The oil, gas and petrochemicals industries are highly competitive. Within the oil and gas the competition is very strong. There are other countries that supply the fuel if there is a need for commerce, industry and the home. With the competitive industry so much pressure on the prices, affects oil products marketing and requires continuous management focus on reducing unit costs and improvements that are needed(Wikinvest, 2012). The implementation of group strategy requires continued technological advances and innovation including advances in exploration, production, refining, petrochemicals manufacturing technology and advances in technology related to energy usage (Wikinvest, 2012). At BP, the way that the company works could be the competitor’s worse enemy if they knew what technology BP uses.
Oil, gas and product prices are a worldwide supply and ...view middle of the document...
Rapid material and change in oil, gas and product prices can impact strategic decisions based on results. When the marginal product of labor curve rises, the firm experiences increasing marginal returns that are the marginal product of an additional worker exceeds the marginal product of the previous worker (Wikinvest, 2012). This time the rate of oil increase in total product is accelerating. When the marginal product of labor curve falls, the firm experience marginal returns, that is, law of diminishing.
BP Oil Company striving to come up with innovative ideas to keep the company more up to date with technology. They have started to come up ways to lessen the waste management. Back in 2011 when the BP oil spill happened in the gulf, many companies began to blame BP for not implementing new ways that could have been avoided. Sources say BP should have been using the process to identify ways to deal with such an event so that we did not have 80 days of oil flowing uncontrollably into the Gulf (Bloomberg, 2014). Once the oil spill began and none of the systems to stop it worked. BP should have moved immediately to gain access to multiple technology solutions, going beyond any BP internal technologies to find inventions, equipment, and processes that might help (Bloomberg, 2014). Being more prepared for another situation such as the oil spill will bring in more use of innovative technology.
As oil and natural gas lessons, suppliers will attempt to charge as much as the market will bear. That will force demand destruction to have higher prices and become more available. Unfortunately, since American oil demand per household has been relatively inelastic since 1982, demand destruction can only occur if the economy is forced into a recession, and/or Americans make substantial changes to their lifestyle (Cooke, 2007).
www.Buisinessweek.com/Innovation. Bloomberg business week.
Strategic Risk for BP. www.wikinvest.com/BP
Cooke,Ron. The Elasticity of oil Production and Consumption. Published by; Energy Bulletin, March 22, 2007