Critically evaluate methods of planning and organising efficient operations and networking.
Analyse the problems of controlling component activities and of controlling quality.
Critically discuss methods of project evaluation and of scheduling resources.
Operations management is one of the key management sections that help to run the organisational operation in a smooth way. The study of operations management is extremely important since it helps to understand the different attributes of operational management and develop a strong operations strategy for a company. British Petroleum is one of the largest Oil and Gas companies which work all around the world. It is important to mention that British Petroleum has over the years focused on effective operational strategy which has helped the company to effectively develop their market share, gain competitive advantage et cetera. The present study will take into account the different aspects of operational strategy for instance competitor analysis, discussion of effective operational strategy formulation, framing of competitive strategies. Finally the study will also try to delve deep into the different developmental aspects and make strategy improvement giving recommendations to develop the operational strategy (Slack, 2015 p, 36).
Overview of the company
British Petroleum is one of the largest oil and gas companies which have its base almost all around the world. The company caters to oil and gas needs of a huge population and also to industries that has made the company one of the leading oil and gas companies in the world. British Petroleum is mostly renowned for its huge extraction and supply of energy products all across the world. The company has to section upstream and downstream where the downstream section mainly focuses on the refining and marketing of fuels, lubricants and petrochemicals et cetera. The company was established in the year 1909 in London United Kingdom. Over the years the company has become one of the market giants catering to all the segments of the market. The company has the world’s fifth largest turnover with 225.98billion calculated in the fiscal year of 2015. The company sells petroleum, natural gas, motor fuels, gasoline and high octane gasoline and petrochemicals et cetera (Slack et al., 2010 p, 29). All around the world the company has its supply chain which has helped the company to keep connected with consumers. The company has strong value to have safety at the workplace, respect for each one of the employees, excellence and an efficient team. BP is also counted as one of the largest oil and gas companies offering employment opportunities to young and talented people. BP has always been focused on doing the right thing at the right time which has always been its code of business conduct (Jacobs et al., 2010 p, 60).
Fig 1: Sales Trend BP (Source: Jacobs et al., 2010 p, 60)
BP is considered as one of the major oil and gas companies in the world and is also taken into the group of “Big Oil” a group of all the major companies dealing with energy products and services. The present market position of the company is precarious even though the company has huge stock and asset. It is important to mention that British Petroleum Plc in the recent years have invested huge amount of money in oil production but with the price of oil falling rapidly over the years it turned out to be a poor decision by the company. The company is the third largest publicly traded company and is considered to be one of the key companies in the IOC. The company earned around $225.98 billion which is one of the highest by any oil and gas selling company. Even though the company is facing hard times recently it assumes a huge place in the market being the fifth largest company by revenue (Wheelen & Hunger, 2011 p, 55).
Fig 2: Market Position BP Plc (Source: Wheelen & Hunger, 2011 p, 55)
BP is a diversified energy product selling company who indulge in oil and gas explorations and development, production and transportation of crude oil and natural gas. BP is responsible for refining, marketing, and transportation and sales of different petrochemical products. BP faces steep competition in the market from the larger oil and gas companies like Exxon Mobil, Chevron, Royal Dutch Shell et cetera. It is extremely important to mention that the OPEC countries also stand to be a huge competitor for the company and also the GSEs like The Saudi Aramco. Hence it could be said that BP has tough competition in the market (Slack et al., 2009 p, 11).
BP has strong market share in some parts of the world where the company sells huge amount of oil and natural gas and also the derivatives of oil. It is extremely important to mention that since the company extensively operates from UK it has a huge market share in UK as well as the European Union. Oil is the most used fossil fuel in the world and accounts to around 36.2% of consumption. Overall revenue of the company as calculated in the year 2015 is USD 226 billion. The stock price of the company has been consistently above 450.85 pounds. The company has strong market price and share status which gives positive indication about the market share of the company (Helfat & Winter, 2011 p, 39).
Fig 3: Market Share BP Plc (Source: Helfat & Winter, 2011 p, 39)
Stages of Operational strategy
The operational strategy is an extremely important strategy for running the smooth operation of the organisation. It is important to mention that effective operational strategy will help a company to develop the business operations effectively. The main objective of framing and operational strategy is to focus on achieving the sole objective of growth and development of the organisation. Operational strategy involves formulating the objective and then Focusing on the various strategies to implement the objective. After effective formulation and implementation of strategy its monitoring helps a company to gain different insights on how to improve the plan effectively. And finally controlling the strategy effectively for the development of the operational strategy will help a company to achieve the organisational objectives effectively. Hence it could be said that the process of framing the operational strategy will have to be followed in a synchronised way so that it gives the right platform to the company to gain effective outcome from the implementation (Freeman, 2010 p, 66).
Formulation: Formulation stage features on the different ideas and plans which are taken into for the effective formulation of the strategy. It is important to mention that operational strategy formulation will mainly relate to different strategic decisions that will affect the operation of the organisation. Hence it could be said that the overall process of formulation will give out the operational strategy that a company will focus on to achieve its organisational outcomes.
Implementation: The stage of implementation focuses on the right implementation of the developed organisational strategy. Implementation of the organisational strategy will involve the different analysis that a company has to do to understand the different strategic resources it will need for the successful implementation of the strategy. It is also important to mention that the implementation is the practical usage of the plan and hence it is important to make sure that all the different resources are used effectively at the same time to get the best possible solution.
