THE NEED TO EXAMINE THE EXTERNAL ENvIRONMENT: DISASTER IN THE GULF ONE YEAR LATER The Gulf Coast oil spill disaster not only resulted in oil and tar balls washing up on local beaches but contributed to the evaporation of the wedding business on the beach. In one family business, 85 percent of the business and $90,000 cash were lost while they only received $20,000 in emergency payments. A year later, resentful wedding business owners are still living day to day. They contend that British Petroleum (BP), which owned the Deep water Horizon oil rig where the explosion and subsequent leak occurred, has not fulfilled its obligations to them and their true losses won't ever be recovered. With government intervention, the $20 billion fund established by BP has only paid out $3.8 billion. Government attorney, Kenneth Feinberg, emphasizes that 200,000 claimants have been compensated in nine months.
Be prepared to discuss the following concepts and questions in class:
Concepts
¦ The external environment
¦ External environmental analysis
¦ Five forces of competition
¦ Strategic groups
¦ Competitor analysis
How to analyze the external environment, which is critical for a firm to remain competitive in its market. Answer all five questions.
Questions
1. What external environment (general, industry, and competi- tive) segments do you think BP considered or didn't consider prior to their drilling off the Gulf Coast? What should the wed- ding business owners now consider in their external environ- ment?
2. How should BP have handled an external environmental anal- ysis and what environmental changes and trends (opportuni- ties and threats) might they have discovered?
3. Analyze BP using the five forces of competition model to determine the industry's current attractiveness in terms of profit potential.
4. Who might be in BP's strategic group and why?
5. What would a competitor of BP now discover about them in a competitor analysis?