China retail +introduction


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  • Key messages: In the past, international oil majors have attempted to set up stand-alone sites through various agreements with local players or municipalities, yet with very limited success – often ended up with sporadic network and barely profitable. 2.Since early 2000, FOCs started to enter into partnership with major NOCs by means of minority JVs. Basically there are three major types of approach as shown on the slide. BP currently operates the biggest FOC fuel retail network in China. Shell is also running a network of 200 dual-branded sites in Jiangsu with Sinopec. Shell is also setting up presence in second tier cities in West China. Whereas, EssoMobil has successfully formed an integrated JV with Sinopec and Aramco to build a large scale refinery and retail network in Fujian province. Total has been actively leveraging its relationship with Sinochem to tap into northern and eastern China.
  • China retail +introduction

    1. 1. China Retail 2012 BP China Campus Recruitment
    2. 2. What we will cover ….. <ul><li>An overview of the BP Global Retail </li></ul><ul><li>An overview of China Retail </li></ul><ul><li>HSSE </li></ul><ul><li>Fuel & non-fuel business </li></ul><ul><li>Brand and customer </li></ul><ul><li>People </li></ul><ul><li>Partnership </li></ul><ul><li>Our future </li></ul>
    3. 3. BP Global Retail <ul><li>Today, there are more than 22,000 service stations around five continents . </li></ul><ul><li>Most of our stations include a retail space selling motor oils, soft drinks and other convenience items, as well as coffee and food from Wild Bean Café , PetitBistro , or ampm . </li></ul><ul><li>We have variety of operational models in the worldwide that include COCO, CODO,DODO COFO. </li></ul>Data resource: BP Annual Report and Accounts 2009 资料来源: BP 集团 2009 年报 Wild Bean Café in Australia 澳大利亚的 Wild Bean Café Aral BP Car wash service 德国 Aral 洗车业务 BP service station in UK 英国 BP 加油站 ampm in USA 美国的 ampm 便利店 FIFA decorated site in South Africa 世界杯主题包装的南非油站 BPPC service station in China 中国的中油 BP 加油站
    4. 4. BP China Retail <ul><li>Market dominated by two integrated NOCs </li></ul><ul><li>Increasing competition between two NOC into each other’s home territory. </li></ul><ul><li>FOC access into the market mainly through alliance with NOCs or local partners </li></ul><ul><li>Independents have sizable network share, but under margin pressure. </li></ul>Beijing Jiangsu Guangdong Fujian Zhejiang Shanghai Shandong 4 Stand-alone BP Sites BP-PetroChina JV BP-Sinopec JV Sinopec/Esso/Aramco Integrated Refining & Marketing JV (750 sites) Sinopec/Shell 500 sites JV Total/Sinochem 500 sites JV in Bohai Ring and east China PetroChina Territory Sinopec Territory
    5. 5. BP’s Retail Evolution in China 1995 1996 BU established 1 st BP site BPGD 33 sites IPO 2000 324 sites dual branded BP Jiangmen JV set up 2001 2002 BPPC JV established 2003 403 sites dual branded 2004 BPSNP JV established 2005 Shaoxing sites transferred Xiaoshan sites transferred 2008 2006
    6. 6. Retail Family Tree GCE GCE GCE GCE GCE Segment Strategic Performance Unit Business Unit China Retail BU Center & JVs Exploration &Production Alternative Energy China Retail Refining & Marketing Segment (Downstream) SAM Global Fuel A&A Fuels Value Chain - EH Sub-segment Fuels Value Chain - WH UK Asia O&D Lubes Turkey France Shanghai BU Centre Zhejiang BP Sinopec JV Guangdong BP Petro China JV BP Fujian operations
    7. 7. How we together make it a profitable biz …
    8. 8. Embedding Safety Culture in Operations … High standard facilities and equipment High standard of operations BPPC JV is holding an HSE contest to refresh the HSE knowledge and the practical application skills. Site staff are trained on safety before they are allowed to serve for customers.