Monitoring: Monitoring is another key stage in the process of using the operational strategy. The operational strategy has to be constantly used and monitored so that the shortcomings and the loopholes of the plan could be understood effectively (Brown et al., 2013 p, 71). It will help to develop alternative strategy which would help to continuously develop capabilities and strategies which would continue to use the same strategy effectively.
Control: Control could also be stated as the supporting stage that helps a company to continuously use the organisational strategy as well as improve the strategy to develop and control different aspects to get favorable outcomes. In order to get the best possible outcome from the operational strategy it is very important for a company to have control strategies for the business (Krajewski et al., 2013 p, 98).
The application of operational strategy is extremely important for British Petroleum since the oil and gas industry has become highly competitive. It is extremely important to mention that over the years companies have focused on developing effective organisational strategy which would help the company to sustain in the market for a long time. British Petroleum focuses on following all the key stages which are involved in the process of framing operational strategy.
British Petroleum assesses all the available resources that would help the company to understand the status of its strategic capabilities and resources. Based on strategic capabilities and resources the company frames its operational strategies. BP highly emphasise on having an operational strategy which includes its stakeholders directly. The company focuses on having their stakeholders in line with its strategy as it will help to address the needs and wants of the stakeholders as well as help to develop a strong platform to implement their operational strategy.
Implementation of the strategy is done by BP with its major resources and capabilities. BP’s one of the major resources is their workforce and hence the company tries to use its workforce in the best possible way. The workforce of the company is highly talented and efficient and is always up for a challenge which helps the company to work effectively (Hill & Hill, 2012).
Monitoring the operational strategy of BP involves different strategies and methods. The company focuses on different monitoring methods like 360 degree feedback method which helps the company to understand the different aspects implemented in the overall strategy. Monitoring helps BP to understand the operational strategy implemented by the organisation.
Controlling is the final stage that helps the company to control resources which would help the company to get effective outcomes from the strategy implementation. The entire process relies on controlling as it helps to finally understand the outcomes that are received effectively. Hence it could be said that this helps in getting effective results from strategy implementation by BP (Krajewski et al., 2013 p, 85).
There are three key competitive strategies that could help BP for instance Cost leadership strategy, focus strategy and differentiation strategy. Cost leadership Strategy is used by the company to which helps the company to handle production and distribution cost. This helps the company to reduce production and distribution cost which helps the company to deliver the services effectively. On the other hand differentiation strategy is used by BP to effectively differentiate the products which they offer. They offer what their competitors cannot offer. It is important to mention that the final strategy that the company focuses on is focus strategy. The company focuses on selling particular products in particular areas which help the company to create a unique space for it in the market (Brown et al., 2013 p, 76).
Strategy improvement is the process of improving the operational strategy of the company effective by understanding and deploying certain new strategies to make the operational strategy a success. Strategy improvement is mainly a selection criterion which helps to identify the key improvement initiatives and work on them accordingly. The Operations management highly contributes to develop the organisational strategy with the help of effective innovative ideas, business leaderships and supply chain improvement and human resource development and implementation of Information and Technology data system (Wheelen & Hunger, 2011 p, 49).
Task 5 Conclusion & recommendation
The present study involves the discussion of different aspects which help to implement the operational strategy effectively for a business. Operational management is an extremely important tool which helps to gain competitive advantage in the market. The oil and gas market is highly competitive and hence it is important for BP to develop a strong competitive strategy which would help to capture more market share in this highly competitive market. The present study has discussed all the important aspects of operations management which has helped to cover up the objectives. Every company wants to develop the business and there are certain measures which could be taken by BP given below:
To invest more on deepwater oil wells as most of the bigger companies have failed to do it.
Getting more efficient workforce for operation.
Effective usage of Information Technology to handle upstream and downstream mechanism for the company.
Developing the supply chain management to gain easy access to the consumer base and effective distribution.
Finally risk management is an extremely important aspect that the company has to focus on effectively (Slack, 2015 p, 98).
References
Brown, S., Bessant, J. R., & Lamming, R. (2013). Strategic operations management. Routledge.
Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge University Press.
Helfat, C. E., & Winter, S. G. (2011). Untangling dynamic and operational capabilities: Strategy for the (N) everâ€Âchanging world. Strategic management journal, 32(11), 1243-1250.
Hill, A., & Hill, T. (2012). Operations management. Palgrave Macmillan.
Jacobs, F. R., Chase, R. B., & Chase, R. (2010). Operations and supply chain management. McGraw-Hill/Irwin.
Krajewski, L. J., Ritzman, L. P., & Malhotra, M. K. (2013). Operations management: processes and supply chains. New York: Pearson.
Slack, N. (2015). Operations strategy. John Wiley & Sons, Ltd.
Slack, N., Chambers, S., & Johnston, R. (2009). Operations and process management: principles and practice for strategic impact. Pearson Education.
Slack, N., Chambers, S., & Johnston, R. (2010). Operations management. Pearson education.
Wheelen, T. L., & Hunger, J. D. (2011). Concepts in strategic management and business policy. Pearson Education India.
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