STRATEGIC

ANALYSIS - BPCL
Submitted To:
Prof. Muqbil Burhan

Presented By:
GROUP 7
Anupam Sharma (221030)
Bhavnik Mittal (221037)
Divya Sharma (221043)
Drashti Desai (221044)
Jodhbir Singh (221059)

ABOUT THE COMPANY

Navratna Status,
in Fortune Global 500
rankings, 2013.

Integrated oil and gas

company (downstream)
engaged in rening of
crude oil and marketing
of petroleum products.

Also diversied into

production and
marketing of
petrochemical
feedstock.

Also entered the

upstream sector
through a wholly owned
subsidiary Bharat Petro
Resources Ltd in
October 2006.

229th

BPCL also has 3

unlisted Indian
subsidiaries, four
foreign subsidiaries and
16 JVs.

INCEPTION
Incorporated in 1886 as the Burmah Oil Company. An
important player in petroleum refining
In 1928, Asiatic Petroleum (India) joined hands with
Burmah Oil Company leading to the formation of
Burmah-Shell Oil Storage and Distributing Company
of India Limited.
Burmah Shell began its operations with import and
marketing of Kerosene followed by Petrol

As a true pioneer would, the company introduced LPG

as a cooking fuel to the Indian home in the mid-1950s.

An agreement to build a modern refinery at

Trombay, Bombay was signed between the
Burmah Shell group of companies and the
Government of India on 15th December 1951.

Burmah Shell Refineries Limited was

incorporated as a private limited company
under the Indian Companies Act on 3rd
November 1952
On 24th January 1976, the Burmah Shell Group
of Companies was taken over by the
Government of India to form Bharat Refineries
Limited. On 1st August 1977, it was renamed
Bharat Petroleum Corporation Limited

STRATEGIC BUSINESS UNITS

(SBU)

Refineries
{2}

Retail
{82}

Industrial
and
Commercial

Gas

Lubricants
{4}

Aviation
{34}

The company has business presence across India

SBUs help market various types of products
through two marketing channels: Some of the
nished products are sold through
retailers/distributors while others are sold directly
to consumers

BROAD STRATEGIC
INITIATIVES
Customer-focused approach.
Build on product sourcing capabilities.
Brand building.
Strengthening Retail Network-security and development.
Building international trading skills.
Investments in R&D and technology.

Adopt an integrated on-line ERP solution.

Focused initiatives in LNG, Power, Petrochemicals and E&P.
Development of clean and renewable energy e.g. Wind Power,
Solar Power and Bio - diesel.

MARKETING STRATEGY
Fuelling
Industries

To cater to Industries needs of fuels and

other petrochemicals, Bharat
Petroleums Industrial and Commercial
Business Unit was formed. Currently I&C
SBU caters to approx. 8000 industrial
customers in India.

Fuelling
Home

Bharatgas from Bharat Petroleum has

dominated the LP Gas market in India for
over three decades. Present in over 25
million homes in India.

Fuelling
Skies

BPCL has completed more than 75 years

of Aviation Service. BPCL-Aviation
Service is present at all the major
gateways and other airports in the
country

VARIOUS ACTIVITIES INITIATED BY

BPCL TO MEET THE FUTURE
CHALLENGES
First in the industry in implementing a comprehensive ERP solution SAP R-3 led reengineering exercise.
Substantial benefits: cost control, faster response to and follow up on
customers, improved information access and management throughout the
organisation etc..

BPCL has a strong Retail presence through nationwide network.

Shifted its focus to retail: convenience goods, banking, and communication.

Retail automation: enables transparency in terms of exact quantity of fuel
dispensed, automated receipt and better payment options through smartcard /
credit / debit cards.
Developed customer-centric business solutions to provide superior customer
enablement.

BPCL has launched 'In & Out eTraveller', a one stop facility for all
travel and hospitality needs of the customers.

BPCL LPG business has launched 'Beyond LPG' initiative

a value added service to our Bharatgas customers.

Aviation market: BPCL & ST Airport Services Pvt. Ltd Joint

Venture

The JV Company has been provided the SPRH (Service

Provider Right Holder) status for Into-Plane Services at
Bengaluru International Airport and Delhi Terminal 3 airport.
Strategy is aligned with the Project Dream Plan with the Goal of
becoming one million barrels per day company, triple profits, and
undertake capital spend in excess of INR 5,000 billion by 2015.

HPCL v/s BPCL

HPCL
HPCL was formed with the merger of
ESSO and Lube India
Hindustan Petroleum Corporation
Ltd (HPCL)was incorporated as Standard
Vacuum Refining Company of India Ltd in
1952, and later became the ESSO Standard
Refining Company of India Ltd in 1962.

BPCL
It is the 3rd largest oil
company in India owned by
the Government of India.
Employees: 12400

Caltex Oil Refining India Ltd and

Kosan Gas Company were merged with
the company in1976 and 1979,
respectively.

Revenue (2005): $17.613

billion
HPCL, a Navratna, is involved in refining
and marketing petroleum products

AFTER SALES SERVICE

HPCL

BPCL

For industrial products

they take feedback of
huge customer and
carefully look about
the need

No standard feedback
mechanism ,feedback
is taken only from
large customers

For retail products

there is no after sales
services, all the
services area available
on petroleum pump

Special petro-card for

logistics companies is
provided.

SCM
HPCL

BPCL

Inbound as well as
outbound logistics are
outsourced.

Inbound logistics is
outsourced.
Outbound logistics is
50%outsourced and 50%
company owned

ForIndustrial
customers have an
option of using their
vehicles or companys
vehicle.

Any customer dont have

any option to use their
vehicle.

