Porters Five Forces Analysis In Companies Business Essay

Porters Five Forces Analysis In Companies Business EssayThe Environmental analysis dismiss be defined as a study of environs within the organization for the purpose of locating environmental factors that effect on the operations. For the purpose of analysis the business environment we can reason in to three levels Internal environment, Operating environment and General environment. This can be shown in figure as below. spire AnalysisBy the STEEPLE analysis we can examine that which external factors can be influenced the organizations ability to win its vision and mission.FACTOREVENTSSocial FactorsThe life styles of the races is changing payable to economic crisis therefore, they change to use energy for sometimePeople would like to use bio fuel rather than normal fuel due to reduce environmental taintTechnical FactorsThe International Energy Agency states that ersatz energy commercialises forget be underpinned by technological breakthroughs.technology is the key to compet itiveness in the alternative energy industryThe government spending for re reckon on bio fuel and other alternativesEnvironmental FactorsBP should highly concern on Environmental Law certificate of indebtedness of inunct Spill damageEconomic FactorsDue to economic crisis there is a declining demand for energyThere is a increasing demand for utility(a) energy sourcesPolitical FactorsThe global energy market is becoming more unstable because of geopolitical instability.Encouragement of the government towards more sustainable forms of energy due to CO2 emissionLegal FactorsAccording to the environmental law, responsible for Payments on anoint spill damagesTransportation safetyEthical FactorsCharitable bountifulInvestment on break offment programmeTable 01. STEEPLE AnalysisSource EU (2004) The European Union Greenhouse Gas Emission affair Scheme, EUROPA, http//europa.eu.int/comm/environment/climat/emission.htm Accessed 22nd May 2011.Porters Five Forces AnalysisThe Analysis of Port ers five forces help to assess where the precedent of BP lies in Market and also helps to analyze the drawing card of the industry. In addition to that we assess the current strength and future strength needs to plan in the bps competitive position as shown(Source http//notesdesk.com// porters-five-forces-model.jpg -Accessed on 23rd may 2011)Potential EntranceStrict government policies and requirementsHigh technological focus on alternative energy industryLarge initial capital is requiredThreat of SubstitutesAlternative energy due to higher costCompetitive RivalryHigh exit barriersHigh fixed beHigh stakes for Shell Renewable and low stakes for BP Solar.Bargaining Power of BuyersLow volume of buyerLow information of buyersHigh availableness of substitutesBargaining Power of SuppliersLow concentration of alternative energy suppliers (principally just BP Solar and Shell Renewable) strategical Group AnalysisHelps identify who the most take on competitors are and on what basis they compete. We can decide that SHELL is the major competitor in the industry for BP in both geographic coverage and operate diversification by analyzing SGA as followsSWOT analysis for BPStrengthsWorld third largest energy federationStrong Brand loyaltyFinancial strength of the company.It has perpendicular integration operation system.WeaknessesIncrease the petrol expense in UKHas to paid criminal charges due to spread huge amount of oil in the Alaska ocean in 2006.Reduce in natural gas and crude oil production.OpportunitiesHas high investment capacityResearch to investigate alternative fuel much(prenominal) as Hydrogen, Solar, Wind and natural gasIncrease demand for natural gas in USA and Europe countries.Implement more flexible price polices to face their competitors.TreatsUnsound policies related to Environment after oil and toxic spill in 2006.Explosion of refinery tunnels in occasionallyHas big rivals such as Shell and ChevronInstability in some oil and gas producing countri es and regionsTask TwoStrategic Options and role of corporate parentStrategic Options is an principal(prenominal) facet and it helps to craft companys alternatives and provide safe and keep up the competitive situation. The international requirements for energy for the next 20 old age are such that hydrocarbons are still going to have a leading part in meeting that energy demand. BP supports emissions trading mechanisms as a means of putting a value on carbon in order to make appropriate investment decisions.Corporate Mission of the BPBP menti unmatchedd that there goal for next few years to realize the latent impending of their advantage base by improving the skill and effectiveness of everything they do. They will dynamically drive cost and capital efficiency whilst at the same time maintaining the first main concern of safe and reliable operations.Objectives of the BPBP has some objectives for their growth in 2015. And all employees are working as a team to achieve company goa ls.Average 1-2% p.a. volume growth to 2015Underpinned by upward resource base and quality through preference describe sources of growth beyond 2015 will come fromIncreasing deepwaterLeveraging expertise in gasManaging worlds enormous oilfieldsEnabled by application of technologySource- http//www.bp.com/sectionbodycopy.do?categoryId=2contentId=7065607Values and ethical motive of the BPBP is a compilation of resources and there people working together. To attain business objects they focus on sustaining and encouraging their leaders and mental faculty. And they maintain recruitment stands and developing people skills at every level. BP is a well distinguish organization and wants to do some unalike in the world. BP is a performance driven company which is competitively booming. Through all this they prefer high ethical stand.Directions and methods of Strategic OptionsBPs direction is clear and it is the unrelenting pursuit of competitive leadership in delight in of cash costs, capi tal efficiency and margin quality.The Strategy Clock is another suitable way to analyze a companys destructive position in comparability to the contributions of competitors. The Ansoff Growth matrix tool which is helps businesses to decide their product and market growth strategy.Figure 02.Ansoff Market mix(Source- http//tutor2u.net/business/strategy/ansoff_matrix.htm)Evaluating strategies at BPSOP intercellular substance is a tool which can use to identify the company relevant strategies through external environmental factors. As an example BP Opportunities and treats as below and by indentifying the external environmental factors can recognize the relevant strategies options.Has high investment capacityInvest in HR development and through that develop the skills of the staff members. A same time invest in market opportunities.RD to investigate alternative