BP p.l.c.<br />2009 <br />
About Us<br /><ul><li>Main business activities:
Exploration and production
Refining and marketing
Distributing of Energy
BP Alternative Energy
Products:  petrol, diesel, maritime & aviation fuel, lubricants, bottled gas and gas for industrial consumers
BP Brands:
Third largest energy company in the world
Largest producer of oil and second largest producer of gas in the UK
B2B & B2C markets
Profit of $21 billion in 2008</li></li></ul><li>Environmental Analysis<br />
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BP Corporate Strategy Brief by Katerina Fernandes (University Assignment)


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BP Corporate Strategy Brief by Katerina Fernandes (University Assignment)
- About
- Environmental Analysis
- Industry Analysis
- Stakeholders
- Porter's 5 Forces
- Current Communications Strategy
- Communications Challenges
- PR Campaign Objectives

Published in: Business, Technology
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  • BP p.l.c. Corporate Strategy Brief
  • BP Plc. BackgroundBP is world’s third largest energy company, behind Exxon Mobile and Royal Dutch Shell. More in the competitor analysis. It operates in B2B as well as B2C markets.BP’s main products are petroleum products including petrol, diesel, maritime fuels and aviation fuel as well as lubricants for private, business and industrial users, bottled gas for domestic consumers and gas for industrial consumers. BP also supplies petrol and diesel to Safeway supermarkets in the UK. 22,600 service stations 24,600 retail outlets worldwide Nearly 100,000 employees 17 refineries Operations in 100 countries. For a full list of the countries where BP operates see: www.bp.com/in_your_area/a-z_directory.aspReferences:Nexis (2009) Hoover&amp;apos;s Company Records - In-depth Records, BP p.l.c. (November 3, 2009) Available at:http://0-www.lexisnexis.com.emu.londonmet.ac.uk/uk/nexis/results/docview/docview.do?start=1&amp;sort=BOOLEAN&amp;format=GNBFI&amp;risb=21_T7798985640Nexis (2009) ICC Keynote Market Reports (January 1, 2008) Online: http://0-www.lexisnexis.com.emu.londonmet.ac.uk/uk/nexis/results/docview/docview.do?docLinkInd=true&amp;risb=21_T7799579599&amp;format=GNBFI&amp;sort=RELEVANCE&amp;startDocNo=1&amp;resultsUrlKey=29_T7799592802&amp;cisb=22_T7799592801&amp;treeMax=true&amp;treeWidth=0&amp;csi=3728&amp;docNo=2 BP (2009) At Glance, Online: http://www.bp.com/sectiongenericarticle.do?categoryId=3&amp;contentId=2006926 BP (2009) Annual Report for 2008 http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/set_branch/STAGING/common_assets/downloads/pdf/BP_ara_2008_consolidated_financial_statements.pdf Corporate Watch (2009) BP plc. Available online at: http://www.corporatewatch.org.uk/?lid=713
  • In order to give the PR consultancy a clear idea of what business we are in and what are the macro environmental factors that are affecting the way we operate, we carried out environmental analysis. Political Factors:We operate in more than 100 countries so monitoring the political agenda in each of them is crucial to us. The situation could be very unstable and we have to foresee any potential threats. Economic Factors:The current economic climate is very challenging. The recession is affecting our business on global scale and it is essential to maintain BP’s leading position within the industry. Investments in Oil &amp; Gas production and the Infrastructure development are necessary in order to maintain competitive advantage of BP. Oil &amp; Gas prices has been on a steep rise since the war in Iraq in 2003. The existence of hostilities in the Middle East is for us a main cause for concern.Social Factors:Due to the increasing global awareness of climate change, we are devoted to maintain our image as a company that is concerned with the environment. With growing environmental concerns, the next phase of attention will focus on greater use of bio-fuel blends. The rising oil &amp; gas