SDSU  Mkt710 Dr. Don Jung Lord John Browne and BP’s  Global Shift Andy Ku, Jason Chen  Mavis Lin, Sean Yeh
<ul><li>Question </li></ul><ul><li>Background </li></ul><ul><li>Action </li></ul><ul><li>Analysis and Issue </li></ul><ul>...
What’s your perception  about Oil Concern? <ul><li>Dirty </li></ul><ul><li>Pollute  </li></ul><ul><li>Scarcity </li></ul><...
Can Oil Company change? Image Image <ul><li>Dirty </li></ul><ul><li>Pollute  </li></ul><ul><li>Scarcity </li></ul><ul><li>...
<ul><li>Question </li></ul><ul><li>Background </li></ul><ul><li>Action </li></ul><ul><li>Analysis and Issue </li></ul><ul>...
John Browne <ul><li>an iconic figure in British business   </li></ul><ul><li>Born:  Feb 20, 1948 Hamburg, Germany </li></u...
BP Background <ul><li>A British company </li></ul><ul><li>3rd largest  oil concern in the world </li></ul><ul><li>Over 100...
<ul><li>Question </li></ul><ul><li>Background </li></ul><ul><li>Action </li></ul><ul><li>Analysis and Issue </li></ul><ul>...
Lord John Browne’s Leadership <ul><li>1995, took the helm </li></ul><ul><li>To increase revenue through 2 ways </li></ul><...
BP’s Expansion Map Before  Gas-15.81% Oil-10.55% (AIOC) Gas-3.33% Oil-1.63% (Sohio) North Sea Prudhoe Bay (Chigach)
Acquisition <ul><li>2003, 240BN USD revenue( 400% growth) </li></ul>Asia/ Europe Russia/Kovykta gas condensate field  7 20...
BP’s Expansion Map Gas-27.36% Oil-5.67% (TNK) Gas-3.33% Oil-1.63% (Sohio/ Amoco/ Acro) Gas-0.87% Oil-1.24% North Sea Prudh...
Extend to Russia  <ul><li>Target: Securing position in Russia for the long-term </li></ul><ul><li>Method:  acquisition  </...
<ul><li>Focus on the environment and social issues. </li></ul><ul><ul><li>In 1997, announced its support Kyoto Protocol  <...
Balance btw Growth and Social Responsibility <ul><li>New Marketing strategy worldwide </li></ul><ul><ul><li>emphasizing so...
<ul><li>What’s your perception about Oil Concern now? </li></ul>
Revenue -  Financial data in millions of US$ Bring BP into the second largest independent oil company 22,000 22,341 15,961...
Stock Price
BP vs Exxon Mobile Jan/03/’95 (USD) BP: 4.97 Exxon Mobile: 15.19 May/02/’07 (USD) BP: 67.96 Exxon Mobile: 79.82
<ul><li>Question </li></ul><ul><li>Background </li></ul><ul><li>Action </li></ul><ul><li>Analysis and Issue </li></ul><ul>...
Leadership Style of Lord John Browne   <ul><li>Participative style  </li></ul>Continual interaction and exchange of inform...
The analysis of Russia <ul><li>Short- term </li></ul><ul><li>Pros </li></ul><ul><ul><li>Adding revenue </li></ul></ul><ul>...
Social Responsibility <ul><li>Alaska- October, 2007 Prudhoe Bay Spill </li></ul>
Arctic National Wildlife Refuge <ul><li>Background </li></ul><ul><ul><li>From the late 1960s the company expanded beyond t...
In the Future <ul><li>Maintenance </li></ul><ul><ul><li>Repair Oil Transit Lines </li></ul></ul><ul><li>Focus on developin...
<ul><li>Question </li></ul><ul><li>Background </li></ul><ul><li>Action </li></ul><ul><li>Analysis and Issue </li></ul><ul>...
Scandal
Scandal <ul><li>homosexual scandal   </li></ul><ul><li>misused company assets </li></ul><ul><ul><li>tapping company assets...
Scandal <ul><li>John Browne commented:   </li></ul><ul><ul><li>&quot;In my 41 years with BP, I have kept my private life s...
