Bp Pestle Analysis Essay

3145 Words Mar 22nd, 2011 13 Pages
5th February 2010

Beyond Petroleum
Business Economics Assignment
Student I.D: 1331260

Table of Contents

1. Abstract 2. Introduction 3. Political 4. Economical 5. Society 6. Technology 7. Law 8. Environment 9. Conclusion 10. Appendix 1 11. Appendix 2 12. Appendix 3 13. Harvard Reference

Abstract:
BP is a British global energy company and is the 4th largest company in the world. This report is in relation to BP’s profitability, product development, market power and placement. The report uses PESTLE analysis to investigate these areas providing an insight to the successes and failures of BP during recent years. It covers the failures of Russia which has been a failure in
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Massey R (2009), “Sharks off the British Coast”, daily Mail 19 November 2009, pp.1-4. However, this successful strategy turned to failure when OPEC warned that it would simply increase supply of oil thereby reducing the price if the tankers continued to remain at sea driving the prices up. http://www.bbc.co.uk/iplayer/episode/p005zyn9/Business_Daily_Is_OPEC_in_Control_of_its_Members/. Accessed on 1st February 2010
The recent economic downturn has discouraged BP’s near term earnings because of the lower oil and gas prices together with the decline in demand for crude and refined products. This of course has an effect on BP’s profitability which will also rely on BP’s ability to maximize its assets whilst keeping an eye on operating costs. However, the up side is that BP has enjoyed decades of profitability resulting in nominal debt enabling a healthy payout in dividends. (Appendix 3)

http://www.hemscott.com/news/comment-archive/item.do?id=76608 accessed 4/2/10

The astonishing spike in prices in mid-2008 represents the penalty of a brief epoch where global oil demand outran supply. When supply exceeds demand, microeconomic theory says the price should crumple to the marginal cost of production of the most expensive source. As the price drops, the most expensive wells become uneconomical and are shut down, at least temporarily. Price equilibrium is reached somewhere near the production cost

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