Slideshow Transcript

1. Slide 1: SDSU Mkt710 Dr. Don Jung Lord John Browne and BP’s Global Shift Andy Ku, Jason Chen Mavis Lin, Sean Yeh
2. Slide 2: • Question • Background • Action • Analysis and Issue • And Next…
3. Slide 3: What’s your perception about Oil Concern? •Dirty Clean •PolluteConcerned Green •Scarcity Future hope •Dangerous Safety •Trouble Maker
4. Slide 4: Can Oil Company change? Image Image Dirty Pollute Clean Scarcity Green Concerned Dangerous Future hope Trouble Maker Safety •Climate warming •70%result from oil production •Exploration •Leaking
5. Slide 5: • Question • Background • Action • Analysis and Issue • And Next…
6. Slide 6: John Browne • an iconic figure in British business • Born: Feb 20, 1948 Hamburg, Germany • Education: Cambridge, Physics / Stanford Business School • Occupation: – Join BP in 1966 / still in university – CEO of BP (resigned on May 1, 2007 ) – Chairman of the board of Apax Partners – one of the most highly paid executives in the UK(£5.7 million) • Interests: – fine cigars, antique furniture, opera and the arts • Social Status: – President of the Royal Academy of Engineering – knighted by Queen Elizabeth II (1998) – a crossbencher in the House of Lords – a trustee of the British Museum and the Tate Gallery – a vice president and member of the board of the Prince of Wales Business Leaders Forum
7. Slide 7: BP Background • A British company • 3rd largest oil concern in the world • Over 100,000 employees in 100 countries • Core business: discovery the earth’s natural resources( locating, developing, marketing) • Depend on global communication, technology innovation and intellectual human capital
8. Slide 8: • Question • Background • Action • Analysis and Issue • And Next…
9. Slide 9: Lord John Browne’s Leadership • 1995, took the helm • To increase revenue through 2 ways – Finding more reserves – Re- Branding
10. Slide 10: BP’s Expansion Map Before Prudhoe Bay (Chigach) North Sea Gas-3.33% Oil-1.63% Gas-15.81% (Sohio) Oil-10.55% (AIOC)
11. Slide 11: Acquisition • 2003, 240BN USD revenue( 400% growth) Price Company Year Country Opportunity (BN USD) US/exploration in 20 Amoco 1998 57 international countries US/ west coast Arco 2000 27 based/exploration to Far China/ Russia East Bumrah- 2000 4.7 UK/motor oil international Castrol Germany, Poland, Veba Oel 2002 4 Europe Netherland/ Gas station Russia/Kovykta gas TNK 2003 7 Asia/ Europe condensate field
12. Slide 12: BP’s Expansion Map Gas-27.36% Ger/ Pol/ Ner/ Oil-5.67% (TNK) (Veba Oel) Azerbaijan- Prudhoe Bay developing (Chigach) North Sea Gas-0.87% Gas-3.33% Oil-1.24% Oil-1.63% (Sohio/ Amoco/ Acro) Angola- developing
13. Slide 13: Extend to Russia • Target: Securing position in Russia for the long-term • Method: acquisition Company Year Function Sidanco 2001 Oil producer Vertically integrated oil TNK 2003 company Slavneft pending approval Oil Refinery • Result: TNK BP – holding 50% share – added 105M to BP’s net income for a quarter due to rising demand – accounts for 1/5 of BP's global reserves, 1/4 of BP's production, and nearly 1/10 of its global profits
14. Slide 14: Re-Branding • Focus on the environment and social issues. – In 1997, announced its support Kyoto Protocol – In 2000, developed 300 international environment programs – Started “Plug in the Sun” program by 2001, install solar panels in gas stations – In 2002, stopped all corporate political contributions in US • New Corporate logo and slogan – New logo with a sunburst of green, yellow and white – New slogan that BP stands for “Beyond Petroleum” • Desire to change to a culturally sensitive & knowledge- based company
15. Slide 15: Balance btw Growth and Social Responsibility • New Marketing strategy worldwide – emphasizing social and environment responsibility. • Renewable energy – wind, solar, and hydrogen – In 1999, BP purchased Solarex, a solar-power development firm • Shareholder value and social responsibility can support each other – Should view all related environment issues as another form of opportunity
16. Slide 16: • What’s your perception about Oil Concern now?
17. Slide 17: Revenue - 　 2002 2003 2004 2005 2006 Sales 180,186 236,045 294,849 249,465 265,906 Profit for the year 6,845 10,267 15,961 22,341 22,000 Financial data in millions of US$ Sal es Prof i t f or the year Bring BP into the second 2002 2003 2004 2005 2006 largest independent oil company
18. Slide 18: Stock Price
19. Slide 19: BP vs Exxon Mobile May/02/’07 (USD) BP: 67.96 Exxon Mobile: 79.82 Jan/03/’95 (USD) BP: 4.97 Exxon Mobile: 15.19
20. Slide 20: • Question • Background • Action • Analysis and Issue • And Next…
21. Slide 21: Leadership Style of Lord John Browne 1. Change logo • Participative style 2. Upgrade the working environment 3. Acquisition : culture change Participative Leader “they are in the right direction” Subordinate Subordinate Subordinate Continual interaction and exchange of information and influence between leader And subordinates
22. Slide 22: The analysis of Russia Short- term Long-term • Pros • Pros – Adding revenue – Close the door to other – More reserves European peers • Cons – Exporting opportunity to – Tough action of TNK – Margin and returns lower Asia and EU than expected • Cons – Could lose all assets The New York Times MOSCOW, June 22. 2007 (Iran’s disaster) TNK-BP, sold the field after Russian authorities threatened to revoke the company’s license to develop it.
23. Slide 23: Social Responsibility • Alaska- October, 2007 Prudhoe Bay Spill
24. Slide 24: ge Arctic National Wildlife Refuge a • Background t Im ic – From the late 1960s the company expanded beyond the fl Middle East to the USA (Prudhoe Bay, Alaska) n – In 1969, BP acquired the Valdez oil terminal, Alaska, from o the Chugach for $1. C • 1997, Re-branding • 2000, back to Bush’s administration's plan to open up Arctic National Wildlife Refuge to oil exploration • August, 2006, shut down operation Prudhoe Bay – due to corrosion in the pipeline. BP had spilled over one million litres of oil in Alaska's North Slope
25. Slide 25: In the Future • Maintenance – Repair Oil Transit Lines • Focus on developing alternative energy In 2007/Feb. spend $8 billion over 10 years – Natural gas – Hydrogen – Solar panel – Wind
26. Slide 26: • Question • Background • Action • Analysis and Issue • And Next…
27. Slide 27: Scandal
28. Slide 28: Scandal • homosexual scandal • misused company assets – tapping company assets for his own personal use • Perjury – made false statements to the court – will face charges for lying •This disaster badly tarnished BP's public image, again.
29. Slide 29: Scandal • John Browne commented: \"In my 41 years with BP, I have kept my private life separate from my business life. I have always regarded my sexuality as a personal matter, to be kept private. Comment: 5-02-2007 @ 12:42AM Cin said... Who cares!!! If he did his job and made money for his stock holders, who cares who he slept with. The world should get real.
30. Slide 30: Q&A