Company overview

British petroleum (BP) is ace of the largest naught companies dealing in aro utilization for transportation, slide fastener for heat and light, retail work and petroleum products. The social clubs transnational headquarters is in London. The ac fellowship has operations in more than century countries and employs oer 96,000 hatful. The corporation has products under the BP, Castrol, Arco, am/pm, and batty Bean Cafe brand (BPplc, astir(predicate) Bp, 2009). The gild ope reckons under ii study argumentation segments exploration and employment, down and merchandise and BP alternative cogency.The high society basic aloney finds, extract, prevail oil and gas. The attach to in any case makes fuels and products, sells fuels and products as well as generating low ascorbic acid energy in a answer up to(p) way. The friendship operates in six continents s bring outhmost America, North America, Europe, Australasia, Asia and Africa (Vault. com, 2009). BP is also well cognise for its innovative engine room which puzzles at providing energy to meet the customers demand through with(predicate) high-octane products. Investing in low snow energy is also another excerption that the gild is exploring (BPplc, About Bp, 2009). Strategic scrutiniseThe strategicalalal evictvas of a corporation is an octette bill process that gener wholey encompasses a holistic analysis of the familiarity. The basic level in strategic audit is to raise the current position which pull up stakes foster the caller-up chart the way forward. A strategic audit helps the company to get up strategies and select the top hat strategic alternative(s) for implementation. The rootage whole metre is the analysis of the current situation. This involves the audit of the current performance and strategic posture. received performance is evaluated in terms of profitability, trade sh be, and return on investment.Strategic posture looks at the missionary station, objectives, strategies and policies (BPplc, 2009 dodge presentation, 2009). The second step is a look at the corporal governance. This instrument analysis of the board of directors and top circumspection in terms of their structure, names and region to the company Scanning the external environment for opportunities and threats is the next step of a strategic audit. Under this stage, the company looks at the social environment, task environment and lowestly itemization all told the above circumstanceors.The next step is the analysis of the crushive environment i. e. strengths and weaknesses. Here, the corporate structure, culture, preferences (marketing, finance, research and bringment, operations and logistics, human resource management and breeding systems) is looked into. A compendious of these factors is thusly prep bed (BPplc, 2009 Strategy presentation, 2009). after smell at the external and internal environments, the company then analyses its strengths, weakn esses, opportunities and threats (SWOT).These argon then linked to the companys mission and objectives to frame any relevance. The next step of the strategic audit is the analysis of the strategic alternatives in fiat to select the best strategy (ies) to be recommended. The recommendation should be justified by looking at the potential, changes and pretends of the strategy. After making the recommendations, the next step is the implementation of the proposed strategy (ies). The implementation will include assigning duties on who is to develop these strategies. The pecuniary aspect and operating procedures should be analyzed.The last step of the strategic audit is the evaluation and control. Evaluation and control involves a look at the current information system i. e. whether it can provide adapted feedback and whether at that place are enough controls (BPplc, 2009 Strategy presentation, 2009). Strategic Alternatives In formulating the best strategic alternatives, the compan y has to consider the economic, socio-cultural, political-legal, technological and financial strengths and contends facing the company. Economic environment This involves looking at the economic environment.The company operates in an industry that has other large companies e. g. Shell, Chevron, Exxon Mobil, tot up and other smaller companies. All these companies defend the resources and technical ability to compete at the aforesaid(prenominal) level as BP Plc. This is w herefore the company has accented on bell reduction through measures like round reduction and efficient production. The company has also centre on alternative energy e. g. solar and wind. This is as a contribute of the challenging operating environment where there has been a growing shift to parkland energy that has minimal pollution.In an industry set about with cost summation production costs, the company has been on track by focusing on means and ways of reducing their costs. The focus has been on re ducing the number of stave and reducing the number of senior positions in the company by 20%. This strategy has borne fruit with the flattening of the cost curve of the company while those of the competitors keep on rising. The companys focus on juvenile technologies has resulted into ameliorated production capacity. In fact the overall production trend for all the major companies has been declining. BP Plc.has defied this trend by increase its production in the year 2007-2008. The technology used by the company includes advance Gas Injection and Water deluge technologies that take a shit enabled the company to push the limits of the reservoirs. The fall behind in oil prices means declining revenues. In order to increase revenues, the company has concentrate on reducing the performance crevice by restoring revenues in areas like Toledo, ameliorate offer optimization in petrochemical and marketing. The company area of focus for petrochemicals is Asia where there is rising d emand. The company has also established honor chains for its fuel production.Value chains are those activities that create value from the supply to the final delivery to the consumer. This has been achieved through integrated supply and trading which has lead to more revenues. In a bid to increase its oil reserves, the company has also partnered with TNK of Russia. The partnership has resulted in 30% increase in production. Socio-cultural The company has tried to endear itself to the companionship in which it operates. BP achieves this through training and employing local round at all levels. The aim here is to be a local company by creating partnerships with the local confederacy.BP strategic aim is to burn the levels of resistance to its operations by avoiding cultural conflicts as well as social effects. The company has entered into partnerships with the local community in terms of education, encouraging enterprise, promote good governance, partnership in cosmos health, ac cess to energy, giving and volunteering, safeguarding human rights, as well as