British Petroleum (A1): Organizing for Performance at BPX SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of British Petroleum (A1): Organizing for Performance at BPX
In 1992-93, British Petroleum plc, Britain's fourth-largest of the great international integrated oil companies, faced a major crisis. The company was experiencing its first losses in its eighty-year history, while morale was battered by downsizing and organizational upheaval.
Swot Analysis of "British Petroleum (A1): Organizing for Performance at BPX" written by Joel Podolny, John Roberts includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Petroleum Bpx facing as an external strategic factors. Some of the topics covered in British Petroleum (A1): Organizing for Performance at BPX case study are - Strategic Management Strategies, Competition, Downsizing, International business and Strategy & Execution.
Some of the macro environment factors that can be used to understand the British Petroleum (A1): Organizing for Performance at BPX casestudy better are - – there is backlash against globalization, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google,
increasing energy prices, wage bills are increasing, etc
Introduction to SWOT Analysis of British Petroleum (A1): Organizing for Performance at BPX
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in British Petroleum (A1): Organizing for Performance at BPX case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Petroleum Bpx, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Petroleum Bpx operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of British Petroleum (A1): Organizing for Performance at BPX can be done for the following purposes –
1. Strategic planning using facts provided in British Petroleum (A1): Organizing for Performance at BPX case study
2. Improving business portfolio management of Petroleum Bpx
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Petroleum Bpx
Strengths British Petroleum (A1): Organizing for Performance at BPX | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Petroleum Bpx in British Petroleum (A1): Organizing for Performance at BPX Harvard Business Review case study are -
Diverse revenue streams
– Petroleum Bpx is present in almost all the verticals within the industry. This has provided firm in British Petroleum (A1): Organizing for Performance at BPX case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Operational resilience
– The operational resilience strategy in the British Petroleum (A1): Organizing for Performance at BPX Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Training and development
– Petroleum Bpx has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in British Petroleum (A1): Organizing for Performance at BPX Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the Petroleum Bpx are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Successful track record of launching new products
– Petroleum Bpx has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Petroleum Bpx has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– Petroleum Bpx has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Petroleum Bpx to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Strategy & Execution field
– Petroleum Bpx is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Petroleum Bpx in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Petroleum Bpx
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Petroleum Bpx does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Petroleum Bpx is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Petroleum Bpx is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in British Petroleum (A1): Organizing for Performance at BPX Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Petroleum Bpx in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Petroleum Bpx is one of the most innovative firm in sector. Manager in British Petroleum (A1): Organizing for Performance at BPX Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Petroleum Bpx digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Petroleum Bpx has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses British Petroleum (A1): Organizing for Performance at BPX | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of British Petroleum (A1): Organizing for Performance at BPX are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Petroleum Bpx is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study British Petroleum (A1): Organizing for Performance at BPX can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Petroleum Bpx has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - British Petroleum (A1): Organizing for Performance at BPX should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Petroleum Bpx is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Petroleum Bpx needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Petroleum Bpx to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Petroleum Bpx has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Petroleum Bpx even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study British Petroleum (A1): Organizing for Performance at BPX, it seems that the employees of Petroleum Bpx don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
No frontier risks strategy
– After analyzing the HBR case study British Petroleum (A1): Organizing for Performance at BPX, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Low market penetration in new markets
– Outside its home market of Petroleum Bpx, firm in the HBR case study British Petroleum (A1): Organizing for Performance at BPX needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study British Petroleum (A1): Organizing for Performance at BPX, is just above the industry average. Petroleum Bpx needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Petroleum Bpx supply chain. Even after few cautionary changes mentioned in the HBR case study - British Petroleum (A1): Organizing for Performance at BPX, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Petroleum Bpx vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study British Petroleum (A1): Organizing for Performance at BPX, in the dynamic environment Petroleum Bpx has struggled to respond to the nimble upstart competition. Petroleum Bpx has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study British Petroleum (A1): Organizing for Performance at BPX has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Petroleum Bpx 's lucrative customers.
Opportunities British Petroleum (A1): Organizing for Performance at BPX | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study British Petroleum (A1): Organizing for Performance at BPX are -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Petroleum Bpx to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Petroleum Bpx is facing challenges because of the dominance of functional experts in the organization. British Petroleum (A1): Organizing for Performance at BPX case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Petroleum Bpx can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Petroleum Bpx can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Petroleum Bpx can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Petroleum Bpx can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Petroleum Bpx to increase its market reach. Petroleum Bpx will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Petroleum Bpx to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Petroleum Bpx to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Petroleum Bpx can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Petroleum Bpx can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, British Petroleum (A1): Organizing for Performance at BPX, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Petroleum Bpx has opened avenues for new revenue streams for the organization in the industry. This can help Petroleum Bpx to build a more holistic ecosystem as suggested in the British Petroleum (A1): Organizing for Performance at BPX case study. Petroleum Bpx can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Petroleum Bpx in the consumer business. Now Petroleum Bpx can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Petroleum Bpx can use these opportunities to build new business models that can help the communities that Petroleum Bpx operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats British Petroleum (A1): Organizing for Performance at BPX External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study British Petroleum (A1): Organizing for Performance at BPX are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Petroleum Bpx in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Petroleum Bpx high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Petroleum Bpx
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Petroleum Bpx.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on Petroleum Bpx demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Petroleum Bpx can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Petroleum Bpx needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Stagnating economy with rate increase
– Petroleum Bpx can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study British Petroleum (A1): Organizing for Performance at BPX, Petroleum Bpx may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Environmental challenges
– Petroleum Bpx needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Petroleum Bpx can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Petroleum Bpx.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Petroleum Bpx will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Petroleum Bpx in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of British Petroleum (A1): Organizing for Performance at BPX Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study British Petroleum (A1): Organizing for Performance at BPX needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study British Petroleum (A1): Organizing for Performance at BPX is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study British Petroleum (A1): Organizing for Performance at BPX is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of British Petroleum (A1): Organizing for Performance at BPX is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Petroleum Bpx needs to make to build a sustainable competitive advantage.
