BP which was earlier called British Petroleum is one of the world leaders in the oil & gas segment. The origin of the company can be traced back to the year 1908 when a Persian oil company discovered traces of a massive deposit of oil in Iran.
Today is the addition to Oil and gas exploration and production BP is also involved refining/marketing and supply of petroleum products and has interests in the manufacturing and marketing of Chemicals, Gas & Power generation and the manufacture of Photovoltaic (solar) cells. BP is also one of the barometer companies for the economy of the United Kingdom and the ups and downs of the company have a crucial impact on the economy of the region. BP is the third largest oil & gas reserve in the world and the largest retail seller of gasoline in the US.
The company has operations in Europe, North America, South America, Africa, and the Asia Pacific. The company is also one of the world’s biggest sellers of aviation fuel and lubricants for the shipping economy. The company registered an annual turnover of 240 billion USD in the year 2018.
Strengths in the SWOT analysis of BP
Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. The following are the strengths of BP :
- Diversified interests: Though the key area of operation of British Petroleum is oil & gas, the company has diversified into number of areas such as lubricants, energy, aviation fuel, information technology etc. through its numerous subsidiaries like Amoco; ARCO; BP Express, BP Connect; BP Travel Centre; AM/PM; Burmah Castrol, etc. This helps the company to diversify its risk.
- Loyal Customers: The customers of BP especially in the oil business are highly brand loyal. They have been continuously sourcing from the company and enjoy a stable and long-standing relationship with them. Moreover, some of the customers of the company use British Petroleum to meet all their energy needs.
- Global leadership: The company is a market leader in most of its categories. Besides being the biggest player in oil & gas in the United Kingdom the company also plays a critical role in maintaining an economic balance in the region. The company is the market leader and the biggest seller of gasoline in the United States.
- Network: The company has operations across the world in all its sectors and the company has operations in Europe, North America, South America, Africa, and the Asia Pacific. The company sells through its subsidiary AMOCO in the eastern United States and ARCO in the west and has a total of 17,150 service stations in this region. The company has around 11,850 BP branded service stations, 1,525 in the UK and the company sells its Castrol branded lubricants in around 50 countries.
- Strong customer relationships: British Petroleum always ensures that they maintain very strong ties with their customers. The company ensures that they understand their customers in depth and their requirements and they try to ensure that they do not let their customers witch different brands by catering to all their energy needs.
Weaknesses in the SWOT analysis of BP
Weaknesses are used to refer to areas where the business or the brand needs improvement.
- Inability to penetrate successfully in non-energy markets: British Petroleum has diverse interests in a number of related areas and this is mostly in the energy-related domains. However, the poor presence ion nonenergy sectors may affect the business in the long run.
- Controversies: The company got into a number of scandals from oil spills in various parts of the world which affected their sustainability rating drastically and affected the goodwill with stakeholders. Their oil spills have also caused loss of lives to marine life and deteriorated the environment drastically.
- Ethical Issues: British Petroleum also faced a number of scandals from dishonest transactions from employees and they handled the controversies related to the spillage disastrously which further damaged the company and also created an image that the company was not genuinely concerned about the society or the environment.
Opportunities in the SWOT analysis of BP
Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its returns. Some of the opportunities include:
- Alternative energy: British Petroleum has a prominent presence in the energy sector and the company can look at alternate energy options such as tidal or wind energy. The global focus on sustainability is creating a lot of opportunities in alternate energy options. This can be the right track for the growth of the company.
- Expansion to infrastructure sector: BP can try to engage with developing economies to create solutions for infrastructure challenges which makes use of alternative energy options, which will not just mean business but can also improve the image of the BP brand making to look environmentally savvy.
Threats in the SWOT analysis of BP
Threats are those factors in the environment which can be detrimental to the growth of the business. Some of the threats include: