STRATEGIC MANAGEMENT

Strategic Management

Abstract

This paper discusses that Strategic Management and Planning is a set of decisions and actions formulated to align people and resources together with the purpose of ensuring the future success of the organization. In addition, Strategic Management and Planning involves, planning, directing, organizing, and controlling the company's strategy. Strategic management, consist of three processes that entail corporate business, functional level planners, and support personnel. Strategic Plan ImportanceIn today's business environment a strategic business plan is indispensable due to the high failure rate of small businesses. It has been determine that small businesses without a business plan are most likely to fail. A strategic business plan will help the organization define its mission and vision, giving the organization a sense of purpose and direction. In addition a strategic plan will help the organization asses its strengths and weaknesses, and develop short-term strategies that are compatible with long-term objectives. A strategic plan will balance the use of resources, people, structures, and technologies in order to achieve company goals with the least amount of risk.

Table of Content

INTRODUCTION4

1. BP AND SHELL AND THE STATISTICAL COMPARISON5

SBU Strategies6

Shell Renewables7

BP Solar8

External Analysis9

PEST Analysis10

Porter's Five Forces11

Drivers for Change and Critical Success Factors11

Internal Analysis12

Brief Financial Analysis12

Stakeholder Analysis14

Staying in Business: Potential Performance Impediments14

Realising Critical Success Factors16

2. MERGER AND ACQUISITION18

CONCLUSIONS19

REFERENCES22

APPENDIX26

Introduction

This paper analyses the strategic business units (SBUs) of BP Solar and Shell Renewables within the alternative energy industry, which are part of British Petroleum (BP) and Royal/Dutch Shell Group (Shell), the world's second and third largest energy companies. Environmental analysis highlights the increasing volatility of the global energy market, which is driven by factors including demographics, urbanisation, income levels, market liberalisation and demand. It indicates that the energy industry will eventually evolve towards more alternative energy sources as oil stocks diminish. In this context, critical success factors (CSFs) within the alternative energy industry will be technologies that offer flexible, low cost alternative energy solutions at competitive prices compared with other energy sources.

Resource and capability analysis over the last five years show Shell Renewables to have particular capabilities in technology, project and brand management, and partnership skills across its global operations, but BP Solar to have stronger financial resources. Analysis of their respective business strategies over the last five years show that Shell Renewables has leveraged its capabilities and dedicated reasonable resources towards its alternative energy strategy, acquiring key businesses and engaging in joint ventures. BP Solar, on the other hand, has taken a more cautious approach, investing few financial resources relative to its size, despite commanding a large share of the market. Whilst Shell Renewables is only indirectly affected by the recent oil reserve scandal brought to bear by Shell corporate, this will undoubtedly give it a weaker financial position to draw from than BP Solar. Alternately, BP has tried hard to give the public the impression that BP Solar is a key part of their future business, but so far, this has largely been rhetorical. In terms of performance, the alternative energy market is not expected ...