fuel such as Hydrogen, Solar, Wind and natural gasBy research can find the best alternative and company can give attention to t hat.Extension of acquisition of North sea area cease develop deep sea oil well.Increasing demand for natural gas in USA and European countries.Efficient and effective resource parceling to maximize profit.Implement more flexible price polices to face their competitors.By price reducing can get more customers on their productsGas and Oil searchingWill help to increase their market values and can demand them among the competitorsThreatsStrategic OptionUnsound policies related to Environment after oil and toxic spill in 2006.Understand the policies and work with less effect to environmentExplosion of factory tunnels in occasionallyBy keeping the strike out image without harm can face the problemHas big rivals such as Shell and ChevronTo make company as No1. And more promotional worksSold corporate owned stations.Buy the stationsPipeline decompositionShould check the pipeline back and do the needful changersInsecurity in some oil and gas producing countries and regionsShould find some more producers in case to use.Task Three expert Objectives of BPBP Objectives are prepared according to SMART (Specific, Measurable, Achievable, Realistic, and Timed).That means it should be particular about what we are going to achieve and should calculate about the objectives.There are a several types of objectives like growth objectives, outcome objectives, personal objective that all can be done in the SMART format.BPs five year plan objectives are,Increase profitability by 20%Increase productionFinancial gain by serving to the increasing demandBuild brand value that was affected by the oil spillsBP spends on growing technology budget on potentially most competitively profitable innovations both in open and new cater 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 RD processes which is unmatchable by the rivals easily. piece of music facing major challenges of dilapidated supplies and defense of supply in oil and gas, global warming and insist for pure energy in major markets, BPs percentage of expend on novel technologies is growing.Five year development plan for BPBusiness plan is a statement about companys future goals and plans to achieve those goals. This can be externally focus or internally focus.BPs Strategies in development can position as,Upstream growthDownstream lapsingAlternative Energy alert disciplined Corporate overviewIn the upstream will hub on cost and capital efficiency to distribute profitable growth. In the downstream will drive additional efficiencies and a focus on quality and incorporation. They will maintain their disciplined approach to substitute energy and will carry on unlock corporate efficiency through a culture of uninterrupted enhancement.Evaluating and implementing the planIn business strategy, Johnson, Scholes and Whittington shows a model in strategic options are evaluated next to three key success cr iteria such as Suitability, Feasibility, and Acceptability.RecommendationsStrategic investments in RD to exploit new market opportunities and to maximize effectual and effective productions.To negotiate with governments and other low and medium sized firms in the industry through a joint profit sharing process to search for new avenues of the market.Recruit experienced and capable sales, marketing and research experts.Re-build the brand value and affinity using new media opportunities like social media to reduce the obscure mark occurred as a consequence of oil spills.Streamline production and business operations by using just in time (JIT) and creating a agile end at the supplier end of the operations.ConclusionStrategic planning plays a vital role in strategic management and the leadership. Strategic planning can divide in to three stages as strategic Analysis, Strategic Options and Evaluation and Implementation. The British petroleum Corporation is a well launch organization i n petroleum industry and here it is illustrated through the strategy and competitive advantages of the BP and the technical tools which they could could use to analyze the situations. The porters five forces investigation helped identifying the competitive environment and market situation BP is facing.There are major rivals like Solar, Sharp, Chevron in the market and BP engaged with mass production. By the SWOT analysis company situation and the market position identified which extracts the internal and external environment of the company. BP is focused on customers and they believe in their mass productions over its rivals.Company can use strategy clock, Ansoff growth matrix tools to analysis their position in the market. To develop strategic options first it should identify the external context and priorities and clusters. Then it should develop the strategic options. SOP matrix is one of the best tools to identify the strategies of the company. BP has a decentralized en route fo r RD units. It also drives the strategic positioning of BP in contest among rivals. Cost advantage exits when company can give same benefits as competitor with lower cost. And differentiation advantage exits when the company can make different benefits or the value to the customer from their products (Broad differentiation strategy). As an Example BP is using combination of Crude oil and natural energy such as solar power to give differentiation to their customers and it is a well successful strategy.STEEPLE analysis also can be used to investigate the external environment in a business operates and concerned with the political, economic, social factors influential industry change and helps to gain a better understanding for external conditions for growth in a market. The porters five forces investigation helps to diversity a competitive environment. For example, BP analyzes the market 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 oil crisis and environment issues. BP solar becomes profitable but it is not prominently spread among the public, so government troth is important to become popular of solar power. BP business plan has advantage in the Research and investigation area. The crude oil plus the solar power combinations 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 profits.They entered into oil plus solar power combination and they should strategically positioned the product segmentation, improve cost efficiency and enter into new market opportunities through the findings of RD to increase their profits. They have created value through technology innovation and this is a barrier for their competitors. But the opportunity is yet to be sc rutinized with more investments to the RD. By a comprehensive situation analysis company can create strategic options to devise organizations external atmosphere and can exploit the potential.