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Swot and Pest Analysis of British Petroleum

Essay by   •  March 17, 2012  •  Case Study  •  810 Words (4 Pages)  •  4,467 Views

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SWOT and PEST Analysis of British Petroleum

Contents

BP (British Petroleum) 3

SWOT Analysis 3

PEST Analysis 4

Conclusion 5

References 6

Background

British Petroleum (BP) was first established in 1901. Since its establishment BP had been expanding on a global scale. Such expansions enabled BP to service, diversify and supply a variety of customers. To date BP are leading global suppliers of gas, oil and chemicals. BP have launched a number of campaigns and introduced renewable and low carbon energy usage throughout the world (BP, 2010).

SWOT Analysis

Strengths Weaknesses

* Dominant Market Position

* Wide geographical Presence

* Strong Brand Management

* Operates globally using its own network of subsidiaries

* Exponentially increasing yearly profits * Decline in crude oil and natural gas production

* Controversies and Criticisms

* Increase in petrol prices in the UK

* Explosions and spills always weaken public image

Opportunities Threats

* Increasing demand for natural gas

* Demand for refined products on the increase

* Oil and Gas exploration projects

* Investment in alternative energy projects

* Launching of a flexible pricing policy

* Expansion of strategic oil and gas acquisition in the North Sea Area * Saturation of resources in the north sea

* Instability within some oil producing regions

* Environmental regulations

* Lawsuits relating to company's ecological activities

* Competition from rivals i.e. Shell

* Corrosion in pipelines

* High risks of Refinery Explosions

Even today, BP exhibits long term sustainability and potential for progress despite its weaknesses and threats. The decline in crude oil and natural gas extraction, for example the saturation of resources in the north sea, has already been anticipated by BP through their research into alternative fuels campaigns (BP, 2010). Controversial debate and ongoing criticism regarding BP's activities will never cease so as long as BP is associated with activities impacting the planets environment. To overcome negativity BP have always faced the public and media giving re-assurance and compensating where necessary. The recent explosion in the oil well in the Gulf of Mexico was devastating to BP's image. BP has worked with the US senate to compensate those affected and recover from the disaster by stopping the oil leak (BBC, 2010). The past five years the UK population has seen increasing fuel prices due to increased government taxes and inflation. This affected BP's sales revenue in the long term, however the 2010 government budget announced a freeze on fuel tax duty. This would help BP maintain stability within its anticipated sales revenue (This is Money, 2010).

Threats such as socially unstable regions where oil is produced are difficult to overcome. BP no doubt already has campaigns in place locally in conjunction with local governmental agencies to allow awareness building and to assist with risk evaluation which concerns its employees and its

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