International Business Management Assignment Sample

Understanding BP's Global Operations, Strategies, and Recommendations for Market Entry

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Introduction Of International Business Management Assignment

The report is made to develop an understanding about the International Business Management considering the British Petroleum or BP which is top integrated oil and gas businesses in the world. The Anglo-Persian Oil Company, under which British Petroleum was first established in 1909, is still in operation today. The corporation employs about 70,000 people and has operations in more than 70 nations. BP's portfolio of companies is wide and includes petrochemicals, downstream refining and marketing, and upstream exploration and production. The company's upstream activities include oil and gas exploration, drilling, and production, while its downstream activities cover petroleum product refining, marketing, and distribution. British Petroleum is firmly committed to sustainability and has established challenging goals to lessen its carbon footprint.

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The company has set a goal to cut the carbon intensity of its products by 50% by 2050 to achieve its goal of becoming a net-zero corporations by that time. British Petroleum has established goals to improve the proportion of women and underrepresented groups in leadership roles as part of its commitment to fostering diversity and inclusion in the workplace. BP has invested in renewable energy sources like wind, solar, and bio fuels in addition to its core oil and gas businesses (Lazishvili, 2016). With a capacity of more than 2.2 GW, the business has a large presence in the US wind industry as part of its alternative energy portfolio.

Energy giant BP

Figure 1 Energy giant BP

(Source: Economic Times, 2023)

The report highlights the international business operation of the corporation and its reference to the company’s strategy. The report also includes concepts and frameworks to evaluate and appraise information business practices. Further, the company is recommended to enter a new market with supporting evidence and reasons. The report is therefore made to achieve the objectives for the learning outcomes with the effective research.

How international businesses operate within their strategic context

As British Petroleum (BP) operates in more than 70 countries worldwide, international businesses play a critical part in the company's strategic environment (Chaplinsky, et.al 2017). International enterprises are essential to the performance of each of BP's varied portfolio of businesses, which includes upstream exploration and production, downstream refining, marketing and petrochemicals which are explained in detail below.

Upstream Exploration and Production: Exploration and extraction of oil and gas from the earth are the main goals of BP's upstream exploration and production division. The company has operations in many nations, including the US, UK, Russia, and Angola, among others. Foreign companies are essential to BP's upstream o­­­­­­­perations because they give the corporation access to fresh deposits, cutting-edge technologies, and regional knowledge. For example, BP has access to major oil and gas deposits in Russia and Brazil because of its relationships with Rosneft and Petrobras, respectively. Through these alliances, BP is also able to take advantage of local knowledge and skills to successfully negotiate the challenging political and regulatory situations in these nations (Griffin and Pustay, 2015).

Downstream Refining and Marketing: The downstream refining and marketing division of BP is responsible for turning crude oil into refined goods like gasoline, diesel and aviation fuel and selling those goods to consumers all over the world. This company has operations in many nations, including the UK, the US, Australia and Germany, among others. Foreign companies are essential to BP's downstream operations because they give the corporation access to new supply chains, markets and customers. For example, BP acquired Grupo Salinas' Mexican retail network in 2020, giving the business a large retail footprint in one of the world's economies with the greatest rate of growth. BP acquired the division of Pertamina, Indonesia's state-owned oil corporation, in 2018, giving the company access to a developing market and fresh consumers.

Petrochemicals: The primary goal of BP's petrochemicals division is to produce several chemicals, such as ethylene, propylene, and acetyls, which are utilized in a range of sectors, such as packaging, textiles and the automobile industry (Levy, 2019). This company has operations in many nations, including the US, the UK, and China, among others. Foreign companies are essential to BP's petrochemicals sector since they give it access to brand-new markets, clients, and technological advancements. For example, BP will have access to one of the largest and fastest-growing chemical markets in the world thanks to its joint venture with China's Zhejiang Petroleum and Chemical Corporation (ZPCC) to establish a new petrochemicals complex in eastern China.

BP has made investments in alternative energy sources like wind, solar, and biofuels in addition to its traditional industries. Foreign companies are essential to these investments because they give the organization access to cutting-edge supply chains, markets, and technologies. For example, BP gained access to a fast-expanding market for renewable energy in 2017 when it bought a 43% interest in Lightsource BP, a world leader in solar power production. 2020 saw the launch of BP's joint venture with giant Energia Renovável, a producer of ethanol in Brazil, giving the corporation access to the expanding market for low-carbon bio fuels (Arora and Lodhia, 2017).

