150 m USD asset that belongs to Devon Energy. 2010) Opportunities:Acquisitions: . 2006) New oil and gas projects: . it was forced to pay fine because of operating cross border business activates without paying tax. Turkish Finance minster stated that the amount of the petrol was145.During its business operations in Turkey2009. solar power advance bio-fuels and low carbon energies. (Evans. (Sao 2010) Threats:Failure in some projects:. The main reason of the failure is failure 5|P a ge .
The company¶s market share has declined hence BP is a target for the big companies for its acquisition like Exxon Mobil and Cheron. has to face different environment regulations according to the various country. the organizations make their strategies to remain in completion. as a multinational company. 2008) Part C Ansoff Matrix and BP Strategic options:After analyzing macro and internal environment. (Schwab & Alex.693 million and Chevron had 8. It also answers the question that how the organization can diversify itself? Ansoff matrix model analysis of BP Plc is on next page:- 6|P a ge . To make these strategies. Because in 2009 Exxon had 10. 2009) New environment regulations: . Any of these companies could propose the acquit ion for the BP. Ansoff matrix model provides a clear direction regarding the growth strategy. It gives a clear picture about market and product development. As EU is aware about omission of the CO2 and that is a threat for the environment. organizations use various kinds of tools.BP.BP is facing a threat of take over due to the financial damage by the oil split in the gulf of Mexico. (Bbc. ( Macdonald.716 million cash reserves.co. 2009) Threat of take over:.to understand the requirement of the local environment including political risk.uk. The coming environmental regulation 2011from European Union could lead to change in company¶s strategies.
Making excellent location of felling station worldwide. Discount scheme. followed by CEO of BP Tony Hayward. medium size households in California.com/lesson-store/lesson-ansoff. Bio-fuel. This is the alive 7|P a ge . Price is set different from the competitors because of price reduction the organization retains the customers.html) Market penetration:- Organizations promote their existing product in the existing market in market penetration by different price and promotion strategies.Existing product Existing market Market penetration CEO Tony Hayward. in and (http://marketingteacher. Solar energy Entering telecommunication cabal network in USA. The main aim of market penetration is to extend the market share and pushing back to the competitors¶ by adopting different pricing and promotion strategies. The new advertisement is starting with simple street pedestrians¶ interviews. ConocoPhillips etc. if the pay in circulation throughout the year then they have to pay 49% less than the customers of competitors like Transocean. New market Market development New Sudan market in Diversification Libya. New product Product development Ad by street interviews. and wind energy. For example. BP¶s new advertisement campaign is different from other organizations like Shell.
BP is also conducting survey and taking legal information for its operations in Sudan. This strategy provides the competitive advantages for the organizations. This discovery opens the door of Sudan and Libya for the BP. If BP starts its business in Libya and Sudan. because the 80% of energy are consumed from fossil fuel According to BP the wind energy market is growing by 30% every year. BP has invested $1. For example. Involving other market penetration activity.For the development of the market. BP changes its fuel stations location in New Zealand and Austria. For instance BP is more focusing on bio-fuel. BP is more focusing the locations of the fuel stations. A survey conducting by International Energy Agency stated that the renewable energy sources like bio-fuel. In other words. To increase the shopping visitors BP Plc. (Carl. The cost is also reducing by these activities of banding. BP in USA. organizations seeks to sell their existing product in the new market. Because the export duty on Egypt is 12% which is comparatively low and the due to less distance. (Keith. and wind energy. to drill and to sell. Wind energy is to be considering the future energy. As BP¶s R&D program researched that there will be 150% increase in wind power by 2015. The main aim to adopt this strategy is to widen its customer base and growth. changes the name of its fuel station to give independency look which is Beyond Petroleum (BP). Sainsbury¶s and Barkley issued nectar cards.example of the product promotion which is called market penetration. (2007) Market development:. Discount cards of BP are also recently launched in various countries like Australia. For instance BP has recently discovered crude oil in the deepwater West Nile Delta in Egypt. The main aims of the focus on these energies are low cost and low carbon emission energy. wind energy etc would be the future of the energy. the transportation cost also will be lower.5b in the bio-fuel project. extension of the market size geographically. New Zealand which gives all the information about monthly purchases and discount of 1c on per liter fuel. then there is a complete hold on the African market where the company drills the oil and 8|P a ge . Although Libya is the highest crude oil exporter in the African continent but BP has sufficient capabilities to operates its business in Libya. 2006) Product development:When organizations launched a new product in the existing market is called product development.
