BP is an energy corporation that focuses mainly on petroleum Essay Example

distinguished BP from other oil companies and earned them the top spot on Fortune magazine's list of responsible companies. They also established a subsidiary called BP Solar International that focused on solar energy. The success of this subsidiary resulted in a $1.8 billion investment in 2005 for BP Alternative Energy, which concentrated on hydrogen, solar, and wind power generation.

BP is headquartered in London, United Kingdom and ranks as the third-largest energy company and fourth-largest overall company globally based on revenue. As a multinational oil and gas company involved in exploration, production, refining, distribution, petrochemicals as well as power and trading sectors; they operate in over 80 countries. They produce approximately 3.8 million barrels of oil per day and have numerous service stations worldwide.

Their largest division is BP America located in Houston,Texas - it holds the title of being the largest producer of oil and gas in the United States.As of December 31, 2009,BP had proven reserves of 18.3 billion barrels of oil equivalent.The company's name, "BP," comes from its former legal name - British PetroleumDespite its mixed track record in corporate social responsibility, BP is listed on both the London Stock Exchange and New York Stock Exchange as part of the FTSE 100 index. The current solar cell industry varies across different market sectors, with hindered progress within the United States due to a lackluster response from national authorities. However, states like California and Arizona are making efforts to encourage solar panel installations through incentives such as tax credits and property tax exemptions. Nevertheless, the U.S. market remains fragmented overall, with numerous small independent companies but few major domestic players. This limited market share in

solar energy leads to a lack of support for new companies and hesitance from successful international firms to enter due to unfamiliarity with operations and uncertainty over government requirements, resulting in high transportation costs and duties. However, BP already has a presence in the U.S. crude oil market which gives it an opportunity to establish a monopoly in the localized solar industry. On the other hand, the German market is thriving and rapidly expanding.The solar energy sector is experiencing growth and support from the German government through the Renewable Energy Act (EEG), which creates opportunities for new entrants. Germany also hosts Europe's largest trade fair for solar technology, showcasing innovations and instilling confidence in the industry. This market offers high potential for product differentiation, catering to various consumer needs with large-scale systems for generating electricity at homes and smaller daily consumer devices utilizing solar power.

While there are major players in the solar market, no company has enough market share or industry capacity to eliminate smaller competitors through economies of scale. However, BP Solar can leverage its size as a large European-based business to discourage new entrants. On the other hand, the Japanese market is nearing saturation point, discouraging potential competitors.

Despite this, there is increasing demand for solar products each year as more residential homes install panels. This makes it a profitable industry attracting many companies. Sharp and Kyocera Solar dominate the market, with Sharp holding a significant market share.

However, all sectors of the market face an issue with silicon (Si) shortage – a crucial component in producing solar energy.The global scarcity of ultrapure polysilicon worsens this issue, as the consumer base for solar energy technology

is small and not well understood. This leads to limited buyer and supplier bargaining power, resulting in 24 publicly traded solar companies being sold out in 2005 alone. Currently, purchasers have limited control over bargaining power due to product scarcity. However, as companies expand their manufacturing capabilities and aim for mass production to reduce costs, this situation is expected to change. Conversely, suppliers for solar companies hold greater bargaining power compared to buyers. Despite supply shortages causing delays of up to six months for components for large companies, the solar industry is witnessing a rapid increase in new entrants. With rising housing demand contributing to a shortage of silicon chips and resources leading to higher prices, it becomes crucial for companies like BP to focus on researching more efficient use of silicon resources in order to reduce costs and negotiate better with suppliers. Traditional electricity generated from coal and natural gas currently serves as the main alternative to solar energy but poses significant risks as the primary energy source for households. Customers are reluctant to switch because traditional electricity remains cheaper than solar and wind energy options.Ongoing improvements and research efforts by companies are gradually reducing the cost per watt of solar energy by 5% annually. This will eventually lead to solar energy costs being comparable to those of traditional electricity. The diminishing supply of natural gas and coal has caused increased prices, resulting in greater demand for alternative energy sources like solar energy.

It's important to note that although solar energy is not the only alternative for generating electricity, according to the Energy Information Administration, it accounts for just 0.2% of renewable electricity production in

the United States. The largest sector in the country's renewable energy industry is hydropower, which constitutes 75.2% of total production. However, hydropower has its drawbacks such as negative impacts on water quality and wildlife habitats.

To address these issues, utilizing solar energy technology can be one of the cleanest sources of renewable energy available. Major players in the solar industry include Sharp, Kyocera Solar, Shell Solar, and BP. Due to the already expensive nature of solar energy production, there isn't significant cost competition among these companies.

The industry would be harmed if prices are undersold because the technology is well understood and consumer demand is not enough to offset cost reductions. Furthermore, major players in different geographical markets have limited foreign establishments, which further reduces competition.Price competition can occur through mass production and increased popularity, which is one of the primary challenges faced by solar energy technology. In order to overcome this obstacle, marketing arrangements that allow for the use of household appliances powered by solar cells can achieve synergies. Collaboration with other electronic corporations like Sony can also be pursued by the solar company to create devices utilizing solar cells. Additionally, integrating services with products presents another potential synergy.