Therefore, international businesses are crucial to British Petroleum's strategic context because they give the corporation access to new markets, clients and technologies as well as the ability to manage the challenging political and regulatory landscapes in other nations. International companies will be significantly more crucial to BP's capacity to fulfill its sustainability objectives as the corporation pursues its aim of becoming a net-zero company by 2050.

Research concepts and frameworks to evaluate and appraise international business practice

When evaluating and appraising the international business practices of British Petroleum (BP), several concepts and frameworks can be used (Amernic and Craig, 2017). Here are some of the key ones:

  • Corporate Social Responsibility: Corporate Social Responsibility (CSR) is the term for a company's duties to operate responsibly, promote economic growth and enhance the lives of its employees, their families, the local community and society at large. Examining BP's efforts to lessen its carbon impact, its social responsibility programs in local communities, its governance procedures, and the transparency of its operations would be part of evaluating the company's worldwide business practices through this lens.
  • Political Risk Analysis: Political risk analysis assesses the potential of political unrest as well as how government regulations may affect business operations. Using this lens, it would be possible to analyze the stability of the political climate in the nations where BP conducts business, the legal and regulatory environment, and the degree of government involvement in the sector (Abdelrehim, et.al 2015). Additionally, it would take into account how the business manages political risks and cultivates ties with important stakeholders.
  • Resource Dependence Theory: According to this notion, a company's success is dependent on its capacity to secure and maintain key resources. Using this perspective, it would be possible to assess BP's global business practices by looking at its supply chain, the accessibility of essential resources, and its risk management plans for volatile or scarce resource situations. Additionally, it would take into account how the firm's business strategy and competitive edge are reliant on having access to resources and being able to control environmental hazards.
  • Institutional Theory: According to institutional theory, businesses function within larger institutional frameworks, such as cultural, social, and legal standards. Examining BP's ability to adapt to various institutional frameworks in various nations and regions would be part of evaluating its global business practices via this perspective (Nitsenko, et.al 2016). It would also take into account how the business manages the trade-offs between adhering to institutional norms and pursuing its strategic goals. It would also take into account how the business responds to changes in those environments over time.
  • Stakeholder Theory: According to this concept, businesses must take into account the interests of all parties, including clients, staff members, shareholders, and local communities. Examining how BP balances the interests of many stakeholders in its global operations would be part of evaluating the company's international business practices via this perspective. Also, it would look at how the business handles stakeholder conflicts of interest and communications with them (Freeman, 2015).
  • Porter's Five Forces Framework: This framework, known as Porter's Five Forces, is frequently used to examine the competitive dynamics of an industry. Examining the competitive forces that the company encounters in various nations and regions, such as the threat of new entrants, the bargaining power of suppliers and buyers, the threat of substitutes, and the level of rivalry among competitors, is necessary to evaluate BP's international business practices using this framework. Also, it would take into account how the firm's competitive advantage and strategic positioning vary in other markets.
  • Resource-Based View: According to this concept, a company's distinctive resources and abilities are crucial factors in determining its success in the market. Using this perspective, it would be possible to evaluate BP's worldwide business practices by looking at how it makes use of its resources and competencies to compete successfully in various markets (Bishop, et.al 2017). It would also take into account how the business invests in technological advancement and innovation, as well as how it manages its intellectual property and other intangible assets.

Therefore, evaluating and appraising the international business practices of British Petroleum requires a holistic approach that considers various frameworks and concepts. The unique research issue, the data's accessibility, and the analysis's goals that influence the framework choice. Researchers can acquire a thorough grasp of the strategic backdrop of the company, its competitive stance, and its influence on stakeholders and the environment by looking at BP's operations through a variety of lenses.

The organization's current international strategy with recommendation about a new market to enter

With operations in more than 70 nations, British Petroleum (BP) is one of the biggest oil firms in the world. With such a diversified portfolio of companies and investments in low-carbon energy, the company's current international strategy is to deliver sustainable and profitable growth (Dudley, 2018).

