BP SWOT Analysis

This SWOT analysis examines British Petroleum (BP), one of the world's largest energy companies, which is known for its petrochemical business around the world. Headquartered in London, England, the company participates in the London Stock Exchange and the New York Stock Exchange as well as is listed on the FTSE 100 Index. The company has experienced challenges in recent years, including costly and brand-breaking accidents as well as pressure to address global climate change targets and focus on corporate social responsibility. The company's strengths and weaknesses are assessed in order to make recommendations about how it can take advantage of opportunities while addressing any perceived threats that may appear in the short or long-term for this company.

  • BP has a number of subsidiaries and retail brands that include Amoco; ARCO; BP Express, BP Connect; BP Travel Centre; AM/PM; Burmah Castrol, etc., which provide the company with a diversified revenue portfolio rather than simply relying on its energy business.
  • BP Amoco has a strong brand loyalty to its oil business.
  • The 'Beyond Petroleum' slogan has served BP well so that it is being recognised for its participation in other industries and markets.
  • BP has worked extensively to rebuild its image in the wake of the recent accidents and mishandling by executives, including a greater focus on corporate social responsibility as well as transparency and more thoughtful communication.
  • The company has faced many oil spills and disasters that led to fatalities and significant environmental damage around the world.
  • Company executives were dishonest and poorly handled these disasters, which further tarnished their image and led to massive penalties, fines, and costs to assist those areas that were damaged.
  • The ongoing focus on climate change and the reduction in the use of fossil fuels has put more pressure on the company to migrate into providing clean energy options.
  • BP has closed many oil wells, leading to many layoffs, which have occurred in poor economic cycles, furthering the brand image that the company is uncaring and greedy.
  • The competition has been positioned as more responsible and attractive due to these many missteps, putting BP in the position of having to play catch-up to the market leaders in their industries.
  • The company has the potential of becoming a market leader in many alternative fuel and energy markets if it can invest in research and reposition its strategy. These market opportunities include wind, solar, and hydrogen.
  • There are opportunities for BP to expand into new geographic territories with its alternative fuel and energy opportunities.
  • BP has the opportunity to partner with certain countries in developing solutions for infrastructure issues in order to move into the use of clean energy options, positioning the BP brand around innovation and environmental responsibility.
  • BP can focus on further developing many of its subsidiaries that are outside of its petrochemical focus to enhance revenue streams in these areas.
  • Environmental issues may continue to be a threat if the company does not formalize its corporate social responsibility and put it at the forefront of its strategy, including revising workplace safety issues in order to reduce refinery explosions, oil leaks and spills, pipeline corrosion and other environmental hazards.
  • The company will continue to face lawsuits and penalties if it does not address these environmental issues and poor safety practices, which will significantly impact the company's sustainability.
  • It faces increased competition from other companies like Shell and Chevron, which are dealing with these environmental issues better than BP and have enhanced their brand reputation.
  • The company also faces competition from the emergence of specialised alternative energy companies that are offering the technology and affordability to encourage greater migration away from the reliance on fossil fuels, which could decrease BP's customer base.
  • BP's tarnished brand reputation continues to be a threat to its future growth and profitability potential due to how it handled the last major disaster associated with the company.
  • The global, regional, and local regulatory environments continue to be a threat as changes in regulations impact how BP can do business.
  • Economic pressure is a threat, especially in terms of volatile oil prices around the world, furthering the need to focus on the migration to alternative fuel for its energy solutions.