SWOT Analysis of BP

Summary of SWOT Analysis of BP

BP, or British Petroleum, stands as a major player in the global energy sector. This BP SWOT analysis highlights its diversified revenue streams, strong brand loyalty, and recognised efforts towards corporate social responsibility as key strengths. BP owns several subsidiaries, such as Amoco and Castrol, which help reduce reliance on oil alone. The company’s “Beyond Petroleum” campaign has improved its image and broadened its market reach.

However, BP faces significant weaknesses. The company has a history of oil spills and disasters, which have damaged its reputation and led to heavy fines. Poor crisis management and executive dishonesty have further harmed BP’s credibility. The shift towards clean energy and the closure of oil wells have resulted in job losses, reinforcing a negative public image.

Opportunities for BP include leading the alternative energy market by investing in wind, solar, and hydrogen. Expanding into new regions and developing partnerships for clean energy infrastructure can help BP reposition itself as an innovator. Growing its non-petrochemical subsidiaries could also boost revenue.

Threats to BP include ongoing environmental risks, potential lawsuits, and regulatory changes. Competitors like Shell and Chevron are perceived as more responsible, while new alternative energy firms threaten BP’s market share. BP’s damaged reputation and economic pressures from volatile oil prices further challenge its future growth.

In summary, this British Petroleum SWOT analysis shows that BP must address its weaknesses and threats while leveraging its strengths and opportunities to remain competitive in a changing energy landscape.

Introduction to the BP SWOT Analysis

This SWOT analysis of BP (British Petroleum), examines one of the world’s largest energy companies. BP earns a global reputation within the petrochemical business, with headquarters in London

The company participates in the London Stock Exchange and the New York Stock Exchange as well as is listed on the FTSE 100 Index. The company has experienced challenges in recent years, including costly and brand-breaking accidents as well as pressure to address global climate change targets and focus on corporate social responsibility. The company’s strengths and weaknesses are assessed in order to make recommendations about how it can take advantage of opportunities while addressing any perceived threats that may appear in the short or long-term for this company.

Strengths

• BP has a number of subsidiaries and retail brands that include Amoco; ARCO; BP Express, BP Connect; BP Travel Centre; AM/PM; Burmah Castrol, etc., which provide the company with a diversified revenue portfolio rather than simply relying on its energy business.
• BP Amoco has a strong brand loyalty to its oil business.
• The ‘Beyond Petroleum’ slogan has served BP well so that it is being recognised for its participation in other industries and markets.
• BP has worked extensively to rebuild its image in the wake of the recent accidents and mishandling by executives, including a greater focus on corporate social responsibility as well as transparency and more thoughtful communication.

Weaknesses

• The company has faced many oil spills and disasters that led to fatalities and significant environmental damage around the world.
• Company executives were dishonest and poorly handled these disasters, which further tarnished their image and led to massive penalties, fines, and costs to assist those areas that were damaged.
• The ongoing focus on climate change and the reduction in the use of fossil fuels has put more pressure on the company to migrate into providing clean energy options.
• BP has closed many oil wells, leading to many layoffs, which have occurred in poor economic cycles, furthering the brand image that the company is uncaring and greedy.
• The competition has been positioned as more responsible and attractive due to these many missteps, putting BP in the position of having to play catch-up to the market leaders in their industries.

Opportunities

• The company has the potential of becoming a market leader in many alternative fuel and energy markets if it can invest in research and reposition its strategy. These market opportunities include wind, solar, and hydrogen.
• There are opportunities for BP to expand into new geographic territories with its alternative fuel and energy opportunities.
• BP has the opportunity to partner with certain countries in developing solutions for infrastructure issues in order to move into the use of clean energy options, positioning the BP brand around innovation and environmental responsibility.
• BP can focus on further developing many of its subsidiaries that are outside of its petrochemical focus to enhance revenue streams in these areas.

Threats

• Environmental issues may continue to be a threat if the company does not formalize its corporate social responsibility and put it at the forefront of its strategy, including revising workplace safety issues in order to reduce refinery explosions, oil leaks and spills, pipeline corrosion and other environmental hazards.
• The company will continue to face lawsuits and penalties if it does not address these environmental issues and poor safety practices, which will significantly impact the company’s sustainability.
• It faces increased competition from other companies like Shell and Chevron, which are dealing with these environmental issues better than BP and have enhanced their brand reputation.
• The company also faces competition from the emergence of specialised alternative energy companies that are offering the technology and affordability to encourage greater migration away from the reliance on fossil fuels, which could decrease BP’s customer base.
• BP’s tarnished brand reputation continues to be a threat to its future growth and profitability potential due to how it handled the last major disaster associated with the company.
• The global, regional, and local regulatory environments continue to be a threat as changes in regulations impact how BP can do business.
• Economic pressure is a threat, especially in terms of volatile oil prices around the world, furthering the need to focus on the migration to alternative fuel for its energy solutions.

References for SWOT Analysis of BP

• Harrell, L., ‘British petroleum (BP): a critical analysis of its corporate and international strategies’, International Journal of Research in IT and Management.
• Arora, M., & Lodhia, S., 2017. The BP Gulf of Mexico oil spill: Exploring the link between social and environmental disclosures and reputation risk management. Journal of Cleaner Production, 140, pp. 1287-1297. https://doi.org/10.1016/J.JCLEPRO.2016.10.027.
• Kanso, A., Nelson, R. & Kitchen, P., ‘BP and the Deepwater Horizon oil spill: A case study of how company management employed public relations to restore a damaged brand’, Journal of Marketing Communications, 2 October 2020.
• Amernic, J. & Craig, R., ‘CEO speeches and safety culture: British Petroleum before the Deepwater Horizon disaster’, Critical Perspectives on Accounting, 1 September 2017.
• Helms, M. & Nixon, J., ‘Exploring SWOT analysis – where are we now?’, Journal of Strategy and Management, 10 August 2010.
• Ceil, C., ‘Strategic Report on British Petroleum’, EnergyRN: Other Petroleum (Sub-Topic), 3 August 2019.
• Soeprapto, D.D., ‘SWOT analysis of BP. Tapera: A public housing savings implementing agency in Indonesia’, International Journal of Research In Business and Social Science, 28 October 2020.