Porters Five Forces Research In Companies Business Essay

The Environmental analysis can be defined as a study of environment within the organization for the purpose of finding environmental factors that effect on the operations. For the purpose of analysis the business enterprise environment we can categorize in to three levels: Internal environment, Functioning environment and Standard environment. This is shown in physique as below.

STEEPLE Analysis

By the STEEPLE research we can verify that which external factors can be influenced the organization's capacity to accomplish its vision and quest.



Social Factors

  • The life styles of the people's is changing due to economic problems therefore, they change to use energy for sometime
  • People would like to use bio petrol somewhat than normal fuel due to lessen environmental pollution

Technical Factors

  • The International Energy Agency states that substitute energy markets will be underpinned by technical breakthroughs.
  • technology is the main element to competitiveness in the choice energy industry;
  • The federal spending for research on bio gas and other alternatives

Environmental Factors

  • BP should highly concern on Environmental Law
  • Responsibility of Olive oil Spill damage
  • Economic Factors
  • Due to financial crisis there is a declining demand for energy
  • There is a increasing demand for Different energy sources

Political Factors

  • The global energy market is now more unpredictable because of geopolitical instability.
  • Encouragement of the government towards more sustainable forms of energy scheduled to CO2 emission

Legal Factors

  • According to environmentally friendly law, responsible for Payments on essential oil spill damages
  • Transportation safety
  • Ethical Factors
  • Charitable giving
  • Investment on development programme

Table 01. STEEPLE Analysis

Source: European union (2004) The European Union Greenhouse Gas Emission Trading Structure, EUROPA, http://europa. eu. int/comm/environment/climat/emission. htm [Accessed 22nd May 2011].

Porter's Five Pushes Analysis

The Analysis of Porter's five pushes help to evaluate where the power of BP is based on Market and also really helps to analyze the appeal of the industry. In addition to that we assess the current durability and future strength needs to plan in the BP's competitive position as shown

(Source: http://notesdesk. com/. . . / porters-five-forces-model. jpg -Seen on 23rd may 2011)

Potential Entrance

  • Strict government policies and requirements
  • High technological focus on choice energy industry
  • Large preliminary capital is required

Threat of Substitutes

  • Alternative energy anticipated to higher cost

Competitive Rivalry

  • High leave barriers
  • High fixed costs
  • High stakes for Shell Renewable and low stakes for BP Solar.

Bargaining Electricity of Buyers

  • Low level of buyer
  • Low information of buyers
  • High availability of substitutes

Bargaining Electric power of Suppliers

  • Low awareness of alternative energy suppliers (principally just BP Solar and Shell Renewable)

Strategic Group Analysis

Helps identify who the most direct competitors are and on what basis they remain competitive. We can determine that SHELL is the major competition on the market for BP in both geographic coverage and service diversification by analyzing SGA the following

SWOT research for BP


  • World third largest energy company
  • Strong Brand loyalty
  • Financial power of the business.
  • It has vertical integration operation system.


  • Increase the petrol price in UK
  • Has to paid legal charges credited to spread large amount of essential oil in the Alaska Sea in 2006.
  • Reduce in natural gas and crude oil production.


  • Has high investment capacity
  • Research to research alternative gas such as Hydrogen, Solar, Wind flow and natural gas
  • Increase demand for natural gas in USA and Europe countries.
  • Implement more flexible price polices to handle their rivals.


  • Unsound insurance policies related to Environment after olive oil and toxic spill in 2006.
  • Explosion of refinery tunnels in occasionally
  • Has big competitors such as Shell and Chevron
  • Instability in a few coal and oil producing countries and regions

Task Two

Strategic Options and role of commercial parent

Strategic Options can be an important facet and it helps to build company's alternatives and offer safe and continue the competitive situation. The international requirements for energy for the next 20 years are such that hydrocarbons remain going to have a leading part in meeting that energy demand. BP facilitates emissions trading mechanisms as a way of adding a value on carbon to make appropriate investment decisions.

Corporate Mission of the BP

BP mentioned that there goal for next few years to realize the latent impending of the advantage platform by bettering the efficiency and effectiveness of everything they certainly. They'll dynamically drive cost and capital efficiency whilst at the same time retaining the first priority of safe and reliable businesses.

Objectives of the BP

BP has some targets for their expansion in 2015. And everything employees will work as a team to attain company goals.

Average 1-2% p. a. volume development to 2015

  • Underpinned by upwards resource foundation and quality through preference
  • Key resources of growth beyond 2015 will come from:
  • Increasing deepwater
  • Leveraging skills in gas
  • Managing world's great oilfields
  • Enabled by application of technology

Source-: http://www. bp. com/sectionbodycopy. do?categoryId=2&contentId=7065607

Values and ethics of the BP

BP is a compilation of resources and there people working mutually. To attain business items they focus on sustaining and motivating their leaders and staff. Plus they maintain recruitment stands and developing people skills at every level. BP is a proper distinguish firm and would like to do some different on the planet. BP is a performance influenced company which is competitively flourishing. Through all of this they choose high honest stand.

Directions and ways of Strategic Options

BP's direction is clear which is the unrelenting quest for competitive leadership according of cash costs, capital efficiency and margin quality.

The 'Strategy Clock' is another suitable way to investigate a company's detrimental position compared to the efforts of rivals. The Ansoff Development matrix tool which is helps businesses to choose their product and market progress strategy.

Figure 02. Ansoff Market mix

(Source-: http://tutor2u. net/business/strategy/ansoff_matrix. htm)

Evaluating strategies at BP

SOP Matrix is a tool which may use to identify the business relevant strategies through external environmental factors. For example BP Opportunities and goodies as below and by indentifying the exterior environmental factors can recognize the relevant strategies options.

