Global Energy Industry And Investigate How British Petroleum

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Introduction
The first section of this assignment will give an overview of the global energy industry and investigate how British Petroleum (BP) positions itself in the market for global competition. An analysis of industry relationships with other MNC’s and governments followed by how BP’s performance against competitors impacts their position in the market for global competition will be conducted. This will be followed by an evaluation of the strategic options open to multinational corporations to enhance global competitiveness.
Energy Industry Overview
Gloabalisation can be defined as the ‘broadening set of interdependent relationships among people from different parts of a world that happens to be divided into nations’ (Daniels 2009).
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The companies website describes itself as ‘providing customers with fuel for transportation, energy for heat and light, and the petrochemicals products for many consumer goods (BP 2014a). As of year-end 2013, BP operated in 80 countries, with nearly 84,000 employees, owns around 17,800 service stations and produces 3.2 million barrels of oil per day. BP is vertically integrated and operates in all areas of the oil and gas industry and had a market capitalisation of £85.2 billion as of April 2013, making it a truly global company (BP 2014a).

How Does BP Position Itself in the Market For Global Competition?
Value Chain
Michael Porters (1998) value chain model addresses activities that create, deliver and support a company’s product or service and thus its overall position and competitive strength in the market for global competition shown in Fig. 1.

Fig. 1. Porter’s Value Chain System, (Pintle 2011).
The value chain is separated into primary activities, directly concerned with creation and delivery of goods. Then support activities, indirect undertakings concerned with activities focused on increasing productivity and effectiveness.
BP Primary Activities:
• Inbound Logistics: Heavy emphasis on research and development in terms of technological innovations to enhance transportation scheduling, ability to reduce logistics costs and extraction of fuel sources. BP (2014b) is investing
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