The aim of diversification is to retain profit from the new industry to overcome the loss of economic crisis and the Gulf of Mexico. µPB Market Shows Effect of Megabank Acquisitions¶. 20(17). (2010). 17-19. µBP's 'Beyond Petroleum' positioning becomes toxic in wake of Gulf oil spill¶¶. BP announced to invest $10m every year in solar energy sector.000 barrels per day. According to data monitor (Docherty 2008) the market of solar energy. p171-172 Evans J (2006).16 Jack J. BP is now entering in the telecommunication and cable industry in the USA. (1996). Arkansas Business. BP has to pay fine which is $35m to the USA government.co. David M.com.sells it the costumers. µIncome: a global opportunity¶. especially when a firm enters in the different industry. (2006). Investment Week. 2010. (BBC.uk. ( 2007). Another diversification activity of BP is solar energy. The new oil discovery of 80m barrels in Egypt. Apart from the fine it also has to pay for the fish industry which is directly affected by the oil spill. In other words BP is minimizing the risk one industry going to loss and the other business of the company can cover up. P8 9|P a ge . µMarketing¶. 1 (2). would grow 50% till 2040. R. Bp. Docherty. (2010). it is estimated that BP¶s overall production will increase by 50.Diversification is concern with the new product and the new market. 2009) Diversification: . Euromoney. PR Week. p7. µA handbook for the digital engineer¶. 2 Crain. µBP's calculated risk to get to the Top¶. Because of the oil spill in the Gulf. References:Carl D H. S.
(2008). p11 Schwab N. Oil & Gas News. 9 (2). p. P3 Watson. C. Paul B.stm (accessed on 28 Nov. Valor Economic . operators eyeing effects of synthetic-based drilling fluids¶. 2010) 10 | P a g e . µGovernments. p1719. (2007). p15.uk/1/hi/business/5325788. µBP goes for an alternative strategy¶. (2007). (2006). p88-90 Sao P. Modern Power Systems. p5 Liz P.4 http://marketingteacher. McClatchy Tribune Koottungal. B. (2007).com (accessed on 22. µBG banks on Brazil and LNG¶. L. 1 (1). (2009). 26. 1 (1). (2007). Stores. (2008).co.29 Nov. µBP's Devon-assets acquisition makes perfect sense¶.Jennifer A. operators eyeing effects of synthetic-based drilling fluids¶. Wireline. Wall Street Journal. McClatchy Tribune Business News . (2009). Vol 6 . µBP restructures combs ahead of Hunter's exit¶.co. Oil & Gas Journal. 2010) www. 34. µBrinker achieves industry accolade¶. (2008). Oil & Gas Journal. (2009). µCorporate News¶. 6 (4). D.html (accessed on 1 Dec 2010) http://news. Journal of management. p16. Stephen J S. 66-68 Manama. µNectar Finds Loyalty's Sweet Spot'.bbc. Petroleum Economist. 1 . µA handbook for the digital engineer¶. µBP's Texas City refinery to run at full tilt soon¶.uk/news/10298342 ( accessed on 26 Nov. p7 O'Connor. Kristen H H C. µGovernments.bbc. July 1.bp. (2010). Macdonal J. Keith . 2010) http://www.com/lesson-store/lesson-ansoff. µSpill panel leader says oil industry was complacent¶. PR Week. (2010). µParliamentary Update¶. 15. & Alex D.
com (accessed on 17 Nov.com (accessed on 18 Nov.www. 2010) 11 | P a g e .euromonitor. 2010) www.datamonitor.