Alternative Energy Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Alternative Energy Case Solution

PROBLEM STATEMENT:

The company is considering taking the decision of diversification strategy in order to sustain in the market. The diversification plan is entirely an unrelated diversification, which is converse to its existing business and has put the officials of the company in-depth analysis of the market, and the consumers’behavior. The company also has to decide over whether to pursue the diversification and to take a leap of faith and be the first mover in the Organic fuel industry,and whether this move will improve its performance in the industry or whether it will ruin the company’s brand image.

INTERNAL ANALYSIS:

BUSINESS STRAEGY OF BP

According to the theories, the business strategy encompasses the overall business theme, its competitive business theme, the way it operates in the market, the competitive advantage it has over the competition and its positioning strategies. Few examples of these strategies are such as differentiation, cost leadership, diversification,product enhancement and market penetration. The business strategy of BP is based on differentiation, which is the reason of its sustainability in the changing market trends over 70 countries.The company is currently focusing on entering the new market by adopting diversification strategy and changing the whole game in the market of petroleum. The corporate strategy deals with the area of company, which focuses on profitability. The company has decided to jump into an entirely new venue, which is natural gas fuel, energy and power derived from wind and solar in order to sustain in the market while performing its corporate social responsibility. The company has analyzed the shift in the behaviors of the customers, who are switching towards more organic products, as well as they want fuel which does not causes any pollution, and this is a big market of opportunities for the subsidiary of BP.ALTERNATIVE ENERGY The company seeks AE as a portfolio that will guarantee the presence of the company in the long run, which will generate higher profits in the future as the customers will adapt the new trend of saving the environment.

Furthermore, the company has used the marketing strategy of linking climate changes with the environmental changes. In order to make AE a success,the company should cater the target audience by enlightening them regarding the causes of climatic changes, which is pollution and giving them a solution which is AE.

SWOT ANALYSIS

Strengths

The strengths of BP will diffuse to be the strengths of Alternative Energy,as the impact of the public image of the parent company adheres to the image of its SBU. AE has following strengths over its competition:

The brand image of BP is acceptable in the market which will help AE to become acceptable by the consumers.
First mover advantage The company has stepped into the blue occasion strategy by launching a business that is environmental friendly.Currently, the service is not being provided by any of the competitors of BP,in fact they are focusing in faster consumption of energy and fossil fuels rather than looking for alternative methods.
Changing trend: Thew hole world is going through climatic changes due to greenhouse effect.The meteorologist and environment specialist are focusing and emphasizing on the use of environment friendly product, therefore AE has a large market to capture and serve.
The latest technology of renewable will prove to be consumption saving,which will help to fulfill the future demand of fuel.

Weakness

The company has recently encountered a deep-water spill in Mexico which has negatively affected the public image of the company as well as its market share, as after the spill many countries put a ban on BP and raised the trade safety barriers.The business setup of AE will be a challenge for the company due to its bad public image in the Gulf of Mexico....................
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