    9. 9. Fuels business - Track Records Our JVs have grown faster than the market, driven by our competencies in key areas <ul><li>Serve 60M and 80M fuel customer per year respectively in each JV with consistent outperform customer satisfactions (CSM1.01~1.04) </li></ul><ul><li>Strong growth in fuel volume (e.g. CAGR 10% in Guangdong (2005-2008) with no material change of network; 15 fen/l less discounts comparing with competitive sites in 2009 ). </li></ul><ul><li>Strong LFL growth in convenience performance and leading position in the industry ( CAGR 27% vs. market average of 12%- 20%) </li></ul><ul><li>MER for BPPC is higher than the competitors </li></ul><ul><ul><li>- BPPC (1.9), Petro China (1.1), Sinopec (1.4) and average </li></ul></ul><ul><ul><li>independent Sites (1.5) in 2009 with less support from </li></ul></ul><ul><ul><li>competitive margin availability. </li></ul></ul><ul><li>Cost levels in both JVs are competitive vs. other players given the standards we operate and level of compliance. </li></ul>
    10. 10. Brand & Customer - Brand Architecture <ul><li>Based on the global brand architecture, there are three hierarchies: master brand, </li></ul><ul><li>product/service brand and descriptor </li></ul>Master Retail Brand Food Service Brand Bottle additive brand (Premium fuel brand extension) C-store offer brand descriptor C-store offer brand descriptor BP master brand presents in two joint venture operations Bottle additive brand (Premium fuel brand extension) Food Service Brand 2010 trial Product / Service Brands Descriptors The chart below illustrates the brand/descriptor presence in both JVs
    11. 11. Fuels business of China Retail - Global Transportation Challenges Competition Low CO 2 world Bio Blending Customer Mobility Changes
    12. 12. Fuels of the future Key changes in the future -- Government legislation To vehicle manufactures: Improve the efficiency of engines & vehicles To oil companies: Introduce increasing amounts of renewable fuels Impact of legislation The future for BP <ul><ul><li>Significant change to the industry & vehicles </li></ul></ul><ul><ul><li>Great opportunities to make products & service stations brand of choice </li></ul></ul><ul><ul><li>Win in the future </li></ul></ul><ul><li>On cars on the road </li></ul><ul><li>Gasoline engine: getting smaller but being boosted, 40% efficiency improvement </li></ul><ul><li>Diesel engine: increasing amounts of Hybridization </li></ul><ul><li>Trucks : improve efficiency even further over time </li></ul><ul><li>On oil companies: </li></ul><ul><li>Demand: </li></ul><ul><li>Developed economies: expected to fall </li></ul><ul><li>Emerging economies: demand expected to rise </li></ul><ul><li>New vehicles require different fuels </li></ul>
    13. 13. People <ul><li>Conduct annual talent review using 9-box grid, leadership health check and succession planning </li></ul><ul><li>Collaborate with other businesses in China on cross business talent move and development </li></ul>Talent Development Capability Building Diversity & Inclusion Communication & E ngagement <ul><li>Strengthen operation and marketing capabilities in JV with customized training program. </li></ul><ul><li>Understand BD capability requirement linking with overall R&M strategy in China </li></ul><ul><li>Enhance gender diversity especially front-line </li></ul><ul><li>Apply D&I lenses in HR process recruitment and succession planning </li></ul><ul><li>Engage and support JV in building D&I awareness and developing D&I agenda </li></ul><ul><li>Employee communication with different channels, i.e. quarterly townhall, newsletter, annual conference, etc. </li></ul><ul><li>Create an environment where employee are encouraged to give feedback and raise concerns </li></ul>
    14. 14. <ul><li>Critical to our overall strategy and performance </li></ul><ul><li>Relationships has been developed at both operational and strategic level </li></ul><ul><li>Where we want to be: </li></ul><ul><ul><li>Working together </li></ul></ul><ul><ul><li>Pooling our strength </li></ul></ul><ul><ul><li>Learning from each other </li></ul></ul><ul><ul><li>Developing a collective determination </li></ul></ul><ul><ul><li>to succeed </li></ul></ul>Partnership &quot;BP has brought world class retail management know how to our JV in Zhejiang. I am happy to see the tremendous growth in the shop business introduced by BP. I hope we can further extend our cooperation to make a greater success.&quot; - Wang Tianpu, President of Sinopec <ul><ul><li>BPSNP Board meeting </li></ul></ul>Relationship in the top level
    15. 15. Great future… <ul><li>Long term mission in line with R&M’s strategic </li></ul><ul><li>direction of shifting capital employed into growth </li></ul><ul><li>markets with a material presence. </li></ul><ul><li>Create a sustainable growth business in existing </li></ul><ul><li>JVs. </li></ul><ul><li>Develop new & attractive marketing business by </li></ul><ul><li>access to integrated Fuel Value Chains. </li></ul>Great future…
    16. 16. Where to find more about BP …… <ul><li>Various Communication media </li></ul><ul><ul><li>Quarterly performance updates: Performance in Perspective (PIP) </li></ul></ul><ul><ul><li>Bi-monthly internal magazine: Horizon </li></ul></ul><ul><ul><li>Monthly learning session: lunch & learn </li></ul></ul><ul><ul><li>Timely townhalls & e-messages: speeches from BUL/segment,/group updating what’s going on around BP </li></ul></ul><ul><li>Orientation programs </li></ul><ul><ul><li>Country Induction </li></ul></ul><ul><ul><li>Discover BP </li></ul></ul><ul><li>Internet / Intranet list </li></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul>