British Petroleum: Transforming Its Strategy - Research Paper Example

British Petroleum: Transforming Its Strategy Introduction The origin of British Petroleum dates back to the early 20th century and the oil deposit discovery in Persia, currently known as Iran, which resulted in the establishment of the Anglo-Persian Oil Company in 1909. It is in 1914 that the British government took a large interest in the Anglo-Persian Company to such an extent that it was given a go ahead to supply oil for the Royal Navy during the First World War (Christiansen 2002). The company has since then emerged as one of the World’s top three oil corporations since its merger with Amoco in 1998. When judged by its market capitalization of $203 billion, earnings of $8.4 billion and Revenue of $148 billion in the 2000 fiscal report, it only ranked behind oil-majors such as ExxonMobil and the Shell Group. The company also ranked among the top three companies by oil discovered and gas reserves which amounted to over 15.2 billion barrels of oil (Adamson and Sorrell, 2007). The products of BP are on sale in about 100 nations across the globe and have a strong base on six continents. On an active scale, the company is active in 29 nations and has operation production in 23 countries. BP is also the largest oil and gas producer in the U.S. where it also ranks second in terms of gasoline. Global warming has been an issue of concern across the globe. This is what led to the establishment of the Kyoto protocol in 2005 to help mitigate environmental effects. The agreement was signed by all the countries across the continent with the exception of US. These are some of the factors that made BP take measures geared towards ensuring that the environments are not polluted by petroleum products. This is what resulted in the formation of “Heloise” strategy. The Purpose of this essay is to explore what BP’s “Helios” strategy and how it relates to the company’s mission and core values. The paper will also conduct a SWOT analysis to establish the opportunities, strengths, weaknesses, and threats of BP’s “Helios” initiative in the next three years. It will also examine how best BP can effectively communicate its “Helios” initiative to consumers. Since the initiative is meant to benefit the company and society, the essay will discuss the long term benefits of the strategy to the business and society at large. Finally, the paper will explore the objectives that would be set for this tactic and result measuring proposal for BP. BP’s “Helios” Strategy “Helios” is a sunflower-shaped mark made up of colors and interlocking Planes according to Knapp (2001). This brand was generally recommended by Landor in 1999. The “Helios” brand is an initiative of BP which is meant to communicate BP’s commitments to environmental leadership and its focus on alternative sources of energy. Knapp (2001) asserts that the Helios mark is a reflection of BP’s determination to produce products and services that respects natural environments and human rights. According to the management of the company, the mark is also a representation of the sun which is BP’s priority search for new sources of energy. The company projects that a part from the fact that Helios tells its consumers about the oil products, it also tells of solar energy and clean fuel that are environmental friendly which would make the world a better place in the future. This is in line with the Kyoto protocol signed in Geneva in 2005 compelling companies and nations to embrace the culture of using an alternative source of energy that is environmental friendly (Schmitt, 2007). For instance, research has shown that energy from gasoline, petroleum, coal and other sources of energy emits carbon to the environments. This then blocks the ozone layer leading to global warming. This has impacted negatively on the environment which has seen a change in weather patterns such as unpredictable rain patterns, heat, snow just to name a few. Christiansen (2002) reveals that BP has over the last years received a lot of praise and support for its proactive efforts on environmental issues. This is because the company has taken concrete measures aimed at curbing green gas emissions. This affirms its commitment to the implementation of Helios strategy. Helios strategy also means the commitment of the company to human rights. The company knows that human right is paramount, and no single individual should be at risk. Abidance by this commitment has been specially witnessed in Columbia in which the company has long been recognized to operate. Columbia is one country that is known for threats and safety risks due to the high numbers of guerrilla and paramilitaries that in most cases wage a war against oil corporations (Christiansen 2001). Christiansen notes that in October 1998, the Ejecrcito de liberacion Nacional (ELN) claimed responsibility for blowing up the pipeline of OCENSA located in Antioquia leaving many people dead and scores injured. Due to risks posed by guerillas to staff, the environment, and facilities, BP has considered security a core measure as incorporated in Helios initiative. This led to the company and its partners signing a formal contract with the Defense Ministry and National Police of Columbia. The agreement was meant to compel Columbia government to assign army brigades and police to protect their operations. This ensured that everyone is protected all the time. The initiative is now spread across all its points of operations. SWOT Analysis on BP’s Helios Strategy. Strengths The Helios strategy has a strength especially in guiding the company on its mission and vision. This is especially due to the fact that it speaks of the company’s history concerning oil production and its moves towards alternative sources of energy, such as solar energy, and clean fuels. Thus, reminds of the progress that the company has made and the changes that the company strives to achieve in its day-to-day operation (Alvarez and Iowa State University Art and Design, 2008). Weaknesses Research has shown that nothing can ever be perfect