Four major pillars serve as the basis of BP's strategy

  • Resilient Hydrocarbons: By streamlining its operations, cutting expenses, and enhancing efficiency, BP seeks to get the most value possible from its hydrocarbon holdings. This entails making investments in new manufacturing, extending the useful lives of current assets, and keeping a laser-like focus on operational excellence and safety.
  • Integrated Energy: BP wants to offer integrated energy solutions to consumers by fusing fossil fuels, renewable energy sources, and transportation technologies. This entails making investments in cutting-edge low-carbon technology and enterprise frameworks that support the company's current hydrocarbon operations (Tsiga, al 2017).
  • Low Carbon Energy: By investing in renewable energy and other low-carbon technologies, BP hopes to take the lead in the transition to a low-carbon future. This involves a major portfolio shift for the company in favor of renewables and other low-carbon enterprises.
  • Efficient Operations: Through enhancing efficiency, cutting costs and raising productivity, BP seeks to deliver operational excellence across its portfolio of businesses. Improve performance, this entails streamlining procedures and systems across the entire organization.

BP has created a global network of companies, joint ventures and partnerships around the world to carry out its international strategy. Three regions to make the company's international operations:

Americas: Upstream production, refining, and marketing, as well as low-carbon developments in the US, Canada, and Brazil, are all part of BP's operations in the Americas (Hamilton and Webster, 2018). The company's goal in the area is to invest in and develop innovative low-carbon technologies and enterprises while maximizing the value of its current hydrocarbon holdings.

 Regions

Figure 2 Regions

(Source: AMERICAN GUILD OF ORGANISTS, 2023)

Europe and Asia: Upstream production, refining, marketing, and low-carbon initiatives in the UK, Germany, Russia, China, and India are just a few of BP's businesses in Europe and Asia. The company's regional priorities are growing its low-carbon business and utilizing digital technology to boost productivity and efficiency.

Africa and the Middle East: BP's activities in these regions include upstream production, refining and marketing, and low-carbon investments in nations including Egypt, Oman, and the United Arab Emirates (Kumar and Kumar, 2019). The company's regional priorities are optimizing the value of its current hydrocarbon assets and looking into potential new growth areas in renewable energy and other low-carbon technology.

To improve its global capabilities, BP has also formed several joint ventures and collaborations with other businesses. For example, the business has collaborated with some technology firms to create innovative low-carbon solutions, such as biofuels and carbon capture, uses and storage (CCUS). BP has also partnered with other energy firms to build new energy infrastructure and investigate fresh chances for expansion in developing regions.

Therefore, BP's present global strategy is geared at achieving sustainable and profitable growth through a well-balanced portfolio of companies and low-carbon energy investments. Resilient hydrocarbons, integrated energy, low carbon energy, and effective operations make up the company's four main pillars (Tumanov, 2020). The three regions that makeup BP's operations—the Americas, Europe and Asia, and the Middle East and Africa—are set up to maximize the value of existing assets while making investments in cutting-edge low-carbon technologies and ventures. To expand its global capabilities and look into new growth opportunities, the company has also formed some joint ventures and partnerships with other businesses.

Based on market research and analysis, British Petroleum (BP) is recommended to consider entering the rapidly growing market of electric vehicle (EV) charging stations. The need for EV charging infrastructure is anticipated to increase dramatically over the next several years as a result of the rising demand for EVs and the global trend toward cleaner energy. BP may enter this sector and provide consumers with cutting-edge charging solutions by utilizing its expertise in energy and mobility solutions (Chewning, 2015). By entering this industry, BP can expand its revenue opportunities, diversify its stock holdings, and help the world shift to sustainable energy.

A justified recommendation for a suitable new market to enter with supporting evidence and reasoning

The market for electric vehicle (EV) charging infrastructure could be one that British Petroleum (BP) might enter. Global demand for EVs is rising, and with more EVs on the road comes a greater need for charging stations (Bowers, et.al 2017). This offers BP a rare chance to break into a fast-expanding market and position itself as a pioneer in renewable energy.

Almost 10 million EVs were on the road in 2020, and the International Energy Agency predicts the figure will increase to 145 million by 2030. Since EVs need charging stations to function, this growth offers BP a substantial opportunity to enter the market for EV infrastructure. Also, many governments throughout the world are putting regulations into place to promote the use of EVs, which will increase demand for charging infrastructure. For example, the European Union has set a goal of cutting carbon emissions by 55% by 2030, and promoting the use of EVs which will play a crucial role in achieving this goal. The government of the United Kingdom has announced plans to outlaw the sale of new gasoline and diesel vehicles by 2030, which will increase demand for EVs and charging stations (Quiros, et.al 2015). By installing charging stations in the UK and Europe through its subsidiary, BP Chargemaster, BP has already begun to enter the EV infrastructure market. By 2030, BP stated intentions to significantly enhance the 8,700 charging outlets that make up its present network in Europe to 70,000 charging points.

