The following extract is taken from an essay produced on the topic of Marketing
BP and the extent of its market orientation
BP demonstrates its market orientation from the degree of its allocation of funding to research and innovation over alternative forms of energy (BP Annual Report, 2008). Despite the fact that reliance over gas and coil continue to remain the primary sources of energy, BP realises that it is in a state of huge transition (BP Annual Report, 2008). As Weyer, (2008) argues BP’s competitiveness can only depend on its capability to exploit new forms of energy by means of maintaining its knowledge refinery capabilities in a way that it is difficult to replicate by its competitors. In an interview with Tony Hayward (published in BP’s Annual Report 2008), the chief executive argues for how BP will find ways of developing market strategies that will exploit alternative forms of energy (BP Annual Report, 2008).
Hayward does not specify the more particular research and innovation practices required to equip the company with the appropriate knowledge resources. General reference is made only to the effort to address the development of alternative energy needs whilst still relying on the more traditional forms of energy (oil, fossil fuels). Haywards argues that the company has “invested $1.4 billion in alternative forms of energy such as wind, solar, biofuels and carbon capture and storage (CCS). Looking ahead, on the issue of greenhouse gas (GHG) emissions, we believe legislation is required to ensure that a cost of carbon is included in the price of everything. This would enable companies such as BP to make even greater investments in low-carbon energy” (BP Annual Report, 2008).
Part of the corporate challenge BP is facing concerns its capability in marketing the development of alternative energy sources to utility products. Translating the new energy opportunities into the use of energy for household, transport and other appliances, requires a much more diverge knowledge of the market and the potential consumer needs which BP currently seems to lack. This essay argues that BP is market oriented to the extent that it recognises that fast changing environmental trends with the need to identify alternative forms of energy. However, BP is not market oriented to the extent that knows how to make use of its current and developing resources for taking advantage of the market opportunities. Namely, it does not have a specific strategy for what kind of energy outputs it will produce and how such forms of energy are going to be used, for example, within the machinery, transportation and household appliances.