Access to expert assistance is crucial for the installation and maintenance of solar cells due to its status as a new technology requiring consumer guidance. BP has already incorporated service into their offerings by providing installation and free check-ups with every purchase of their solar panels. A significant advantage possessed by BP is its position as a large corporation with substantial financial resources, supporting research in alternative energy.

In 2005, BP generated $22.341 billion in revenues, giving them an

edge over smaller expert companies in terms of financial support for investing significantly in alternative energy technology development. Recently, BP formed a strategic joint venture to enter China's solar market and establish local manufacturing capabilities. With 30 years of experience, BP is acquiring the necessary technology and knowledge to become a major player in this field.In 2004, BP Solar achieved profitability due to advancements in their Energy Max solar electric tracking systems technology. This innovative system enhances cell performance by tracking the sun's movement from east to west, offering customers great potential for utilizing solar technology. BP has supplied solar cells to various companies and organizations, further promoting the use of solar energy. Notably, they provided solar panels to Whole Foods Inc.'s shop in Edgewater, NJ in 2004 - making it the first retail store in Northeastern United States powered by solar energy. They have also supplied panels for the United States Marine Corps Air-Ground Combat Centre as part of their involvement in diverse projects supporting the adoption of solar power. Additionally, they have implemented programs such as the BP Solar Neighbours Program which provides a low-income family in South Central Los Angeles with a solar system when a celebrity installs BP solar panels in their own home. The BP Solar Connection Program is an initiative aimed at raising awareness of clean alternative energy in schools. Furthermore, BP Solar donated panels to ABC's "Extreme Makeover: Home Edition".Despite its efforts to re-brand itself as an environmentally friendly oil company, BP's reputation has suffered due to its association with the 2006 major pipeline rupture in Alaska that caused significant oil spillage into the Arctic Marine. This incident,

along with others, has led environmentalists to accuse BP of greenwashing - creating a positive public image for practices that actually harm the environment. Despite being involved in solar energy, BP is still primarily associated with oil by most people and lacks a competitive advantage in the solar energy market compared to their crude oil business. Finding synergies between their oil and solar divisions proves challenging for BP. However, thanks to their income from oil, they have the opportunity to expand in the solar energy sector. They have partnered with Home Depot for the BP Solar Home Solutions program and started selling photovoltaic cells and equipment at their stores in California, New Jersey, and Long Island, New York. This program offers specialized installation services as well as a free six-month medical examination. Customers who purchase these solar systems are also protected by warranties provided by BP. Additionally, BP can sell its solar products to retailers like Lowe's and Ace while benefiting from government initiatives that offer tax breaks for choosing solar energy.BP can advocate for regulations that mandate solar energy tools in new buildings, a move that would benefit its competitors but still prove advantageous for BP Solar. Additionally, BP can utilize solar energy to power its offices, plants, and gas stations, thus creating synergies between its oil business and its solar business. If BP Solar enhances the cost-efficiency of photovoltaic cells, it has the potential to establish connections within the company. Numerous companies specialize in different energy sources like photovoltaic solar cells, including BP. Nevertheless, due to extensive diversification into various products such as oil, future challenges may arise for BP. Shell is another

major player in the oil industry that has ventured into the solar energy market and ranks among the top four leaders alongside BP Solar, Sharp, and Kyocera. Given their strong ties to petroleum, BP poses formidable competition in the solar market where any synergies formed by them could easily be replicated by other companies operating in this sector. KSI and Sharp Solar are expected to be highly competitive due to their nearby electrical divisions; they possess an advantage over competitors across various markets including solar and BP through their electronics divisions.Customers who choose Sharp's solar systems are more likely to also purchase electronics from Sharp in order to receive a discount for being "fully integrated." Additionally, families already using Sharp electronics would find it more cost-effective to buy a solar system from Sharp Solar rather than other companies because buying a complete set from one manufacturer is cheaper than acquiring individual components from different manufacturers or suppliers. Both KSI and Sharp Solar target different markets. KSI stands out with its construction Integrated Photovoltaic that incorporates PV facilities into architectural designs, creating a unique market for the company. On the other hand, Sharp Solar is developing crystalline PV that can function as windows as well, providing customers with more options. Unlike industrial-focused companies, Sharp Solar primarily focuses on residential customers, giving households more freedom in their choices. In the solar industry, cost and performance take priority over aesthetic beauty when it comes to solar facilities. This differentiation in target markets helps reduce competition between KSI and Sharp Solar. BP is facing intense competition in the solar market as both their residential and commercial facilities are competing

against each other. To address this issue, one solution could be to establish a distinct market for BP.
Competition in the solar PV market encompasses both technology and quality, making any significant technological advancements crucial for gaining a competitive advantage. BP must establish and protect their unique position in the market due to fierce competition from rivals.