prices are causing concerns to the consumers, therefore the introduction of Energy Conservation is seemed as the logical future step. TechnologicalClimate change is a critical issue facing the whole of society, but it affects the energy industry in particular because of the high level of carbon emissions from traditional power-generation technology. Extensive efforts are being made to develop economically viable, safe and environmentally acceptable ways of reducing carbon emissionsRegulatoryThe introduction of new regulations such as: Renewable Transport Fuels Obligation (RTFO) in November 2005, EU Emissions Trading Scheme (ETS), licensing (by the UK Government), road pricing, etc. has made our business more challenging. We expect that new regulations will be introduced in the future and we need to make sure that we do comply with all of them.EnvironmentalClimate change is now a major issue with a negative impact on the EU oil and gas industry: efforts to reduce climate change by reducing the source of most ‘greenhouse gases’, i.e. oil and gas. Eight of the UK&amp;apos;s leading environmental groups have joined forces to urge political parties to adopt a joint approach on green issues. The EU oil and gas industry faces a challenge from alternative sources of energy: nuclear power is now being seriously examined as a source of near carbon-zero power generation.References:Keynote (2007) European Oil &amp; Gas Industry, Available online at: https://www.keynote.co.uk/market-intelligence/view/product/2011/chapter/33 Mintel (2007) Petrol, Oil and Antifreeze – UK, Available online at: http://0-academic.mintel.com.emu.londonmet.ac.uk/sinatra/oxygen_academic/search_results/show&amp;/display/id=220143/display/id=284625#hit1BBC (20009) Green groups urging joint action Available at: http://news.bbc.co.uk/1/hi/uk/8262173.stm Department for Transport (2009) Local Transport Act, Available online at: http://www.dft.gov.uk/pgr/regional/localtransportbillNexis (2009) ICC Keynote Market Reports (January 1, 2008) Online: http://0-www.lexisnexis.com.emu.londonmet.ac.uk/uk/nexis/results/docview/docview.do?docLinkInd=true&amp;risb=21_T7799579599&amp;format=GNBFI&amp;sort=RELEVANCE&amp;startDocNo=1&amp;resultsUrlKey=29_T7799592802&amp;cisb=22_T7799592801&amp;treeMax=true&amp;treeWidth=0&amp;csi=3728&amp;docNo=2
  • BP Competes in: Energy &amp; UtilitiesOil &amp; Gas Refining, Marketing &amp; Distribution, Oil &amp; Gas Exploration &amp; Production, Oil &amp; Gas Transportation &amp; Storage, Alternative Energy Sources BP is major refiner of oil for the petrol/diesel market and is a major player in the motor oil market with its Castrol and Duckhams brands. BP is a heavy supporter of its brands in both the petroleum and motor oil markets with particular attention on its fuels range in recent years. Here BP Ultimate is the main focus of attention. In the motor oil market, the wider Castrol brand is receiving a declining share of support with attention instead focused on its GTX Magnatec variant. BP is a major player in the LPG (Liquefied Petroleum Gas) market. It is the UK’s largest supplier of LPG and also has the largest number of sites offering LPG for vehicles (207 in 2006).ChemicalsBasic and Intermediate Chemical &amp; Petrochemical Manufacturing, Plastic &amp; Fiber Manufacturing RetailConvenience Stores &amp; Truck Stops, Gasoline Retailers. BP plc has adopted a strategy of investing in its forecourt retail offer. The result is a portfolio of over 1,200 shops as of December 2006. These operate under the BPConnect, BP Express and BP Shop fascias. Within its BP Connect stores, BP is developing Wild Bean Café in-store catering with 181 of these in place at the end of 2006. Castrol - is a brand of motor oil and other lubricants which is entirely a BP brand but tends to retain its separate identity. Air BP and BP Shipping - Air BP is the aviation fuel arm, BP Marine the marine fuels and lubricants arm and BP Shipping is the Shipping arm within