The infrastructure that BP already has in place and its expertise in the energy sector may provide it with a competitive edge in the market for EV charging facilities. Worldwide, BP operates a significant network of gas stations that might house charging stations. Also, BP's proficiency in managing energy supply chains might be applied to controlling the supply chains for EV charging stations, guaranteeing a dependable and effective service for clients. In addition to the potential financial benefits of entering the EV charging infrastructure market, BP's move into sustainable energy may enhance its reputation and lessen some of the unfavorable public perceptions that have developed as a result of the company's involvement in environmental catastrophes like the Deepwater Horizon oil spill (Yuriy, 2020).

As BP enters the EV charging infrastructure market, there are a few obstacles that will need to be overcome. The requirement for massive infrastructure investment represents one major challenge. To properly compete in the market, BP will need to invest a sizeable amount of resources in building a charging network.To build and keep up a dependable charging network, cooperation with other businesses is required, which might be another challenge. To create a broad and dependable charging network, BP will need to cooperate in conjunction with a wide range of businesses, including automakers and technology companies.

Hence, BP has a huge chance to enter into a developing market and position itself as a pioneer in sustainable energy through the EV charging infrastructure sector. The industry is a compelling opportunity for BP due to the rising demand for EVs and the measures put in place by governments throughout the world to promote their adoption. The corporation may have a competitive edge in the market due to its current infrastructure and experience in handling energy supply chains (Frynas and Mellahi, 2015). The potential benefits of entering the industry outweigh the challenges, which include the necessity for a sizable investment in infrastructure and the requirement to work with other businesses.

Conclusion

British Petroleum (BP) has a massive global footprint and has long been a major force in the global energy sector. BP has understood the need to diversify its business and make investments in new areas as the energy landscape continues to move towards sustainable and renewable sources. The corporation expanded its portfolio of renewable energy sources, made investments in carbon capture and storage technologies, and worked on biofuel and hydrogen fuel cell technologies as part of its varied reaction to these changes. As part of its aspirations to considerably extend its charging network in Europe, BP has also taken steps to enter the market for EV infrastructure. It is commendable that BP has responded to the evolving energy landscape by realizing the necessity to diversify its operations and move toward renewable energy sources. But, BP will still face difficulties, such as the high costs associated with creating new technologies and infrastructure as well as competition from other businesses that are joining the market for sustainable energy.

The report evaluated the ability of the company to respond to shifting market conditions and draw on its experience in managing intricate energy supply chains has been a key factor in BP's international business response. At last it is concluded that to stay competitive in the quickly shifting energy industry, the company will need to maintain this flexibility and agility as it continues to enter new markets. From corporations' international relations and strategies to frameworks that could appraise international business practice, the report summarizes it all.

References

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AMERICAN GUILD OF ORGANISTS, 2023. Regions, (Online). <https://www.agohq.org/regions/ >accessed on 11.03.2023.

Amernic, J. and Craig, R., 2017. CEO speeches and safety culture: British Petroleum before the Deepwater Horizon disaster. Critical perspectives on accounting, 47, pp.61-80.

Arora, M.P. and Lodhia, S., 2017. The BP Gulf of Mexico oil spill: Exploring the link between social and environmental disclosures and reputation risk management. Journal of Cleaner Production, 140, pp.1287-1297.

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Economic Times, 2023.Energy giant BP, BP’s annual profits doubled to £23 billion after oil and gas prices increased last year, (online). <https://economictimes.indiatimes.com/news/international/uk/bps-annual-profits-doubled-to-23-billion-after-oil-and-gas-prices-increased-last year/articleshow/97694601.cms> accessed on 11.03.2023.

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Griffin, R.W. and Pustay, M.W., 2015. International Business: A Managerial Perspective. Pearson Education.

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Kumar, B.R. and Kumar, B.R., 2019. British Petroleum Merger with Amoco. Wealth Creation in the World’s Largest Mergers and Acquisitions: Integrated Case Studies, pp.217-222.

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