INTERNATIONAL BUSINESS

INTERNATIONAL BUSINESS 1

Table of Contents
Part 1: Background and competitiveness ........................................................................................ 2

Part 2: Host nation analysis............................................................................................................. 3

Part 3: BP strategy in host nation.................................................................................................... 4

Bibliography ................................................................................................................................... 7
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Part 1: Background and competitiveness

1. Profile

The set of British geologists exposed huge amount of oil on Masjid-i-Suleiman situated in
Khuzestan province. This was commercially found in oil in a Middle East. The Ali-Qoli Khan
Bakhtiari with William Knox D’Arcy takes permission to discover for oil first time at Middle
East. It has changed the entire region's history. British petroleum in 1981 entered in the solar
technology sector by purchasing 50 percent of Lucas energy system. This organization was an
installer and manufacturer of photovoltaic solar cells. BP is a main corporate estate in Sunbury
on the Thames that is homespun to 3500 staffs and above 50 business units. The operations of
trading are based on 20 Canada Square in the Canary Wharf, London. This has three main
research and development centers in the UK. This organization operates around 40 offshore
fields of oil and gas. BP drives a petrochemical plant that creates acetic anhydride and acetic acid
used in creation of textiles, pharmaceuticals, and many other products of chemical. Operations of
the US includes one-third of the global business interests with the greatest deliberation of
employees and investment (Lee & Anderson, 2011).

It employs more than 14000 employees in the US. Major subsidiary in US is BP America that is
based on Texas, Houston that is the parent organization for BP's functions in the nation. This
organization produced more than 15 percent of the organization's total oil manufacturing and 40
percent of domestic gas. BP is a British international oil and gas organization. Headquarter of the
organization is established in London, UK. This organization is a vertically combined
organization operated in parts of gas and oil industry (Riess, 2018). These include production,
distribution, power generation, exploration, refining, petrochemicals, marketing, and trading.
This organization has a renewable energy interests into wind power, biofuels, and technology of
solar. It has operations in 80 nations worldwide and produced 3.7 barrels per day. It has almost
18700 service stations. The largest division of the organization is BP America that is situated in
the US. This organization is involved in many environmental and incidents of safety (Brown &
Landell-Mills, 2019).

2. Core resources and capabilities

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Business development aspects and growth of the market for BP consider the competitive
environment that is a key business strategy of BP. The competitive environment of BP is a point
to capabilities and responsibilities. This is affected by factors like the reputation and image of a
brand that is related to environmental awareness and social responsibility. Strategies of BP focus
on IT sourcing to leadership building, energy efficiency, management of stakeholders,
application of sources and technologies, safety and concerns of climate change. The investment
of BP led to sustained volume and production growth beyond the expectation. Resources and
capabilities have received a boost by the rise of values of oil and growing demands at a global
level with the BP organization business in petrochemicals, oil and gas production and
exploration, petroleum refining (Klassen & Vereecke, 2012).

This organization is responsible for the marketing, refining, transformation, gasoline sale, jet
fuel, diesel fuel, and other products of petroleum. This industry is highly competitive that
presents organization abilities are stronger and rivals have problems for understanding or
imitating. Capabilities development is essential for the organization to maintain a competitive
advantage. The industry of oil has dominated international oil organizations consisting of BP
Chevron and Shell with organizations of Gulf States. Investment in equipment has helped the
organization to decrease emissions and boost sales. The quick rise in values and project is no
economically feasible that lead to more stringent regulations. This is considered a significant tool
for the industry of energy and influenced by policies of greenhouse gas that draw devotion to
releases & role of monitoring greenhouse gas releases in the industry (Barba-Sánchez & Atienza-
Sahuquillo, 2010).

Part 2: Host nation analysis

3. Political situations

Political factors have a vital role to determine the factors that can impact the organization's term
profitability in the market of Australia. This organization is operating in oil & gas in more than
12 nations. This exposed too many different political system risks and political environment.
This is very diversifying to achieve success in the oil & gas industry around many nations. The
political stability of the organization is important for the sector of oil & gas in the nation's
economy. There is also a risk of military invasion. There is also a level of corruption in levels of
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rules and regulations in the sector of oil and gas. Interference and bureaucracy are in the industry
of oil and gas by the government. Law framework is for enforcement contracts that include
policies, relations of inter nations, lobbying and so on. Markets of the energy are unstable
because of the changing requirement of oil and geopolitical inconsistency of Chinese economy
that create unpredictability in many nations. Nation governments encouraged to select more
forms of sustainable energy due to the destabilization of climate from emissions of carbon
dioxide (Etemad & Dulude, 2018).

This is known as a leading organization in the industry. There are many opportunities for the
organization to practices a differentiated strategy of pricing. This will enable the organization to
maintain loyal customers by effective services and lure consumers by the value oriented
propositions. New technology standard adoption and free trade agreement of government have
delivered many opportunities for BP. The rate of low inflation has brought more stability within
the market and enabled credit cards with a lower interest rate to BP customers. The green drive
of government has opened an opportunity for BP products procurement with the state and federal
government contractors. The organization has not gotten effective success with integrating
organizations by the different cultures of work. This organization has a share of failure to merge
organizations that have different cultures of work. Research and development (R&D) investment
are below the fastest growing players within the industry. This organization is spending more
than the average on (R&D). This organization is not capable to compete with the leading player
regarding innovation. This is a mature organization that looks to bring based on the product on
tested features within the market (Leung, 2012).

