British petroleum

British Petroleum

Overview:

British Petroleum is a British-global corporation working in energy and stands tall as Britain's top corporation and ranking the third largest energy organization in the world and 4th largest company worldwide. Today's BP was formed as British Petroleum from former Anglo-Iranian Oil Company (AIOC 1935) in 1954.Now this energy giant employs over 92,000 people across 100 countries. In the journey of being a global energy company from a local company, British Petroleum has walked for 103 years. BP has been successfully serving its customers with its wide range of quality products i.e. LPG gas, oil, Biofuels , fuel for transportation, industrial lubricants, petrochemical products, solar powered energy etc.

British Petroleum is not only producing its regular energy products but also it is innovating technology and applied science regularly to its products and making things better delivering environment friendly and alternate source of energy e.g.; Solar, wind Biofuels and carbon capture etc(www.bp.com). "We can't put all our energy in one barrel" and "Beyond Petroleum" (www.guardian.co.uk/environment/2008/nov/20) are its slogans and missions which shows its commitment and sincerity towards nature and customer's ultimate want.

Emphasizing the customers' needs:

Customer do not simply buy the goods or products rather they buy the set of their wants, needs, expectations and passions inside the quality box. Similarly, customers are expecting much more than just a product or service. They want a product which is inexpensive, attractive, reliable, high quality, readily available and so on (Donald Waters, C. Donald J. Waters: 98).which the British Petroleum has successfully adapted to differentiate itself among other energy companies. As the proff. David Gavin (1987) has suggested that the customers, today, are willing to have the following eight quality characteristics on what they buy or want to purchase and BP is satisfying its millions of customers applying the same policy.

  1. Performance
  2. In this particular segment customers are interested to see the way the product operates or performs. Different level of petroleums with their standards and quality that British Petroleum is providing to the customers, seems acceptable. Because of their eagle eye on customer's interests, the company has been successful to provide the world class of high performing petrol and gas to the customers.

  3. Features
  4. Peoples are expecting some extras and add-ons within the limit of their purchasing of certain products and their services. And British Petroleum has maintained to be around its customers always e.g. they are offering the unprecedented power warranty at the purchase of BP solar, in road side cafes as the new part of campaign, they were offering the range of promotional gifts(www.logo-id-promotion.co.uk/.../BP). Online gas and electricity tariffs and the discounts as well as saving deals etc.

  5. Reliability
  6. Here the customers want to get assured where a product or service should be able to deliver what it is supposed to do for certain time limit under specific conditions. This is one of the best loved parts of the BP as millions of customers are happy with the performance of its products be it BP gas or Petrol or any other retail brands. Customers do not think about its substitute as it is exactly providing to the customers as they want.eg the perfect mileage from the BP petrol per liter per hour, the uninterrupted gas service, the five star service with the customers etc.

  7. Conformance
  8. Meeting the established standards to the degree to which its products and service has been the minimum criteria of BP products. However they have been criticized also many times regarding their own safety measures and failing to comply the safety standards (Sheila McNulty in Houston, Financial Times Sep 28, 2009).

  9. Durability
  10. This relates to the products they will ensure the life expectancy and most of the BP products are daily consuming products and their LPG provides 50% more miles than petrol. Eg highly durable BP solar PV panels etc.

  11. Serviceability
  12. Serviceability is something that the customers is always wishing to have and British Petroleum is many feet ahead than its competitors as they provide their service in almost every possible corners of the place for the ease of its access to the customers. Their availability along with the high quality has made the people to be with BP for years (//journals.pepublishing.com/content/ /).

  13. Aesthetics
  14. Appeal and good appearance com under this section and BP has been the big name among the customers for it.eg.BP gas and the petrol has been as the safe way of being with it and its products. However its its operation and maintenance has been questioned fewer of times (www.foodandwaterwatch.org:08-07-2009).

  15. Perceived quality
  16. This shows the consumer's opinion of a brand and its reputation and the public image. British Petroleum already has built a giant goodwill and name among its consumers.

Products and Services

When a certain product comes in front of a customer, it should mean to fulfill the requirements of the consumer. When a product can not satisfy the customer's needs and expectation, obviously the product is unsuccessful. A product in a sale is supposed to be sold and make profit out of it and if not, the whole process is vanished. Followings are the necessary things to make a product successful.

Design of Products and Services

Usually customers see the products and the services as a first thing of any company. Hence to make an organization stronger, aggressive and competitive, designs of the products and the service should me most updated. British Petroleum is a strong example for its updated and innovative ideas of designing its products and services. From a decade the journey of BP has been successful not because of its products only but winning the consumers needs and expectations with continuous improvements in service and designs.eg. They have come up with the fuel which give the high performance with less pollution and is working on hydrogen fuel cells for cleaner energy.

Moreover, they have made their service easier through gas and fuel cards and some of the online services as well. This sort of consistent improvement inside the organization is helping BP to remain at the top of the energy sector corporations.

