Introduction
There are many competitors in the Alternative Energy Industry; some of them include BP Alternative energy, Exxon, Mobil and Conoco Phillips. These competitors derive their energy from sources such as biofuel, sunlight, heat, wind, rain, tides and hydrogen. However it should be noted that competition in the industry is determined not only by existing competitors but also by other market forces such as customers, suppliers, potential entrants and the existence of substitute products. Therefore, understanding the level of competition in the industry by a company is very important as the level of profits depends to a large extent, the level of competition. Again the sources of competition can help the firm to gauge its own strengths and weaknesses as well perceive the trends in the industry so that it can position itself optimally for the good returns.
As one of the players in the industry, BP alternative energy specializes in low-carbon energy sources where they have invested heavily. They have focused their production and distribution on carbon businesses in the United States by using onshore wind power, solar power, biofuels, sequestration and carbon capture. Companies like Exxon and Mobil Corp are mostly considered when it comes to energy sources such as corn-based ethanol. Also Exxon dominates in the fuels produced from algae and also Synthetic Genomics Inc.
BP alternative energy has understood its competitors and has developed methods that has distinguished them from others which is essential and critical feature in influencing the development of the company’s competitive strategy. Moreover, it is also a significant feature of the process of strategic planning as it would enable the management to effectively understand their competitive advantage or even the disadvantages that are linked to its competitors (Aaker, 2002, p162).
Bp alternative energy employs strategic marketing in the strategies of entering any new market. This strategy has made the largest producers of solar panels. Through their research and development department they have embraced technology and innovations enabling them produce higher efficiency cells solar panels that are lower cost thus gaining value chain in the solar chain (Bartlett, 2000, p72).
For BP alternative energy to have moved into the information age and to go against their competition, they needed to create a radical new approach to their products that they offered. Moving outside of the traditional structure, focusing on innovation and changing the quality of the solar panels are three of several of the changes that were implemented. This occurred with radical steps that provided further implementation within the corporation to move ahead of the competition while providing information and a stronger brand name to consumers. It would also help the company in the calculation or prediction of the returns that might be made from the future investments. When the company’s management understands its competitors, it would greatly help it in the making of future marketing strategy and plans. All the strategies made by the company should be in line with the philosophy of the company (Coulter, 2008).
Another major competitor in the industry is Conoco Phillips which is among the leading in fossil fuel and bio-fuel technology, and renewable power. Conoco Phillips competitive strategy is based upon several components: Knowledge Sharing; Organizational Culture; and Innovation. Their ability to implement changes rapidly, leveraging culture and diversity differentiates them from their competitors. The organization uses those traits to employ the latest technology to provide energy sources to customers faster than competitors. The long-term competitive strategy is in entering joint-ventures with other firms that fit their business model for sustainable strategic growth (Aaker, 2002).
BP Alternative energy’s Sources of Competitive Advantage
- Focus on Proprietary Technology:- By developing solar panel, BP Alternative energy effectively exerted strong bargaining power over its customers who rely on oil. In effect, by making its brand of alternative energy sources, customers would not be able to shift other brands. Consequently, BP Alternative energy’s strong R&D capability has also enabled it to create innovative products that have increased their market (Keegan, 1997). The foundation for the BP Alternative energy’s strong R&D stemmed from its focus on vertical integration. Essentially, the company normally designed its products from scratch, giving them originality. Subsequently, the company manufactured and developed its products in sophisticated factories. In terms of product positioning, BP Alternative energy became a one-stop shop producer of solar panel and related products. Their strong emphasis on R&D was clearly evident in the expenses it allocated for it (Gerry Jhonson, 2008).
- Strategic Shifts and Alliances:- Although BP Alternative energy focused on doing developing and manufacturing proprietary products, one very critical element of its success today was that it was able to shift strategies in midstream as the industry evolved, although at a huge price. In particular, BP Alternative energy needed to focus on what it produced the best, while seeking other specialists to provide the rest. They have attempted to seek alliances various companies to counter the dominant from other manufacturers (Barlett, 2001).
- Rationalization of Products and Operations: – BP Alternative energy has undertaken a better product rationalization strategy by relinquishing control of technologies which they have not specialized on. They have also consolidated product lines by cutting their thus saving on operating costs
- Marketing Strategies:-The company management of BP Alternative energy knows that to seize market share, people have to connect with it and find inspiration from the brand. To do this, they reenlisted the advertising firms to promote the company’s products. This has promoted BP Alternative energy as a trendy, hippy, cool alternative compared to the solar panels. BP Alternative energy eventually became not just Energy Company, but a cultural force. Realizing the good reception of his products to customers, BP Alternative energy also chose a distribution strategy that enabled the company to reach out to directly to the market. Specifically, he forayed into retailing by setting up BP Alternative energy retail stores all over the country and overseas.
Strengths, Weaknesses, Opportunities, and Threats Analysis
Through the years, BP Alternative energy has grown and achieved financial success because of several inherent strengths and specific, timely strategies it implemented through years to take advantage of opportunities and minimize threats in the industry. The strengths, weaknesses of BP Alternative energy, the opportunities and threats in the industry, as well as the specific strategies implemented by the company are revealed in Figure 1:
Figure 1: Strengths, Weaknesses, Opportunities and Threats Analysis of BP
Reference List
Aaker, D. (2005). Strategic Market Management. NJ: John Wiley and Sons.
Barlett, P. (2001). Business Case from Strategic Management Concepts and Cases.
Gerry Jhonson, K. S. (2008). Exploring Corporate Strategy (8th Ed). Prentice Hall.
Keegan, W. J. (1997). Global Marketing Management. New Delhi: Prentice Hall of India.
Coulter, M. (2008). Strategic Management in Action (4th Ed). Upper Saddle River: NJ: Pearson Education.