Several disasters, which resulted from a lack of internal controls and risk management strategy, have led BP to develop a negative reputation amongst consumers and government officials. The company needs to develop a way to get consumers to put the past behavior of BP behind them and to make consumers believe that the new core values BP has, along with its efforts towards rectifying the situation, are truthful and valuable. Situational Analysis
Marketing Objectives, Strategy, and Performance
Without actually defining a mission statement, BP has published a statement as to what the company stands for. BP states: “We care deeply about how we deliver energy to the world. Above everything, that starts with safety and excellence in our operations. This is fundamental to our success. Our approach is built on respect, being consistent, and having the courage to do the right thing. We believe success comes from the energy of our people. We have a determination to learn to do things better. We depend upon developing and deploying the best technology, and building long-lasting relationships. We are committed to making a real difference in providing the energy the world needs today, and in the changing world of tomorrow. We work as one team. We are BP” ("Our Values," 2012). One of BP’s main marketing objectives currently is the Gulf of Mexico restoration project. The company states that it is committed to making progress towards economic and environmental restoration efforts. Up to $1 billion has been provided to help fund restoration projects in the areas that were impacted by the spill ("Early Restoration Projects," 2012). BP as also set aside around $20 billion in an escrow fund to help business owners that have been affected by the disaster (Ferrell & Sawayda, 2012). The company also has been spending money towards awareness ads to inform customers of the situation and their plans to fix it. BP currently has a strategy plan set in order to move the company forward. The 10-Point Plan is divided into two sections: What You Can Expect and What You Can Measure. Under the first section, the company plans to have relentless focus on safety and managing risk, play to their strengths, be stronger and have more focus, be simpler and more standardized, and have more visibility and transparency to value. Under the second section, What You Can Measure, BP plans to have an active portfolio management system, create new upstream projects on-stream with unit operating cash margins that will double the 2011 average, to generate 50% more operating cash annually by the year 2014, to take half of their incremental operation cash to reinvest and then the other half to use for other purposes, and to have a strong balance sheet (“BP 4Q11 Results and 2012 Strategy Presentation,” 2011). When compared to its competitors in the industry, BP ranks 3rd in market share at 6.8%. The leader is Chevron Corporation, with 10.9% followed by ConocoPhillips at 7.3%. The performance of the entire oil drilling and gas extraction industry is declining slowly. Oil wells that have been discovered in the past are starting to dry up from heavy increases in demand. Output in the industry has been flat when compared to years in the past. The industry also does not have any new technology, which is also causing the decline. Organizational Resources
As of December 31, 2011, BP’s market capitalization is $135.2 billion. Sales and other operating revenue equals $375,517 million. Capital employed is $156,695 billion. BP’s replacement cost profit, which is how oil companies report profit, is $24,297 million for the year 2011 ("Key Facts and Figures," 2011). BP’s financials will take a hit in the future, as the company is still in litigation for the Gulf of Mexico spill in 2010. Human
BP has employed 83,400 employees as of December 31, 2011 while owning 21,800 retail locations ("Key Facts and...