and as such do have some limitations. With regard to BP’s Helios strategy, it will likely to be faced by political hurdles associated with resistance to change. This is especially with regard to its implementation. The reason being there are some people within the company who would prefer to maintain the status quo and would see the new strategy as a threat. In this regard, they would make attempts to resist the change making its implementation had to the company (Adamson and Sorrell, 2007). Opportunities It is a matter of fact that the world is dynamic due to globalization and technological advancements. As such every company must take drastic steps aimed at keeping in pace with the world’s dynamism. In this regard, the company’s innovative initiative of Helios aimed at diversifying and incorporating the production of other energy source is a noble strategy. For instance, as the world tries to move away from carbon emitting fuels such as petroleum, gas and gasoline that the company depends on most, it is noble for the organization to consider venturing in solar energy and other alternative sources as proposed by the Helios initiative. This will enable the company to operate on a going concern irrespective of oil reserve depletion. Furthermore, many households are adopting the use of solar as an alternative source of energy. Thus, this will help boost companies revenue and profits (Adamson and Sorrell, 2007). Threats The major threat of the initiative is political interference. It will also likely to be faced by completion in the near future from other firms. Ways BP can use to Effectively Communicate its Helios strategy to Consumers. BP is one company that puts a lot of emphasis on communicating with the general public especially the consumers of its products (Christiansen 2002). The company ensures that all that which it considers vital to its consumers are communicated in the right manner and at the right time. One such issue is its Helios strategy. One such way by which this strategy can effectively be communicated to its consumers is through intensive advertisement campaign. This may be done through the electronic media, billboards and any other channel that the channel deem fit. This will enable all the consumers know of the new strategy for them to see how the initiative can be of immense benefit. Another way of achieving this is by establishing the company’s corporate website. The website should be able to cover extensively all the issues that the company considers core with regard to Helios initiative. These include its commitment to human rights, environmental issues among others. Benefits of Helios Initiative to the Society The strategy would be of immense benefit to the society. For instance, when the environment is populated by green gaseous emissions, it is the society that always suffers the brunt most. Therefore, since the initiative is meant to mitigate the emissions, the society will benefit a great deal. Furthermore, since the initiative is meant to create alternative source of energy, like solar energy, the society will have a variety of energy sources to choose. This will indeed be of great benefit to society. The initiative will also be of benefit to the society as it ensures that human beings are accorded safety at all the time through the company’s corporate social responsibility introduced by the initiative (Schmitt, 2007). Benefits to BP The initiative puts BP as one of the companies that consider corporate social responsibility to the stakeholders (Adamson and Sorrell, 2007). For instance, the fact that the initiative is aimed at reducing negative environmental impacts, this will give the company good corporate image internationally. This would in turn enable the company get support and sponsorship from international community. Furthermore, it will enable the stakeholders see the company to care for their rights which will help draw many consumers, and other stakeholders to the company. The result will be higher profits and revenue. Following BP’s Helios power marketing tactics and that used in the street; I would propose the following objectives: a. Should be able to reach sevral individuals at the lowest possible cost b. Should aim at educative the public of the Helios strategy c. Should focus on luring as many consumers and other stakeholders to the company With regard to measuring results attained by BP, I would propose that the company consider number of ways. This includes financial measures such as profit margins realized, unit volumes and sales revenue. This is then compared with past performance. Other methods that may be used include identification of new customers who have joined the company. These customers are then asked questions on how they have found company products and services. From the response received, the company will be able to determine their results effectively (Christiansen, 2002). In conclusion, unlike situations where reference top products are eliminated from company symbol, BP’s new identity is a case that reflects the importance of cross-cultural invests in communication of visions and values using their brand and corporate symbol. The Helios strategy is that which symbolizes the new organization and is a reflection of the company’s values to which it aspires: environmental leadership, performance, innovation and progressive ideas (Alvarez and Iowa State University Art and Design, 2008). References Adamson, A.P. & Sorrell, S.R. (2007). Brand Simple: How the Best Brands Keep it simple and succeed. New York: Palgrave Macmillan. Alvarez, J. M. R., & Iowa State University. Art and Design (2001). Effectiveness of values communication through cross-cultural corporation….London: ProQuest. Christiansen, A. C. (2002). Beyond Petroleum: Can BP deliver? Fridtjof Nonsense Institutt Report. June. Knapp, P.M. (2001). Designing Corporate Identity: Graphic Design as a Business Strategy. New York: Rockport Publishers. Schmitt, B. (2007). Big Think Strategy: how to leverage bold ideas and leave small thinking behind. New York: Harvard Business School Press. Read More