Situation Analysis And Strategic Recommendations Of Bp After Oil Spill Disaster In Usa

3997 words - 16 pages

Situation analysis and strategic recommendations of BP
After oil spill disaster in USA

Table of content:

Introduction 3
Executive Summary 3
Approaches 3
Background of BP 3
BP in USA 3
PESTEL analysis of BP in USA 4
Political Environment 4
Economic Environment 5
Socio-cultural Environment 6
Technological Environment 7
Legal Environment 7
Environmental Analysis 8
Summary 8
SWOT Analysis of BP 8
Strengths 9
Weaknesses 9
Opportunities 10
Threats 11
Summary 11
Strategic Recommendations 11
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There will be a brief discussion of relevant theory and model then some practical example of those theories will be applied to BP's situation and finally a critical analysis of the issue or problem will be discussed in the light of relevant theory or model.
Background of BP:
British Petroleum (BP) is one of the world leading multi-national oil and gas companies located in UK, engaged in exploration and production of oil, refining, retail services and petrochemicals product for its customer worldwide. It sales and other operating revenues is $3,75,517 million, BP employed 8,34,000 people world- wide, it have 21,800 retail sites, upstream and midstream operation in 30 countries, wholly or partly owned 16 refineries around the world and it largest division is BP America. (BP, 2012)
BP in USA:
BP started its operation in USA as a Petroleum storage company in 1866 in the Pennensylvania oil field. Now BP’s business portfolio in USA includes exploration, production, refineries, retail services, pipelines, alternative energy, petrochemicals etc. In USA BP invested approximately $52bn in development of energy and employed 23,000 from local US. BP’s daily production of oil in USA is over 770000 barrels. (BP, 2012)
PESTEL analysis of BP in USA:
PESTEL is a tool used to analyse an organisation's external factors and how those factors can create an opportunity or threat for them and finally make future strategy based on the analysis.
According to Johnson, Scholes, Willington (2008), the PESTEL framework categorises environmental influences into six main types; Political, Economic, Social, Technological, Environmental and Legal. Thus PESTEL provides on the possible success or failure of particular strategy.
Political environment:
Political factors refer to government policy such as the degree of intervention in the economy, what goods and services want to provide, to what extant does it believe in subsidising firm? What are its priorities in term of business support? (Oxford university press, 2007)
Practical example in BP case:
* President Barak Obama visited the Gulf coast immediately after the BP oil spill in the gulf of Mexico and he ensured the affected people in his speech ‘’I take the responsibility. It is my job to make sure that is done to shut this thing down ‘’ Barak Obama, may 27, 2010 (the economist, 2010)
* In August 2010 Obama announced the formation of Gulf Coast Claim Facility (GCCF) where individuals and business that have incurred damage as a result of oil spill can submit a claim. Due to political pressure BP funded $20 billion for GCCF without any legal proceeding. (White house, 2010)
* Due to oil spill Obama administration established the National Commission on the BP deep water oil spill and offshore drilling on May 2010. (National commission, 2010)
* The US government and EU has imposed new sanctions against Iran which included lower monetary thresholds for certain investment in Iran for the development of...

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