DEALER APPOINTMENT
HPCL

BPCL

They 1st decide the

place and then give
advertisement.

Same process is followed by

BPCL

If any person is willing

to open a retail outlet
in his locality then he
can apply in HPCL

Only company decides where t

o open retail outlet

STRENGTH
1.One of India's largest state
owned oil and gas company
2.Has brand presence
3.Refining and retailing of
petroleum

WEAKNESS
1.Legal issues
2.Employee management

SWOT
OPPURTUNITIES
1.Increasing fuel/oil prices
2.Increasing natural gas
market
3.More oil well discoveries
4.Expand export market

THREATS
1.Government regulations
2.High Competition

STRATEGIC RISKS &

OPPORTUNITIES
The supply of crude oil was threatened at times due to geo political factors like the
domestic situation in several countries of the Arab world and sanctions against Iran by
the USA and the EU

The demand for petroleum products in India grew at a rate of 4.9% (based on the
provisional data released by the Petroleum Planning and Analysis Cell (PPAC) of the
Ministry of Petroleum & Natural Gas).

The Government of India also instituted important changes impacting under-recoveries

on high speed diesel (HSD) for the public sector companies in India, which, beginning
January 2013, were empowered to determine the retail selling prices of Motor Spirit (MS).
In case of HSD, they have been given the freedom to hike the selling price every month
by a small amount of around 50 paisa a liter. Also the selling prices of HSD for bulk
consumers have been fully deregulated. These changes however, could also impact
demand and lead to greater competition from private sector players in the future.

Implemented other key changes impacting the LPG business, with a view to
limit the subsidy burden. A cap has been placed on the number of subsidised
LPG cylinder that every LPG consumer can get in a nancial Year.
The demand for petroleum products in the country depends signicantly on
the economic growth in the country. The
country's economic growth could be aected which in turn can lead to
reduction in the energy demand and in particular for oil and gas.

The price of crude oil in the international market remains volatile. Although oil
prices have reduced in the
international markets, the weakening rupee has eroded a major part of the
gains. In this situation, any slowdown in key

sectors of the economy can have a major impact on companies like BPCL.

ECONOMIC PERFORMANCE
In FY 2012-13, BPCL's consolidated revenue
increased by about 14%. Key factors in
revenue growth were the company's increased
crude through-put, which was 28.55 MMT in FY
2012-13 and increase in market sales, which
have grown about 6.96% from the previous
year. The consolidated revenues exceeded
INR 250,500 crores on the back of sale of 33.3
Million Metric Tons (MMT) of rened petroleum
products and gas.

BPCLS GROWTH
STRATEGY
BPCL follows a Economic Growth
Model which it has successfully
implemented and perfected over
the years

The following are the few steps

taken by BPCL to improve its
competitiveness and competency:

To capture a competitive edge over

its competitors - The company
launched Pure For Sure and In
and Out Outlets.

BPCLS RETAIL MARKETING

STRATEGY
Oil and Natural
Gas (LPG)
were
deregulated in
2002

As a result,
BPCL
recorded a
sales growth
of 2.7% as
against the
industry
average of
1.6%

BPCL was one

of the first
companies to
launch retail
marketing
operations in
the country

TARGETING THE RURAL

CUSTOMERS

In case of LPG,
BPCL saw
huge
opportunity in
the rising
income levels
of the rural
population.

BPCL found
out that
increasing
awareness on
health, hygiene
and
environment
augur well for
penetration in
rural LPG
markets

In order to
service rural
customers,
BPCL has
introduced 20
rural LPG
marketing
vehicles which
offer filling
facility near the
customer
location, thus
saving the
hassle of
bringing back
the five kg
cylinders to
the bottling
plants.

The five-kg
cylinders
would reduce
the cash outgo
at one time
from rural
customers and
help in higher
penetration in
low income
groups.

TARGETING INDUSTRIAL
CONSUMERS
For industrial customers,the company has been focussing on
the B2B initiatives.
The latest to come is the vehicle tracking system operated
through swipe cards.
The vehicles are tracked through data read at 200 plus swipe card
stations located in BPCL outlets and other locations covering all
major highways throughout the country.
Going forward, BPCL will leverage new technologies to meet
enhanced customer expectations by trying to continously
innovate and manage customer relationships.

KOCHI REFINERY
With a coastal
refinery coming
under its fold, KRL
was a cog in the
growth engine of
BPCL
Its location ensures
comfortable supplies of
petrol, diesel and cooking
gas to the west and south.
By 2015, BPCLs total
refining capacity will be
nearly 40 mt with KRL right
on top, followed closely by
Mumbai and then Bina at
nine mt.
Thus, its refineries will
ensure that BPCL remains
one of the top oil suppliers
in the near future also.

DEEP-SEA EXPLORATION
INITIATIVES

With all on-shore and near shore resources

exhausted, BPCL is looking at deep sea
exploration for future sustainability.
BPCL and ONGC entered into an MOU to
enter into exploration and production (E&P)
and bid for projects together.
BPCL has earmarked Rs.1000 to 1500 crores
for this multi-billion dollar industry.

BPCLs PETROCHEMICAL JV
BPCL has partnered with Manali Petrochemicals Ltd for a polyurethane
(PU) plant in Kochi.
PU is considered as the future growth engine for BPCL.
Indias current requirements of PU is 2.5 lakh tonnes per year which
is mostly imported.
This plant will be the largest in India for a product that only two
companies all over the world have mastered - Dow Chemicals and
BASF.
The project will provide government taxes to the tune of Rs.4000
crores and generate employment of 900 directly & seven times
indirectly.
Its expected to go on stream in 2017.