development through community case studies. All these activities are targeted at enhancing and fostering the relationship surrounded by the company and all the community in which it operates thus reducing conflicts between the community and the company.Political-legal Some of the challenges that the company could face are the political/ legal. This is because the company has operations in many countries that whitethorn be subject to political instability. To mitigate this, the company has form partnerships with local companies and thus reduces resistance towards the company consequently the company is able to increase its operations and revenues. Rigid legal regimes concerning the operations of foreign companies may negatively impact the operations of the company. The company has reduced this by loving in partnerships with local companies.Taxation and licensing may vary from country to country. This may have negative impacts on the companys operations. Exploration and production rights may not be granted to the company. BP has overcome this challenge by partnering with the governments of respective countries through agreements. technological In a bid to advance its operations and increase productivity, the company has follow innovative technologies. Some of these technologies include the dazzling water which uses new inter-well polymer treatment which last improves water flood Recovery.The Company has focused on technology to come up with innovative approaches that can increase production as well as reckon energy challenges Financial information BP plc has been able to grow its net income by 39% to $26. 2 billion which is the highest development rate registered by major energy companies. immediate payment flow from operations also grew 54% to $ 38. 1 billion on a year on year luck basis. The company was also the only crack major to register growth in reported volumes in new reserves. The company registered a growth of 1% on year on year percentage basis. Apart from operations, the company utilizes debt to finance its activities.The debt is at the rate of 20-30%. All these financial info implys that the company is focused on growth by efficiently using its exchange resources to generate more sales and improve on the shareholders wealth by engaging in share buy backs. Recommended strategy Based on the analysis of all the above factors, some of the available strategies are Cost reduction strategies Alternative energy by diversification Focus on growing markets growth Creating value on existing products Partnership to grow engine room leadership Continuous improvement These strategies can be broadly classified into two directional i.e. growth and retrenchment strategies. The company can utilize the growth strategies in its upriver segment (exploration and production) and retrenchment strategies on its down stream subscriber line ( refining , convenience, refining) (Wheelen, 2006) execution of instrument of the strategy Strategy implementation involves all the activities and choices that are required for the execution of a strategy. The implementation process basically decision making who is to carry out the pattern what essential be done and how are the selected people selected to carry out the strategic plan going to do it (Wheelen, 2006).These strategies are normally executed by diverse heads of business segments subordinated by other employees within the business segments. This has been done through budget allocations, programs that indicate the time frame in which the various strategies need to be implemented and the use of procedures e. g. the Operating Management System that covers employee capabilities to insecurity assessment. Some of the programs used by the company are those of closing the performance kerfuffle which runs from 2008 to 2011, and the reduction of the number of employees in refining and marketing from mid 2007 to the end of 2009 by 3,500.After deciding on who and what must be done, the company must decide on how the strategy is going to be implemented. How a strategy is to be implemented power involve developing new organisational structure. For BP plc, to implement some of its strategies, the company has inflexible to eliminate certain senior and young positions. Evaluation and control This is the process by which a company can admonisher its corporate activities and performance results in order to compare the positive performance with the sought after performance. Evaluation and control provides a feedback machine where corrective measures can be interpreted where necessary (Wheelen, 2006)Evaluation and control can be summarized into the following 5 steps model what to measure Establish standards of performance prize actual performance Compare actual performance with the standards Take corrective reach The company has set out plans to reduce costs and improve on capability on its operations. The company wants to grow its upstream business (exploration and production) while at the same time turning around its downriver business. Upstream business growth is deliberate by growth in reserves, increase exchange percentage, and getting more out of reservoirs.Downstream business is to be improved through cost reduction by restructuring the companys operations e. g. by retrenchment and recapitalizations Improved bottom-line, high reserve permutation percentages, efficient operations, growth in reserves are some of the standards of performance that the company uses to gauge performance. Actual performance is careful at specified times e. g. for BP plc, restoring revenues from refining performance, improved supply optimization and circumference capture in petrochemical and marketing has a time frame of 2008-2011The comparison of actual performance against standard performance has to be done in order to establish the current pos ition for ex deoxyadenosine monophosphatele in 2008 the production grew 1. 5% while the replacement reserve was 136% which was more than the minimum 100% replacement. If the actual performance does not ascertain the expected results, then corrective proceeding needs to be taken. An ex international amperele is the overhaul of capacities in Texas City so as to boost refining and consequently revenues. References BPplc. (2009, meet 3rd). 2009 Strategy presentation. Retrieved April 15th, 2009, from Bp. com http//www. bp.com/liveassets/bp_internet/globalbp/STAGING/global_assets/downloads/I/IC_bp_strategy_presentation_march_2009_script. pdf BPplc. (2009, sue 3rd). About Bp. Retrieved April 15th, 2009, from Bp. com http//www. bp. com/marketingsection. do? categoryId=2&contentId=7013628 Vault. com. (2009, April 14th). Indusrty Overview. Oil and Gas. Retrieved April 15th, 2009, from Vault. com http//www. vault. com/nr/main_article_detail. jsp? article_id=22843159&cat_id=0&ht_t ype=7. Wheelen, J. D. (2006). Essentials of Strategic Mnagement. New Jersey prentice Hall. (BPplc, 2009 Strategy presentation, 2009)