Marketing strategy fundamentals and applications

British Petroleum

Brief Summary of Marketing Issues and Strategies

BP's many latent strengths, from being able to successfully explore and discover vast oil reserves to their ability to refine, sell and even speculate on other natural resources often is forgotten in light of their many ethical and environmental disasters and mistakes. During its initial founding the country was on the right track ethically, creating the first medical center in Iran to serve its pipeline workers, and many other acts of humanitarianism in the region. BP was also chosen by Winston Churchill to supply the Royal Navy with much of their fuels and oil during the second World War. As the company expanded into the Forties Field of Scotland, to Alaska, Algiers and throughout the Middle East, its lapses in ethics, exacerbated by nationalization of oil reserves in Middle East nations, led to an ethical meltdown. Bad decisions became commonplace. The Alaskan oil field disasters led to a total of over $500M in fines, and the residual effects in the environment still aren't cleaned up. The company is most known for the massive oil spill in the Gulf of Mexico, where the $50M fine for violating the Clean Air Act was miniscule compared to the billions of dollars required to clean up the massive spill throughout the region. BP has a reputation for disregarding the needs and requirements of the shareholders while flaunting the rules they define in the Corporate Social Responsibility (CSR) initiatives as well.

SWOT Analysis

Strengths

Excellent project management control and the ability to bring complex engineering tasks in under budget and on time

Excellent cost controls over complex engineering, exploration and drilling operations in the world's most remote countries. This is seen in the discovery of the Forties Field and the successful prospecting in the Prudhoe Bay, Alaska area as well.

Excellent financial analysis and planning expertise to manage so many complex projects concurrently and still get the majority of exploration and refining developments done on time.

Weaknesses

From the very beginning, showed signs of being very engineering-centric without a focus on staying true to their stakeholder requirements.

Lost track of its ethical foundation decades previous to 2005 yet the accumulated series of bad decisions started to come out in that year. Their CSR initiatives began to look hollow and meaningless as ethical lapse after lapse occurred., the violation of the Clean Air Act in the Gulf of Mexico region of $50M was just the beginning of a very long and costly series of problems. August, 2006 saw the company encounter a 200,000 gallon spill and $40M in damages. Worse yet, the company also violated the Commodity Exchange Act and commit mail and wire fraud, admitting to price fixing and paying nearly $300M in damages and being indicated on 20 counts of illegal activity.