the BP group. Top competitors of BP p.l.c.Oil and gas production: Centrica Plc (UK), Exxon Mobil, Royal Dutch Shell, Chevron Corp., Conoco Phillips, Total S.A.The petrol and diesel retail sector : Esso, Royal Dutch Shell, Total UK Ltd, Texaco, TescoBP Suppliers EU oil &amp; gas indigenous production decline means an increasing requirement for oil and gas imports. EU’s strategy to encourage a diversity of oil and gas supplies, through developing supplies from North Africa, Nigeria, Kazakhstan and Azerbaijan. By 2030, 90% of EU oil demand and 80% of gas demand will be met by imports. (Keynote Market Assessment 2007 European Oil &amp; Gas Industry)
  • Customers: UK population and retail services who use fuel for transportation, energy for heat and light, and petrochemicals products for everyday items. Employees: Approx 92,000 (at 31 Dec 2008)- Staff at BP are people with world-class capabilities, ranging from deepwater drilling and refinery operations to negotiating with governments and planning wind farms. They organize, manage and reward employees in ways designed to achieve the best possible performance. Number of shareholders are in excess of 1.2 million (as of 31 Dec 2008) Competitors: BP PLC competitors ARE: Centrica Plc (UK), Exxon Mobil, Royal Dutch Shell, Chevron Corp., Conoco Phillips, Total S.A.Owners: Board of Governors - executive and non executive membersInvestors: The board governance principles allocate the tasks of monitoring executive actions and assessing performance to certain board committees. Shareholders - Ordinary shareholders, American depository Shareholders. Investors use BP’s interactive charting tool to compare a wide selection of BP&amp;apos;s financial and operating figures on a quarterly or annual basis The environment and community: BP’s success depends on their ability to create tangible benefits from their presence and gain the support of local communities. To do this, they take action that is relevant to local circumstances, mutually beneficial and designed to create enduring solutions, as opposed to short-term fixes. Strategies include encouraging enterprise, giving volunteering, supporting economic growth, safeguarding human rights, developing a community and considering public health. Environmental Groups: Green Alliance, Friends of the Earth, Woodland Trust, WWF, Wildlife Trusts, RSPB, Campaign to Protect Rural England, Greenpeace.
  • Rivalry Within the Industry  BP Plc. operates in an oligopoly industry structure with few other major players of about the same size and similar strategies. There is non or very little product differentiation (hence a lot of price competition). Barriers for exit are high therefore there is a high possibility of merges between current large players.Barrier’s to Entry- high - hard to enter this market, there are strong players with international position. It would be very expensive too. Threat of Substitutes-Virtually none as there are no alternative products nor significantly lower prices from other players that could threaten potential sales volume for BP. Solar/nuclear and alternative sources of energy are still being developed and not widely available due to the high costs of production and change.Bargaining Power of SuppliersHigh – due to socio-cultural and political situation in the countries supplying oil and gas (Middle East, etc.)Bargaining Power of Buyers/Customersmoderate- due to the high level of competitiveness in the industry and common products in the oil industry, prices between competitors are easily matched. It is difficult to differentiate products, therefore in order to keep current customers and attract new ones, BP has taken part in the loyalty scheme Nectar E.g. BA get good quality oil for reasonable price from BP Plc. Changing suppliers might imply high &amp;apos;switching&amp;apos; costs so we need to keep the terms of supplying and pricing in balance Attractiveness ( 6th Force)- quite high - 3rd position worldwide says it all..
