SUMMATIVE ASSIGNMENT

Summative Assignment: Strategic Position of British Petroleum

Introduction3

British Petroleum (BP)3

Business Environment of British Petroleum4

Resources and Capabilities of Business Petroleum6

Competitive Advantage of British Petroleum8

Strategic Recommendations9

Conclusion9

References11

Summative Assignment: Strategic Position of British Petroleum

Introduction

This assignment offer analysis of British Petroleum (BP). The assessment includes the business environment of BP in Sub-Saharan Africa, particularly South Africa as regards to the position in the midst of the rivals, as well as how attractive the industry is in which BP operates. Moreover, this paper also determine the key business strategies of BP and also several resources and capabilities of the firm, which has given BP a competitive advantage over its competitors.

The purpose of this assignment is to create a link between business environment and BP's strategy and also points out BP's competences has based its strategy on by evaluating the fitness of BP's strategy to its capabilities and resources over the last years. In order to do so, the following models were used: Porter's five forces, Resource Based view (RBV), porter's generic strategies, strategic groups, value chain analysis and the strategic fit.

British Petroleum (BP)

British Petroleum is one of the well-known oil and gas companies that deal in petroleum and alternative energy, and serve more than 13 million customers in over 100 countries across the globe. The key focus of BP is on petroleum but also operates in gas and oil. BP brands include Aral, Castrol, Arco, Ampm and Wild bean café, and the energy mix of the BP.

During 1920, BP has started its business operation and has its head quarter in Cape Town. Today, BP is the third largest oil companies in South Africa. The company has 553 branded service stations and 26 depots in South Africa. BP hold 50% market share of Petroleum Refineries at Reunion, in addition, also has 50% stake in the SAMCO (South African Lubricants Manufacturing Company) (www.bp.com).

Business Environment of British Petroleum

The most effective and useful tools to analyse the business environment is the five forces model of competition. Porter's five forces model demonstrates the competitiveness of British Petroleum in the South African industry and also determines how attractive this industry is.

The competitive rivalry level is high; oil and gas industry are typified by huge corporations that create low differentiated products, and there is no or less substitution threat, along with low new entrant threat in the South African oil and gas industry.

BP encountered low threat of substitutes as substitutes includes alternative fuels like nuclear energy, hydroelectricity, wind power, solar power, gas and coal, which are in phase of development, in addition, incurs high production cost. Oil is of immense significance and a key source that runs factories, means of transportation, and to generate electricity; thus, cannot be substituted (EIA, 2013, pp.1-14).

In South Africa, buyers have a balance of power. Oil refers to a product, and a single oil company is not considerably different from others and this forces buyer to go in better contract terms and favour lower ...