Conceptual selling

While making a purchase, customers are not simply buying the product or service; they buy the set of their expected benefits according to their needs and wants. This is known as the concept of the product or service (Nigel Slack2001). While being in the gas or fuel station or to buy a solar product, a consumer is buying a concept of a company according to their needs and beliefs. BP has developed a selling concept in such a way that customers are bound to buy its products because they do not see any other alternatives. I.e. they are extremely satisfied with BP and its products.

Package of products and service

The package is generally referred as the collection or combination of products and services. e.g. Most of the people who reach to the gas station or petrol pump they want a fuel which simply doesn't make a vehicle move but run properly in a good condition for longer miles without damaging the engine of a car. And that is what a BP delivering customers. This is giving a package to the consumers; the fuel which gives extra miles as well as saves the environment. They are providing some cut offs in rates and guaranties for years while buying some solar powers and that comes in package with a brand name. BP could just provide a regular service but they are growing massively and continuously because of their design process in their product and service they are providing.

Processes

As N, Slack says that "the package of components which makes up a product, service or process are the ingredients of the design". This is where the whole thing goes in the process simultaneously along with the customers. The regular follow up by the customer care from the BP, providing the extra benefits for the customers which fall in this process.

Operational Systems and processes

Service Quality

A quality system is a strategic and a integrated management system which involves all the managers and the employees to improve the organization's processes both qualitatively and quantitatively in order to meet and exceed the customer's needs, wants and expectations (D.H. Stamatis 1996).

The researchers Berry, Parasuraman and Zeithaml;1994 have researched about what is the customers' expectation and what the quality charecteristics mean to them from a service industry and they have identified the followings. This closely relates to the BP in terms of their service and product quality.

Reliability

A consistency in delivering the service from years and the wonderful performing products and service has made consumers more and more dependable to the BP brands. A service that initiated the fuel and gas service in the market for thee consumers and has adopted the science and technology for better satisfaction to its dependants i.e customers can be taken as an precise example. Accuracy in every steps and every service delivery is the another part of its bright part of British Petroleum.

Responsiveness

The employees of BP are the example in the customer care and customer service which they are providing with honesty and dignity. This ability, knowledge and skills of interpreting the habits and the expectations of the customers and responding accordingly have not been on its own. They have frequently been training their employees for the better performance in field, face to face and anywhere

Access

Access means the capability of a service provider to specify the service or to sense weather the service has been delivered on a regular basis or properly during the normal hour or extended period of time while operating. E.g. a busy consumer which has been waiting for the service for longer period of time and a alternative way of serving the customer without killing the time and effort of a customer is a widely adopted culture of BP. They try as much as possible to fulfill their commitments.

Courtesy

Generally in most of the cases the patience, knowledge, understanding & tact, humorous way of dealing are the BP service managers' routines. Their good manners and friendliness while delivering the service be it in Telephonic BP customer service, face to face in any fuel stations or retail stores is their culture of the organization.

Communication

Ability to deliver the exact message clearly, openly and in straight forward sensible language which the customers understand is the perfect definition of communication. It has not been heard so far about the bad mouth of the BP service provider towards their customers in and out. They have recently done a in-house survey about the service delivery of their staffs and they have been found a superbly organized in terms of quality service (www.bp.com).

Credibility

This is where British Petroleum is proud of as they believe it is the most loved organization in energy sector and the base of which is built in honesty and trustworthiness. This applies to its working staffs as well.

Security

One of the core expectations of the customers where they want to feel assure about the product they are using and going to use. Can be illustrated as freedom from risk or danger and there is where the British Gas, BP solar and other many brands are ahead of its competitors as they have been able to assure its consumers that these are the most safest ways of living a life. e.g. from generations, people are happy and satisfy with BP gas because they know and believe that this is the most safest way of using a gas or fuel.

Understanding the customers

BP has a policy where they normally do not lose their regular customer and this is not only because their products bring quality rather they do have a ability to provide the specialize attention to the customer which meets the needs and expectations of a individual customer and also value recognition as well as paying the extra attention to the people who are the regular consumer of their products.

Tangibles

Their fascinating products and scientifically proved new- way technologies in terms of energy are their extras which can be termed under tangibles. Online service centre, cards and saving ports and deals while buying the products also helping to maximize the benefits of the customers and meeting their ultimate requirements.

Capacity planning and process layout

This is a systemic approach to three issues related to capacity; estimating the amount of capacity which is required, evaluation of alternative method of augmenting capacity and devising methods to use capacity effectively ( (mahadevan, 2007).