  • What we stand for BP strives to offer energy that is affordable, secure and doesn’t damage the environment.BP (2009) Our Values, Online: http://www.bp.com/sectiongenericarticle.do?categoryId=9002630&amp;contentId=7005204 BP’s logo suggests heat, light and nature. BP brand was launched in 2000 after a series of mergers and acquisitions. It united all the heritage companies and employees that now make up BP and its global brand. BP (2009) Our Logo, Online: http://www.bp.com/sectiongenericarticle.do?categoryId=9028307&amp;contentId=7019193
  • BP’s strategy is to make profit, to create value for shareholders and potential investors by producing energy in a way that is affordable, secure and doesn’t damage the environment. Our objectives are therefore the following:– Explore for, develop and produce more fossil fuel resources that the world needs.– Efficiently manufacture, process and deliver better and more advanced products.– Be a material contributor to the transition to a low-carbon future. We expect Exploration and Production (E&amp;P) to be our core vehicle of growth, therefore we want to focus on this. We also expect to make investments in new energy technology and low-carbon energy businesses which will provide us with long-term growth potential. These are wind, solar, biofuels and carbon capture and storage (CCS).BP’s Strategy: Involvement with loyalty scheme (NECTAR) in order to ensure repeat business In-store catering – Wild Bean Coffee – brand loyalty 24 hour opening Join Ventures with M&amp;S Simply Food Self-service at pump 2012 London Olympic £50m Sponsorship dealHow http://www.bp.com/liveassets/bp_internet/globalbp/STAGING/global_assets/e_s_assets/e_s_assets_2008/downloads/bp_sustainability_review_2008.pdfhttp://www.marketingmagazine.co.uk/news/652545/Nectar-incentivises-green-behaviour/?DCMP=ILC-SEARCH
  • In-houseWell established online press office: Latest News Media Relations Images &amp; Graphics Communication with Investors and Shareholders Annual Reports &amp; Publications Speeches Press Releases RSSOnline Social Media Official LinkedIn profile No official Facebook Fan Page or Group, Twitter, Flickr!, You Tube etc. accountsAgenciesAdvertising agency Ogilvy &amp; Mather WorldwidePR Consultants Ogilvy PROther companies and trade associationsVarious digital Out of Home media across LondonDigital Escalator panels JC Decaux digital screens at London City Airporthttp://www.bp.com/productlanding.do?categoryId=120&amp;contentId=7047744http://www.dailydooh.com/archives/3946
  • July 2000 – $200m ad campaign by Ogilvy &amp; Mather Worldwide Aimed to re-brand and position British Petroleum as BP, environmentally conscious company. Slogan: ‘Beyond Petroleum’ Widely criticised as a ‘greenwashing’ campaign.March 2005 – explosion at BP&amp;apos;s Texas City refinery: 15 people died and 170 others were injured. BP was fined $21 million by Occupational Safety and Health Administration (OSHA)May 2007 – concerns over safety on BP’s North Sea oil and gas installations. The Health and Safety Executive (HSE) has ordered BP to improve the safety conditions, given BP&amp;apos;s safety record.“Since the 2005 explosion, BP has been under lots of pressure from the side of the stakeholders over safety concerns and accountability. “http://www.ogilvypr.com/en/case-study/bphttp://www.prwatch.org/node/1608Terry Macalister (2007) ‘BP warned over safety breaches in North Sea’ The Guardian http://www.guardian.co.uk/business/2007/may/08/oilandpetrol.frontpagenews
  • BP is a company that operates around the Globe. Hence the need to communicate with various stakeholders. FT October 2009 – BP fined record $87m over Texas CityOccupational Safety and Health Administration (OSHA) announced proposed penalties of $87,430,000 to BP Products North America Inc. for the company&amp;apos;s failure to correct potential hazards faced by employees at its Texas City, Tex., refinery following a March 2005 explosion. For noncompliance with the terms of the settlement agreement, the BP Texas City Refinery has been issued 270 &amp;quot;notifications of failure to abate&amp;quot;PR Newswire (2009) US Department of Labor&amp;apos;s OSHA Issues Record-Breaking Fines to BP http://www.prnewswire.com/news-releases/us-department-of-labors-osha-issues-record-breaking-fines-to-bp-67612792.htmlPR Week UK May 2009 – Greenpeace steps up campaign against BPGreenpeace has launched a new PR drive against BP by calling it &amp;apos;senile&amp;apos; in an advert in The Guardian today. The advert is timed to coincide with the oil firm&amp;apos;s 100th birthday celebrations taking place in London tonight. Greenpeace hopes the advert, and concurrent media coverage, will put pressure on BP directors and shareholders to stop the company extracting oil from tar sands.  Greenpeace believes the production method releases five times more greenhouse gases than conventional oil production. But it is also claiming that using tar sands projects makes poor business sense, because the complicated extraction methods used lose companies millions of pounds. http://www.prweek.com/uk/news/search/903422/Greenpeace-steps-campaign-against-BP/The Guardian November 2009 – BP faces damages claim over pipeline through Colombian farmland• Group says project harmed crops, livestock and fish • Original assessment allegedly warned of risksNinety-five Colombian farmers are suing the BP in the high court in London for allegedly causing serious damage to their land, crops and animals.In the first case of its kind, the farmers are claiming that BP Exploration Company Ltd, which joined forces with Colombia&amp;apos;s national oil company and four foreign multinational corporations in a consortium to construct the 450-mile (720km) Ocensa pipeline, caused landslides and damage to soil and groundwater, causing crops to fail, livestock to perish, contaminating water supplies and making fish ponds unsustainable. The farmers are claiming damages against BP for breach of contract and negligencehttp://www.guardian.co.uk/world/2009/nov/11/colombia-farmers-sue-bp-pipeline
  • BP needs to improve its image and re-enforce the Brand Values. We need a campaign that will address the problems with our stakeholders, lower the hostility and generate positive media coverage.Generation Y is concerned about the environment and worried about the future of the planet. BP needs to change the current strategy in order to be more appealing to UK graduates. Members of Generation Y are also media-savvy and brand-aware. Hence the need to improve online social media presence.