  • Has high investment capacity
  • Invest in HR development and through that develop the abilities of the staff members. A same time spend money on market opportunities.
  • R&D to research alternative fuel such as Hydrogen, Solar, Wind flow and natural gas
  • By research can find the best alternative and company can provide focus on that.
  • Extension of acquisition of North sea area
  • Can develop profound sea olive oil well.
  • Increasing demand for gas in USA and European countries.
  • Efficient and effective tool allocation to maximize profit.
  • Implement more versatile price polices to face their competition.
  • By price lowering can get more customers on their products
  • Gas and Oil searching
  • Will increase their market prices and can demand them among the list of competitors


Strategic Option

  • Unsound insurance policies related to Environment after petrol and toxic spill in 2006.
  • Understand the plans and use less result to environment
  • Explosion of factory tunnels in occasionally
  • By keeping the brand image without injury can face the problem
  • Has big rivals such as Shell and Chevron
  • To make company as No1. And even more promotional works
  • Sold corporate owned stations.
  • Buy the stations
  • Pipeline decomposition
  • Should check the pipeline back and do the needful changers
  • Insecurity in some coal and oil producing countries and regions
  • Should find even more producers in case to make use of.

Task Three

SMART Goals of BP

BP Objectives are prepared according to SMART (Specific, Measurable, Achievable, Realistic, and Timed). That means it ought to be particular in what we are going to achieve and should calculate about the targets.

There are a several types of objectives like process goals, outcome goals, personal objective that can be carried out in the SMART format.

BP's five yr plan objectives are,

Increase success by 20%

Increase production

Financial gain by serving to the increasing demand

Build brand value that was afflicted by the olive oil spills

BP spends on growing technology budget on possibly most competitively profitable innovations both in available and new electric power spaces. It is both a strategic option and an opportunity for BP when comparing with the rivals as BP is strategically positioned themselves in a highly innovative R&D techniques which is unmatchable by the rivals easily. While facing major obstacles of dilapidated materials and defense of supply in coal and oil, global warming and insist for clean energy in major market segments, BP's ratio of expend on book technologies is growing.

Five season development plan for BP

Business plan is a affirmation about company's future goals and ideas to accomplish those goals. This can be externally focus or internally target.

BP's Strategies in development can position as,

Upstream growth

Downstream turnaround

Alternative Energy: alert disciplined Corporate and business overview

In the upstream will hub on cost and capital efficiency to send out profitable growth. Inside the downstream will drive additional efficiencies and a concentrate on quality and incorporation. They'll maintain their disciplined method of substitute energy and will carry on unlock corporate efficiency via a culture of continuous enhancement.

Evaluating and applying the plan

In business strategy, Johnson, Scholes and Whittington shows a model in strategic options are examined next to three key success standards such as Suitability, Feasibility, and Acceptability.


Strategic assets in R&D to exploit new market opportunities also to maximize reliable and effective productions.

To work out with governments and other low and mid-sized firms in the industry through a joint profit posting process to find new strategies of the marketplace.

Recruit experienced and able sales, marketing and research experts.

Re-build the brand value and affinity using new mass media opportunities like sociable media to lessen the black draw occurred as a consequence of engine oil spills.

Streamline development and business functions by using just in time (JIT) and building a agile end at the supplier end of the procedures.


Strategic planning performs a essential role in strategic management and the authority. Proper planning can split in to three levels as strategic Research, Strategic Options and Evaluation and Implementation. The United kingdom petroleum Company is a well established company in petroleum industry and here it is illustrated through the strategy and competitive features of the BP and the specialized tools that they could could use to analyze the situations. The porter's five pushes investigation helped discovering the competitive environment and market situation BP is facing.

There are major competitors like Solar, Clear, Chevron on the market and BP engaged with mass production. Because of the SWOT analysis company situation and the market position recognized which extracts the inner and exterior environment of the company. BP is focused on customers and they have confidence in their mass productions over its competitors.

Company can use strategy clock, Ansoff growth matrix tools to analysis their position on the market. To develop proper options first it should identify the exterior framework and priorities and clusters. Then it should develop the tactical options. SOP matrix is one of the better tools to recognize the strategies of the business. BP has a decentralized on the way for R&D models. In addition, it drives the tactical setting of BP in competition among rivals. Cost advantage exits when company can provide same benefits as rival with less expensive. And differentiation gain exits when the company can make different benefits or the worthiness to the client from other products (Broad differentiation strategy). As an Example BP is using combination of Crude petrol and natural energy such as solar power to provide differentiation to their customers which is a well successful strategy.

STEEPLE analysis can also be used to research the exterior environment in a small business operates and concerned with the political, economic, social factors important industry change and really helps to gain an improved understanding for external conditions for progress in a market. The porter's five forces investigation helps to diversity a competitive environment. For instance, BP analyzes the marketplace for Quality oil production.

BP entered into solar market in 1973 and produced BP solar in 2000, it was one of main strategy to face current engine oil turmoil and environment issues. BP solar becomes profitable but it is not prominently pass on among the general public, so government engagement is important to be popular of solar powered energy. BP business plan has gain in the Research and inspection area. The crude engine oil plus the solar powered energy combos was very successful strategy implemented in recently. Products segmentation, explorations and productions, significantly company restructuring, improve cost efficiency, centralized company departments are their current strategies to compete with rivalry and increase company gains.

They got into into engine oil plus solar powered energy combination plus they should strategically placed the product segmentation, improve cost efficiency and enter new market opportunities through the findings of R&D to increase their income. They may have created value through technology advancement which is a barrier for their competition. But the ability is yet to be scrutinized with more investment funds to the R&D. By a thorough situation research company can create proper options to devise organization's external atmosphere and can exploit the.

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