Q&A
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Lord John Browne And B Ps Global Shift

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  • Lord John Browne And B Ps Global Shift

    1. 1. SDSU Mkt710 Dr. Don Jung Lord John Browne and BP’s Global Shift Andy Ku, Jason Chen Mavis Lin, Sean Yeh
    2. 2. <ul><li>Question </li></ul><ul><li>Background </li></ul><ul><li>Action </li></ul><ul><li>Analysis and Issue </li></ul><ul><li>And Next… </li></ul>
    3. 3. What’s your perception about Oil Concern? <ul><li>Dirty </li></ul><ul><li>Pollute </li></ul><ul><li>Scarcity </li></ul><ul><li>Dangerous </li></ul><ul><li>Trouble Maker </li></ul><ul><li>Clean </li></ul><ul><li>Green Concerned </li></ul><ul><li>Future hope </li></ul><ul><li>Safety </li></ul>
    4. 4. Can Oil Company change? Image Image <ul><li>Dirty </li></ul><ul><li>Pollute </li></ul><ul><li>Scarcity </li></ul><ul><li>Dangerous </li></ul><ul><li>Trouble Maker </li></ul><ul><li>Climate warming </li></ul><ul><li>70%result from oil production </li></ul><ul><li>Exploration </li></ul><ul><li>Leaking </li></ul>Clean Green Concerned Future hope Safety
    5. 5. <ul><li>Question </li></ul><ul><li>Background </li></ul><ul><li>Action </li></ul><ul><li>Analysis and Issue </li></ul><ul><li>And Next… </li></ul>
    6. 6. John Browne <ul><li>an iconic figure in British business </li></ul><ul><li>Born: Feb 20, 1948 Hamburg, Germany </li></ul><ul><li>Education: Cambridge, Physics / Stanford Business School </li></ul><ul><li>Occupation: </li></ul><ul><ul><li>Join BP in 1966 / still in university </li></ul></ul><ul><ul><li>CEO of BP (resigned on May 1, 2007 ) </li></ul></ul><ul><ul><li>Chairman of the board of Apax Partners </li></ul></ul><ul><ul><li>one of the most highly paid executives in the UK(£5.7 million) </li></ul></ul><ul><li>Interests: </li></ul><ul><ul><li>fine cigars, antique furniture, opera and the arts </li></ul></ul><ul><li>Social Status: </li></ul><ul><ul><li>President of the Royal Academy of Engineering </li></ul></ul><ul><ul><li>knighted by Queen Elizabeth II (1998) </li></ul></ul><ul><ul><li>a crossbencher in the House of Lords </li></ul></ul><ul><ul><li>a trustee of the British Museum and the Tate Gallery </li></ul></ul><ul><ul><li>a vice president and member of the board of the Prince of Wales Business Leaders Forum </li></ul></ul>
    7. 7. BP Background <ul><li>A British company </li></ul><ul><li>3rd largest oil concern in the world </li></ul><ul><li>Over 100,000 employees in 100 countries </li></ul><ul><li>Core business: discovery the earth’s natural resources ( locating, developing, marketing) </li></ul><ul><li>Depend on global communication , technology innovation and intellectual human capital </li></ul>
    8. 8. <ul><li>Question </li></ul><ul><li>Background </li></ul><ul><li>Action </li></ul><ul><li>Analysis and Issue </li></ul><ul><li>And Next… </li></ul>
    9. 9. Lord John Browne’s Leadership <ul><li>1995, took the helm </li></ul><ul><li>To increase revenue through 2 ways </li></ul><ul><ul><li>Finding more reserves </li></ul></ul><ul><ul><li>Re- Branding </li></ul></ul>
    10. 10. BP’s Expansion Map Before Gas-15.81% Oil-10.55% (AIOC) Gas-3.33% Oil-1.63% (Sohio) North Sea Prudhoe Bay (Chigach)
    11. 11. Acquisition <ul><li>2003, 240BN USD revenue( 400% growth) </li></ul>Asia/ Europe Russia/Kovykta gas condensate field 7 2003 TNK Europe Germany, Poland, Netherland/ Gas station 4 2002 Veba Oel international UK/motor oil 4.7 2000 Bumrah-Castrol China/ Russia US/ west coast based/ exploration to Far East 27 2000 Arco international US/exploration in 20 countries 57 1998 Amoco Opportunity Country Price (BN USD) Year Company
    12. 12. BP’s Expansion Map Gas-27.36% Oil-5.67% (TNK) Gas-3.33% Oil-1.63% (Sohio/ Amoco/ Acro) Gas-0.87% Oil-1.24% North Sea Prudhoe Bay (Chigach) Azerbaijan- developing Angola-developing Ger/ Pol/ Ner/ (Veba Oel)
    13. 13. Extend to Russia <ul><li>Target: Securing position in Russia for the long-term </li></ul><ul><li>Method: acquisition </li></ul><ul><li>Result: TNK BP </li></ul><ul><ul><li>holding 50% share </li></ul></ul><ul><ul><li>added 105M to BP’s net income for a quarter due to rising demand </li></ul></ul><ul><ul><li>accounts for 1/5 of BP's global reserves, 1/4 of BP's production, and nearly 1/10 of its global profits </li></ul></ul>Oil Refinery pending approval Slavneft Vertically integrated oil company 2003 TNK Oil producer 2001 Sidanco Function Year Company