Part 3: BP strategy in the host nation

4. Evaluation

The strategy and structure of BP to enter the Sri Lanka market is to deliver new and effective
methods for the low carbon future. The strategy of the organization is designed to see the many
issues by the development of new technology energy that will formed more effectively in the
new ways that help the organization to meet expected rise in the demand (Saxena, 2019). This
will also allow the organization to be competitive within the time with the prices, technology,
policies, and preferences of customers that are evolving rapidly. The BP has a balanced portfolio
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strategy with privileged oil and gas. The competitive downward and the low carbon activities
range by flexibility of the strategy gives optionality. Portfolio strategy of the organization will
have generated the flexibility of strategy that embraces the transition of energy in a manner that
increases investor proposition by regularly meeting the requirement for energy. Direct exporting
of BP will be the entry strategy to enter the market of Sri Lanka. This is the fastest mode for
entry into international business. This is also known as direct sales. The potential demand for
products and goods will help the organization to utilize the strategy of direct exporting to test
products in the international market before a bigger investment. This will also help the
organization to save goodwill, patents, trademarks, and many other intangible assets (Delaney,
2019).

This will improve the organization's financial performance. This also allows the organization to
augment the returns to achieve investment in research and development. Rotation of products
and services will also help the organization to the viable lifespan of every opportunity that can be
amplified. The organization will focus more on the large range of trends due to its effective level
of access in the global market and focus more on the design, quality, and development of a
product that improve and diversify (Farooq, 2019).

There will be always a political risk for BP. Different nations provide their specific political risk
at diverse levels. Changes at domestic levels present an ongoing issue. The government can
modify laws in a bigoted fashion or generate regulation that impacts the organization. Different
culture has different attitudes, expectations, and standards. These can lead to faults and damage
the name of the trademark and can be expensive towards the bottom line. Steps of sales
procedures can generate offense. Inappropriate presentations can permanently damage an
organization's reputation (Holder & Mark, 2013).

 Alternative and additional activities

Risk in the foreign market entry cannot be reduced from international trade (Warner, 2014). The
series of insurances, contracts, and financial tool business can support the organization to protect
streams revenue that enables the business to develop more effectively. As a responsible person, I
will decrease the risk by taking benefit of monetary rates of exchange. This organization must
focus on competitiveness by observing a huge range of tendencies because of the global market
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access. This will help the organization to improve the design, quality, and development of the
product. BP can protect the business from risk due to international business. An organization
with a global presence can maintain profitability by the domestic support of customers.
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Bibliography
Brown, J. & Landell-Mills, N., 2019. Financial Times. [Online]
Available at: https://www.ft.com/stream/ccd05942-e442-4e21-906d-4e25d932e4cc
[Accessed 26 10 2019].

Delaney, L., 2019. Advantages and Disadvantages. [Online]

Available at: thebalancesmb.com/direct-exporting-advantages-and-disadvantages-1953310
[Accessed 24 10 2019].

Farooq, U., 2019. Advantages and Disadvantages of Foreign Trade in Detail. [Online]
Available at: https://www.businessstudynotes.com/others/introduction-to-business/explain-
importance-foreign-trade-detail/
[Accessed 24 10 2019].

Holder, J. & Mark, P., 2013. Information For The Organization. [Online]
Available at: https://www.bp.com/en/global/corporate/what-we-do/our-strategy.html
[Accessed 24 10 2019].

Klassen, R. & Vereecke, A., 2012. Capabilities Link Responsibilities. International Journal of
Production Economics, 140(01), pp. 103-115.

Lee, P. & Anderson, M., 2011. BP PLC. [Online]

Available at: https://www.britannica.com/topic/BP-PLC
[Accessed 26 10 2019].

Saxena, D., 2019. Super Heuristics. [Online]

Available at: https://www.superheuristics.com/5-modes-of-entry-into-international-markets/
[Accessed 24 10 2019].

Warner, D., 2014. Risk Within The Foreign Market. [Online]

Available at: https://howtoexportimport.com/Types-of-risks-in-International-Trade-4433.aspx
[Accessed 26 10 2019].

Barba-Sánchez, V. and Atienza-Sahuquillo, C., 2010. Integration of the environment in

managerial strategy: application of the resource-based theory of competitive advantage, dynamic
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capabilities and corporate social responsibilities. African Journal of Business Management, 4(6),
p.1155.

Etemad, H. and Dulude, L.S., 2018. Managing the Multinational Subsidiary: Response to
Environmental Changes and the Host Nation R&D Policies. Routledge.

Leung, X.Y., Wang, F., Wu, B., Bai, B., Stahura, K.A. and Xie, Z., 2012. A social network
analysis of overseas tourist movement patterns in Beijing: The impact of the Olympic
Games. International Journal of Tourism Research, 14(5), pp.469-484.