  • BP Corporate Strategy Brief by Katerina Fernandes (University Assignment)

    1. 1. BP p.l.c.<br />2009 <br />
    2. 2. About Us<br /><ul><li>Main business activities:
    3. 3. Exploration and production
    4. 4. Refining and marketing
    5. 5. Distributing of Energy
    6. 6. BP Alternative Energy
    7. 7. Products: petrol, diesel, maritime & aviation fuel, lubricants, bottled gas and gas for industrial consumers
    8. 8. BP Brands:
    9. 9. Third largest energy company in the world
    10. 10. Largest producer of oil and second largest producer of gas in the UK
    11. 11. B2B & B2C markets
    12. 12. Profit of $21 billion in 2008</li></li></ul><li>Environmental Analysis<br />
    13. 13. Industry Analysis<br />BP competes in:<br />Energy & Utilities<br />Oil & Gas Refining, Marketing and Distribution<br />Alternative Energy Source<br />Chemicals<br />Basic and Intermediate Chemical and Petrochemical Manufacturing<br />Retail<br />Top Competitors:<br />Suppliers:<br />For EU: North Africa, Nigeria, Kazakhstan and Azerbaijan<br />Retail Brands:<br />
    14. 14. Target Audience & Stakeholders<br />
    15. 15. Porter’s Five Forces<br />
    16. 16. Brand Values<br /><ul><li>BP wants to be recognised as a competitively successful company that can make a difference in the world.
    17. 17. The colours of the ‘Helios’ – named after the Greek god of the sun – suggest heat, light and nature.
    18. 18. Progressive
    19. 19. principle of mutual advantage and productive relationships
    20. 20. Responsible
    21. 21. committed to the safety and development of our people and the communities
    22. 22. Innovative
    23. 23. through our people and technology.
    24. 24. Performance driven
    25. 25. continuous improvement and safe, reliable operations.</li></li></ul><li>Objectives & Strategy<br /><ul><li>24 hour opening
    26. 26. Self-service at pump
    27. 27. $$$$
    28. 28. To create value for shareholders and potential investors
    29. 29. To produce Energy in a way that doesn’t damage the environment.
    30. 30. To focus on Exploration and Production as our core vehicle of growth
    31. 31. To Invest in new energy technology and low-carbon energy businesses</li></li></ul><li>Current Communications Strategy<br />Agencies<br />Other companies and trade associations<br />Various digital Out of Home media across London<br />In-house<br />Online Digital Media<br />
    32. 32. Communications Challenges<br /> “Since the 2005 explosion, BP has been under huge pressure from the stakeholders over safety concerns and accountability. “<br />
    33. 33. Major Communications Challenge<br />
    34. 34. PR Campaign Objectives<br /><ul><li>BP reputation management
    35. 35. Help to establish new ways of communication with our stakeholders
    36. 36. Investor & shareholders
    37. 37. Create a comprehensive online social media presence
    38. 38. Lower the hostility and generate positive media coverage
    39. 39. Focus on BP’s concern about the environment
    40. 40. Crucial to attract generation Y
    41. 41. Need to re-enforce our Brand Values
    42. 42. Particularly point out our concerns over safety and security of our workers and other employees</li>