If we see years back to the BP history, it was a fourth largest oil company world in mid- 1990s with the revenue of $57 billion (1995). However the late 1980s and early 1990s had been the difficult time for the organization. Falling down the price had been the main reason of its downfall. Company had lost millions of dollars in 1992 which was the first big financial loss of the company. but within the five years time the company has come back with bang with the total profit of $4.62 billion and the revenue in 1997 was $71.27 billion (Jeffrey Pfeffer, 2000)

Higher chains in management inside the organization seemed a pitfall of the company heavy loss. This made the decision making a slow process and cumbersome. In 1998, BP head office only had 86 committees and each of the six managing directors . Their single financial proposal needed fifteen signatures to be approved and that applied in every problem solving and managing the queries. After all through the extensive training programmes and workshops within the management level which communicated about the proclamation of the value such as; teamwork, openness, care, empowerment and trust, they have come up with the ground breaking success in management and eventually in sales as well.

According to the recent report of BP, 2008, this energy giant has got the revenue of $361,143 million with more than 92,000 employees and the company ranks in Global 500 (www.zoominfo.com).

With the support of their latest technologies and findings, the BP is making its products and service better and improving them continuously. In order to become the one of the biggest organizations in the world, and walking together by side with the millions of consumers they have adopted a new science in field, a extensive need-to-change approach and the customer focused marketing and service. Their new idea to come with cleaner energy, green technology, environmental friendly products and the research to the alternate energies like wind energy and solar energy is their secret of massive success in energy sector.

Products and services

BP is giving its service worldwide with its products; oil, energy, natural gas, petroleum and solar panels. BP ranks in top three corporations in terms of reserves in global oil and gas industry and is operating in Asia, Africa, America Australia and Europe. Europe is responsible for the more than 70% of company's profit.

BP is the largest retailer of gasoline in United States and has got more than 17,600 service stations nationwide.

BP sales its products in more than 100 countries worldwide and has got the network of 11,850 BP branded stations throughout the rest of the world and 1,525 in the UK. Moreover BP supplies the fuels to the numerous Safeway supermarkets.

BP is retailing its Castrol branded lubricants in more than 50 countries worldwide. In addition, BP is the one of the largest marketer of aviation fuels and lubricants in shipping industry which includes the 900 ports 1400 airport worldwide (www.corporatewatch.org).

Monitoring and evaluation

In this arena of economics and business, many firms are aware how to organize themselves and their organizations to deliver the exceptional performance. One those most successful examples has been BP. In late 1980s , when BP was passing through the extremely tough time because of its in-house politics and top heavy bureaucracy and this factor knelt them down for years. Performance declined and company heavily indebted which almost led them to bankruptcy in 1992.

Later the management realized the fact what was dragging them behind and the key reasons they found was, the almost null level of contact to the junior levels from the senior management levels, unnecessarily unmanaged way of tall hierarchy, lack of communication etc. they confessed and improved and the result came better in few years.

In contrast, in recent fiscal years, BP has succeeded to make the some of the highest profits ever recorded by any corporation by $4 billion in third quarter of 2004 alone. In fact the cost effective operation in exploration and production business, contributed for this result. The operational excellence was improved and maintained in the possible circumstances that could have resulted their black days in the workings of the organization (www.gsb.stanford.edu/news).

Company was mainly focusing in three business i.e. oil and gas exploration and production, petrochemicals and petroleum refining and marketing. However these all three counterpart business were running independently.

Finding the new path

The enhanced performance of BP began when Robert Horton became the CEO in 1990. He focused on the improvement in the speed and the effectiveness in decision making process of managers. Moreover he transferred the authority of many criteria of business from corporate to the marketing and business streams. This eventually decreased the layers of management and cut out the extra expenses from headquarter staffing. This process encouraged the employees, their self motivation and enthusiasm. Now the employees were happier to take responsibilities and initiatives with challenges.

Company had to face ups and downs number of times and after John Browne, who took the command of CEO in 1995, further elaborated the working pattern, freedom and the authority of the managers and employees. The managers of number of fields were given the authority to decide how to run their operations and achieving their targets. They directly negotiated with the top management of BP; this produced the better performance of employees and sales.

Furthermore, pay of the managers became on the basis of performance. This performance based compensation for the employee increased the variability of the incentives and pay and the asset managers found this newly formed system more liberating and they welcomed entrepreneurially with increased enthusiasm and effort. These small changes in organizational architecture and system eventually led to the fundamental cultural changes. This made the BP's people more dedicated delivering the ever- improving performance. Strong values and norms emerged of mutual trust, helping each other, seeking for assistance, responding, committed, keeping promises regarding performance. This logic and changes helped to the organization especially when BP acquired the similar and smaller organizations Amoco and Arco because the new assets were quickly adopted by the employees.

Nonetheless, BP remains successful proving that the real gain in business can often be achieved by exploring the new designs that hold the basic logic. BP has set a model and these include and explain;

  • Focusing the goals and objective of a firm.
  • Creating business units which clearly depict the responsibility scope and clean accountability.
  • Providing the incentives and recognition on the basis of performance.
  • Making a precise link throughout the units, employees and teams rather than creating the complex communication structure through the hierarchy.
  • Outsourcing.
  • Improving communication or information systems.
  • Creating a culture within the organization leaning to delivering the performance.

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