The executive brief will cover BP’s strategic business unit alternative energy and its three main products: solar, wind and biofuels. The critical evaluation showed the external and internal influences of BP’s strategy in this business field as well as the strengths and weaknesses. There is a higher awareness towards the climate change because of environmental disasters. The people are looking for sustainability and energy saving products. Today, governments have a high influence on alternative energies. Spending subsidies and cutting them of in economic and financial crises influences the company’s strategy.
BP Solar is one of the world leading companies in selling solar modules. Focusing on end-consumers and project-work, the company tries to penetrate its 100 country large market with high quality and inexpensive products.
BP Wind is only operating in the US. Using joint ventures and own wind parks, the company tries to become of the leading wind companies in the US. As the result, BP Wind is highly addicted to the economic and political development of the country. Higher investments and entering new markets outside the US can help to lower the risks.
BP Biofuels is highly connected to the core business of BP: oil and gas. The company is investing more than $2 billion in research and development in the last years to create efficiency sugarcanes. The plant is perfect for the use of biofuels and shall reduce the amount of fossil fuels in the transport industry. But the outcome is quite unsure and the focus is only in two main markets: Brazil and US. An expansion into the Asian market can be important to secure new market in which the demand for transportation will increase in the next decades.
Overall, the alternative energy is just a small part in the BP Company but it will become more important in the future. Promotion campaigns can help to show the company’s commitment in this area and it maybe helps to reclaim trust.
Table of Contents
1. Introduction
2. Analysis and critical evaluation of bp's strategic position
2.1. External analysis
2.2. Internal analysis
2.3. Critical evaluation
3. Analysis of the bp's strategic direction
4. Critical evaluation of bp's strategy
4.1. Suitability
4.2. Acceptability
4.3. Feasibility
4.4. Sustainability
5. Conclusions
6. Recommendation
Research Objectives and Key Topics
The primary objective of this assignment is to conduct a critical evaluation of BP’s strategic business unit (SBU) for alternative energy, specifically focusing on its solar, wind, and biofuel segments. The paper examines the company's internal capabilities and external strategic environment to assess the viability of its renewable energy transition.
- Strategic positioning and external market influences on renewable energy.
- Analysis of BP's strategic direction across solar, wind, and biofuel portfolios.
- Evaluation of strategic suitability, acceptability, and feasibility within the alternative energy market.
- The impact of global economic crises and government subsidies on renewable strategies.
- Corporate sustainability and the future role of biofuels in the transport industry.
Excerpt from the Book
2.1. External Analysis
The external analysis shows which factors influence BP and other energy companies in the field of renewable energies. The oil industry is in a mature stage and will lose market shares in the future. The competition in the gas market is rising because of new entrants like states from the former Soviet Union. (BP p.l.c., 2011) In contrast, the solar energy which stands for all renewable energies here is in a development stage. The atomistic market will highly grow in the future. (BP p.l.c., 2011)
Reasons for this development are the societal change towards sustainability and a higher awareness towards the climate change and environmental disasters. The investments for alternative energies are rising since years and so the efficiency of the generators for example becomes better nowadays. (BP p.l.c., 2011) But the investments are in danger because of political and economic instability and a high population growth in some parts of the world. (PRB, 2008) This can support critics who say that renewable energy can influence the security of energy supply. (BP p.l.c., 2011)
Summary of Chapters
1. Introduction: This chapter provides an overview of BP's history, its global reach, and the organizational structure divided into its three main strategic business units.
2. Analysis and critical evaluation of bp's strategic position: This section investigates the external market forces and internal capabilities that shape BP's current standing in the renewable energy sector.
3. Analysis of the bp's strategic direction: This chapter details the specific approaches taken by BP within the solar, wind, and biofuel sectors to maintain competitiveness and growth.
4. Critical evaluation of bp's strategy: This part assesses the company's performance against criteria of suitability, acceptability, feasibility, and sustainability.
5. Conclusions: This section synthesizes the analysis to determine that while alternative energy is currently a secondary focus, it is essential for BP's future transition.
6. Recommendation: This chapter suggests actionable improvements, such as diversifying the wind market and enhancing promotional efforts to reclaim stakeholder trust.
Keywords
Renewable Energy, BP, Solar Energy, Wind Energy, Biofuels, Strategic Management, Sustainability, Corporate Strategy, Market Penetration, Joint Ventures, Energy Transition, R&D Investment, Environmental Policy, Competitive Advantage, Stakeholder Trust.
Frequently Asked Questions
What is the primary focus of this executive brief?
The brief evaluates BP’s strategic business unit for alternative energy, focusing on its three key products: solar power, wind energy, and biofuels.
What are the central themes discussed in the paper?
The paper covers market analysis, competitive positioning, strategic implementation, and the challenges BP faces regarding economic instability and shifts in government subsidies.
What is the main objective of BP's alternative energy strategy?
The primary goal is to establish a transition path away from traditional oil and gas reliance by developing sustainable, efficient energy solutions for a greener future.
Which scientific framework is used for the analysis?
The author employs standard strategic management tools including PESTEL analysis, the VRIN model, BCG Matrix, and the Ansoff Matrix to evaluate BP's business position.
What does the main body of the work address?
The main body examines external environmental factors, internal resource capabilities, and a critical evaluation of whether BP’s current strategies are suitable, acceptable, and feasible.
How would you characterize the core keywords of this study?
The study is characterized by terms such as strategic management, renewable energy, energy transition, and competitive market positioning.
Why is BP Wind considered the weakest part of the alternative energy SBU?
BP Wind is limited to the US market, making it highly susceptible to political and economic shifts within that specific country, compared to the more globally diverse solar division.
What recommendation does the author provide regarding biofuels?
The author recommends that BP continue its focus on sugarcane-based biofuels but emphasizes the need to avoid using land that is required for food crops to maintain social sustainability.
- Quote paper
- André Schröder (Author), 2011, Evaluating BP´s Renewable Energy Strategy, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/194717
