Forward Strategy for BP Plc - Case Study Example

According to Porter, companies can stick to three best strategies—cost leadership, market segmentation, and differentiation. Generic strategies are highly commended because they identify a certain area that a company can focus on instead of trying to be “everything.” (Thomson 2004). Looking at BP’s strategic statement in light of Porter’s generic strategies, it can be noted that BP is following a differentiation strategy. In general, it can be seen that energy products are marketed as “high-performance fuel with outstanding engine cleaning power which burns more smoothly and completely” (BP Global 2006).

Instead of just being one of the typical players in the market, BP has differentiated its products by offering “cleaner fuels” and alternative energy sources. This is directly in line with the company’s name which stands for “Beyond Petroleum” which communicates the oil manufacturer’s concern for the environment (BP 2006). By differentiating itself against its competitors, BP gains a strong foothold in its target market.  SWOT AnalysisSWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is one of the most widely utilized business models in assessing the current position of a business entity.

In order to prose a strategy to BP, this paper recognizes that the company’s strengths should be matched with its opportunities. The appropriate strategy should also minimize threats and reduce weaknesses.  Strengths: BP’s main strengths are its size, scope, and brand. As one of the largest players in the industry, the company exerts a significant influence on the other business organizations within its value chain. BP also enjoys being able to offer the global market with its products through its wide network of distribution channels.

BP has established stronger brand equity relative to its other rivals (BP 2006). Weaknesses: As with any other business organization in the sector, BP lacks the capacity to directly minimizing the harm that it can bring to the society where it operates. The company has been severely criticized because of human rights abuses, environmental and safety concerns which have tarnished the company’s reputation (BP Plc 2006).