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Yesterday Darden’s first year Strategic Thinking and Action course discussed the case BP-Beyond Petroleum, written in 2010 after the Deepwater Horizon explosion that tragically killed 11 people and led to the largest oil spill1 in the U.S.

BP Case Image

Professors Mike Lenox, Jared Harris, Jeanne Liedtka and Scott Snell, invited students to consider several questions for present-day BP, including:

1. Is renewable energy an attractive market segment for the company?

2. Does it have the internal capabilities to succeed in this market?

What struck me about the discussion was how much it was enriched by the energy-related prior work experience of the students. Points were made by those who had:

1. experienced the dynamics of business-NGO partnerships

2. been involved in financing an ethanol plant

3. covered utility companies as an analyst

4. analyzed a debt deal for a coal plant

5. worked for a solar company for five years

Each of their perspectives helped clarify the challenges and options at hand for BP.

In addition to deploying strategy tools such as Porter’s Five Forces framework and SWOT Analysis, the learning also centered upon conducting a stakeholder2 assessment for BP, i.e. Who are the company’s stakeholders and how would they define success for the company? How might they view investment decisions differently? Stakeholder groups include stockholders for sure, but also employees, the local community, government, media, NGOs and customers. Each has a different “stake” in the game of business and, thus, pressures/motivates business leaders accordingly. The savvy and successful leaders in turn are skilled at addressing the interests of all of these different groups in order to achieve long-term returns for the business – and also for society.

StrategistsChallenge

Ultimately the students’ recommendations for BP’s leadership team were varied, but they agreed on one thing: there is no easy path to profit in the renewable energy sector for BP or any company. However, the leaders that are in touch with the interests of all stakeholders, as well as clear on the strengths of, and threats to their companies, are best positioned to create value in the long run.

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1 For more about BP after the oil spill, check out Darden’s sustainability podcast series: The Darden GreenPod 10: Business Strategy and Crisis Leadership at BP.

2 For leading thinking on stakeholder engagement, read the 2010 book, Stakeholder Theory: The State of the Art, by Darden professors R. Edward Freeman, Andrew Wicks, Bidhan Parmar, and co-authors Jeffrey Harrison and Simone de Colle.

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