BP Case (Strategic Management, Brad MacKay, Nov. 10th) 9-708-026

1. 2007:  Tony Hayward becomes CEO of BP (British Petroleum)
2. Predecessor to Hayward:  Browne
3. BP began to voluntary reduce carbon emissions under Browne's tenure
4. Tony Hayward delivered this speech on climate change in 2007 shortly after becoming CEO of BP
5. Browne and Hayward had both risen from Production and Exploration
6. Hayward spoke ahead of the 2007 G8 Summit, which would address the issue of 2012 Kyoto Protocol expiration
7. BP began to struggle with safety:
1. 2005 Texas refinery explosion
2. 2006 Alaska spill
8. Class Questions On BP Case:
1. On pages 4 and 5 it states "Browne asserted that BP had a responsibility to take action, and that the company would take specific measures, not only to reduce its greenhouse emissions, but also "to fund scientific research, to take initiatives for joint implementation, to develop alternative fuels for the long term, and to contribute to other public policy debate in search of wider global answers"
2. Sustainable corporate strategy in long run?
1. "first mover" in the industry
2. PR tool to enhance brand image
3. drifted from their core competencies such as safety.  Too focused on greenhouse emissions
4. Core functions should remain focus.  Drilling practices.  Employee focus.
5. Solar, wind, other new industries take focus away from oil, but this allows growth in
3. Strategic benefits for the company?
1. diversification
2. PR benefits of a cleaner image
3. Government support, subsidies
4. Competitive advantage in long run?
1. diversification
2. PR benefits
5. DWH spill changes what?
1. PR image
2. extensive damage
3. technical challenges
4. scenario planning
6. Recommendations?
1. greater scenario planning
2. risk management errors
3. sustainable growth- new technology complicated
9. BP's 2010 income statement:
1. 800 million R&D- where alternative energy research expenses would be categorized.
2. 12 billion sales, marketing and administrative expenses
10. Class Discussion: 
1. BP is an energy producing company (not only oil)
1. don't put "all eggs in one basket"
2. Risk management as a societal conversation  
2. scenario planning- What if analysis
1. must be updated
3. political climate, PR climate
1. ability to obtain permits
4. connection made with a company's symbol
1. negative implications when things go wrong
2. limited potential positive impact
5. Opportunity to pursue alternative energy sources
6. Opportunity to learn from the experience
1. Would you work for BP at this potential time of strategic change?
7. BP not same as other majors:  Rapid growth led to safety oversights