    14. 14. <ul><li>Focus on the environment and social issues. </li></ul><ul><ul><li>In 1997, announced its support Kyoto Protocol </li></ul></ul><ul><ul><li>In 2000, developed 300 international environment programs </li></ul></ul><ul><ul><li>Started “Plug in the Sun” program by 2001, install solar panels in gas stations </li></ul></ul><ul><ul><li>In 2002, stopped all corporate political contributions in US </li></ul></ul><ul><li>New Corporate logo and slogan </li></ul><ul><ul><li>New logo with a sunburst of green, yellow and white </li></ul></ul><ul><ul><li>New slogan that BP stands for “Beyond Petroleum” </li></ul></ul><ul><li>Desire to change to a culturally sensitive & knowledge-based company </li></ul>Re-Branding
    15. 15. Balance btw Growth and Social Responsibility <ul><li>New Marketing strategy worldwide </li></ul><ul><ul><li>emphasizing social and environment responsibility. </li></ul></ul><ul><li>Renewable energy </li></ul><ul><ul><li>wind, solar, and hydrogen </li></ul></ul><ul><ul><li>In 1999, BP purchased Solarex, a solar-power development firm </li></ul></ul><ul><li>Shareholder value and social responsibility can support each other </li></ul><ul><ul><li>Should view all related environment issues as another form of opportunity </li></ul></ul>
    16. 16. <ul><li>What’s your perception about Oil Concern now? </li></ul>
    17. 17. Revenue - Financial data in millions of US$ Bring BP into the second largest independent oil company 22,000 22,341 15,961 10,267 6,845 Profit for the year 265,906 249,465 294,849 236,045 180,186 Sales 2006 2005 2004 2003 2002  
    18. 18. Stock Price
    19. 19. BP vs Exxon Mobile Jan/03/’95 (USD) BP: 4.97 Exxon Mobile: 15.19 May/02/’07 (USD) BP: 67.96 Exxon Mobile: 79.82
    20. 20. <ul><li>Question </li></ul><ul><li>Background </li></ul><ul><li>Action </li></ul><ul><li>Analysis and Issue </li></ul><ul><li>And Next… </li></ul>
    21. 21. Leadership Style of Lord John Browne <ul><li>Participative style </li></ul>Continual interaction and exchange of information and influence between leader And subordinates <ul><li>Change logo </li></ul><ul><li>Upgrade the working environment </li></ul><ul><li>Acquisition : culture change </li></ul><ul><li>“they are in the right direction” </li></ul>Participative Leader Subordinate Subordinate Subordinate
    22. 22. The analysis of Russia <ul><li>Short- term </li></ul><ul><li>Pros </li></ul><ul><ul><li>Adding revenue </li></ul></ul><ul><ul><li>More reserves </li></ul></ul><ul><li>Cons </li></ul><ul><ul><li>Tough action of TNK </li></ul></ul><ul><ul><li>Margin and returns lower than expected </li></ul></ul><ul><li>Long-term </li></ul><ul><li>Pros </li></ul><ul><ul><li>Close the door to other European peers </li></ul></ul><ul><ul><li>Exporting opportunity to Asia and EU </li></ul></ul><ul><li>Cons </li></ul><ul><ul><li>Could lose all assets </li></ul></ul><ul><ul><li>(Iran’s disaster) </li></ul></ul>The New York Times MOSCOW, June 22. 2007 TNK-BP, sold the field after Russian authorities threatened to revoke the company’s license to develop it.
    23. 23. Social Responsibility <ul><li>Alaska- October, 2007 Prudhoe Bay Spill </li></ul>
    24. 24. Arctic National Wildlife Refuge <ul><li>Background </li></ul><ul><ul><li>From the late 1960s the company expanded beyond the Middle East to the USA (Prudhoe Bay, Alaska) </li></ul></ul><ul><ul><li>In 1969, BP acquired the Valdez oil terminal, Alaska, from the Chugach for $1. </li></ul></ul><ul><li>1997, Re-branding </li></ul><ul><li>2000, back to Bush’s administration's plan to open up Arctic National Wildlife Refuge to oil exploration </li></ul><ul><li>August, 2006, shut down operation Prudhoe Bay </li></ul><ul><ul><li>due to corrosion in the pipeline. BP had spilled over one million litres of oil in Alaska's North Slope </li></ul></ul>Conflict Image
    25. 25. In the Future <ul><li>Maintenance </li></ul><ul><ul><li>Repair Oil Transit Lines </li></ul></ul><ul><li>Focus on developing alternative energy </li></ul><ul><ul><li>In 2007/Feb. spend $8 billion over 10 years </li></ul></ul><ul><ul><li>Natural gas </li></ul></ul><ul><ul><li>Hydrogen </li></ul></ul><ul><ul><li>Solar panel </li></ul></ul><ul><ul><li>Wind </li></ul></ul>
    26. 26. <ul><li>Question </li></ul><ul><li>Background </li></ul><ul><li>Action </li></ul><ul><li>Analysis and Issue </li></ul><ul><li>And Next… </li></ul>
    27. 27. Scandal
    28. 28. Scandal <ul><li>homosexual scandal </li></ul><ul><li>misused company assets </li></ul><ul><ul><li>tapping company assets for his own personal use </li></ul></ul><ul><li>Perjury </li></ul><ul><ul><li>made false statements to the court </li></ul></ul><ul><ul><li>will face charges for lying </li></ul></ul><ul><li>This disaster badly tarnished BP's public image, again. </li></ul>
    29. 29. Scandal <ul><li>John Browne commented: </li></ul><ul><ul><li>&quot;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. </li></ul></ul>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. 30. Q&A

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