BP and the Gulf of Mexico Oil Spill SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of BP and the Gulf of Mexico Oil Spill
On the night of April 20, 2010, a series of explosions rocked the Deepwater Horizon oil rig in the Gulf of Mexico. Gas in the Macondo well had surged upward unexpectedly, causing a mix of drilling mud and seawater to spew uncontrollably into the air much like a volcanic eruption. Eleven crew members died during the explosion. The nation mourned their loss, and people watched as BP struggled to contain the environmental damage. Millions of barrels of oil spilled into the Gulf of Mexico in the weeks that followed. The federal government relied on BP to manage the accident's aftermath, in part because government officials lacked the expertise required to stop the spill. Meanwhile, BP downplayed their responsibility for the failure. As the firm failed repeatedly to stop the spill, the public became angry. This industrial disaster became the largest offshore oil spill in U.S. history. Drawing on the Presidential Commission's investigation, as well as numerous journalistic accounts, the case provides a detailed description of the events leading up to this catastrophic accident. Readers examine the key decisions that BP and its partners made as they drilled this well. They discover the alternative choices that could have been made and learn about the disagreements that took place (as well as those that failed to surface). Moreover, the case provides an opportunity to examine how BP's history and organizational culture shaped the way those decisions were made. The case describes how Tony Hayward and his predecessor, John Browne, led the firm and shaped the culture during the past two decades. In addition, the case explains how the regulatory environment and political forces shaped decision-making in the oil industry. The case concludes by examining the aftermath of the accident, particularly the public relations miscues that BP experienced as it tried to manage the crisis.
Swot Analysis of "BP and the Gulf of Mexico Oil Spill" written by Michael A. Roberto includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bp Spill facing as an external strategic factors. Some of the topics covered in BP and the Gulf of Mexico Oil Spill case study are - Strategic Management Strategies, Decision making, International business, Leadership, Organizational culture, Personnel policies, Risk management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the BP and the Gulf of Mexico Oil Spill casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization,
increasing government debt because of Covid-19 spendings, wage bills are increasing, etc
Introduction to SWOT Analysis of BP and the Gulf of Mexico Oil Spill
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in BP and the Gulf of Mexico Oil Spill case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bp Spill, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bp Spill 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 BP and the Gulf of Mexico Oil Spill can be done for the following purposes –
1. Strategic planning using facts provided in BP and the Gulf of Mexico Oil Spill case study
2. Improving business portfolio management of Bp Spill
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bp Spill
Strengths BP and the Gulf of Mexico Oil Spill | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bp Spill in BP and the Gulf of Mexico Oil Spill Harvard Business Review case study are -
Strong track record of project management
– Bp Spill is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Bp Spill is one of the leading recruiters in the industry. Managers in the BP and the Gulf of Mexico Oil Spill are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Bp Spill is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Michael A. Roberto can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Innovation driven organization
– Bp Spill is one of the most innovative firm in sector. Manager in BP and the Gulf of Mexico Oil Spill Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Leadership & Managing People industry
– BP and the Gulf of Mexico Oil Spill firm has clearly differentiated products in the market place. This has enabled Bp Spill to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Bp Spill to invest into research and development (R&D) and innovation.
Organizational Resilience of Bp Spill
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bp Spill does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Bp Spill digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bp Spill 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.
High brand equity
– Bp Spill has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bp Spill to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Bp Spill has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in BP and the Gulf of Mexico Oil Spill HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Bp Spill 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.
Training and development
– Bp Spill has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in BP and the Gulf of Mexico Oil Spill 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.
Low bargaining power of suppliers
– Suppliers of Bp Spill in the sector have low bargaining power. BP and the Gulf of Mexico Oil Spill has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bp Spill to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses BP and the Gulf of Mexico Oil Spill | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BP and the Gulf of Mexico Oil Spill are -
Low market penetration in new markets
– Outside its home market of Bp Spill, firm in the HBR case study BP and the Gulf of Mexico Oil Spill needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Bp Spill 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 - BP and the Gulf of Mexico Oil Spill should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study BP and the Gulf of Mexico Oil Spill, it seems that the employees of Bp Spill 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.
Interest costs
– Compare to the competition, Bp Spill has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High cash cycle compare to competitors
Bp Spill has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study BP and the Gulf of Mexico Oil Spill, is just above the industry average. Bp Spill 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Bp Spill needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to strategic competitive environment developments
– As BP and the Gulf of Mexico Oil Spill HBR case study mentions - Bp Spill takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Aligning sales with marketing
– It come across in the case study BP and the Gulf of Mexico Oil Spill that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case BP and the Gulf of Mexico Oil Spill can leverage the sales team experience to cultivate customer relationships as Bp Spill is planning to shift buying processes online.
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 Bp Spill supply chain. Even after few cautionary changes mentioned in the HBR case study - BP and the Gulf of Mexico Oil Spill, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bp Spill vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Bp Spill is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Bp Spill needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bp Spill to focus more on services rather than just following the product oriented approach.
Opportunities BP and the Gulf of Mexico Oil Spill | 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 BP and the Gulf of Mexico Oil Spill are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bp Spill 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 Bp Spill to hire the very best people irrespective of their geographical location.
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 Bp Spill in the consumer business. Now Bp Spill can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Bp Spill can develop new processes and procedures in Leadership & Managing People 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.
Using analytics as competitive advantage
– Bp Spill has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study BP and the Gulf of Mexico Oil Spill - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bp Spill to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Bp Spill can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Creating value in data economy
– The success of analytics program of Bp Spill has opened avenues for new revenue streams for the organization in the industry. This can help Bp Spill to build a more holistic ecosystem as suggested in the BP and the Gulf of Mexico Oil Spill case study. Bp Spill can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bp Spill can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Learning at scale
– Online learning technologies has now opened space for Bp Spill to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Better consumer reach
– The expansion of the 5G network will help Bp Spill to increase its market reach. Bp Spill 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.
Manufacturing automation
– Bp Spill can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bp Spill is facing challenges because of the dominance of functional experts in the organization. BP and the Gulf of Mexico Oil Spill 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.
Loyalty marketing
– Bp Spill has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Bp Spill can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Bp Spill can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Threats BP and the Gulf of Mexico Oil Spill External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study BP and the Gulf of Mexico Oil Spill are -
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.
Environmental challenges
– Bp Spill 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. Bp Spill can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Technology acceleration in Forth Industrial Revolution
– Bp Spill has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Bp Spill needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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 Bp Spill.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Bp Spill needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Regulatory challenges
– Bp Spill 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 Leadership & Managing People industry regulations.
Increasing wage structure of Bp Spill
– 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 Bp Spill.
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 Bp Spill in the Leadership & Managing People sector and impact the bottomline of the organization.
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. Bp Spill 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bp Spill can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study BP and the Gulf of Mexico Oil Spill .
Stagnating economy with rate increase
– Bp Spill 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.
Shortening product life cycle
– it is one of the major threat that Bp Spill is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study BP and the Gulf of Mexico Oil Spill, Bp Spill may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Weighted SWOT Analysis of BP and the Gulf of Mexico Oil Spill 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 BP and the Gulf of Mexico Oil Spill 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 BP and the Gulf of Mexico Oil Spill 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 BP and the Gulf of Mexico Oil Spill 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 BP and the Gulf of Mexico Oil Spill 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 Bp Spill needs to make to build a sustainable competitive advantage.
