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Case 8 Lecture Notes
BP Struggles to Repair Its Tarnished Reputation
Case 8 BP Struggles to Repair Its Tarnished Reputation*
Synopsis: In the wake of the Deepwater Horizon disaster in the Gulf of Mexico, BP faces a
monumental task in reestablishing its sustainability-based branding strategy and
repairing its tarnished reputation. This case examines the history of BP, its efforts
to rebrand the company to focus on sustainability, and its environmental and
ethical lapses preceding the Deepwater Horizon accident. BP had realized the
need to become more environmentally responsible and was the first energy
company to recognize the presence of global warming and launch initiatives to
produce cleaner forms of energy. Unfortunately, the company’s questionable
safety and environmental record effectively undermined its branding initiatives.
To move beyond the Gulf oil spill, BP must find ways to repair its damaged
reputation through a commitment to integrity and an authentic concern for both
the environment and the company’s many stakeholders.
Themes: Ethics and social responsibility, sustainability, corporate branding and
positioning, corporate affairs, stakeholder engagement, strategic thrust
Case Summary
BP has experienced a lot of ups and downs over its hundred-year history—from nearly
bankrupting its founder William D’Arcy to becoming one of the world’s largest energy
companies. BP has also experienced its fair share of controversies regarding business practices,
environmental damage, hazards to workers, and greenhouse gases. For some time, BP has
attempted to turn a page in its history book toward a more environmentally friendly future
through investments in renewable energy and ethics initiatives. British Petroleum changed its
name to BP and then tried to rebrand itself as Beyond Petroleum. This rebranding was a signal to
stakeholders that it was focused on sustainability and the need to move beyond nonrenewable
energy sources.
Changes in demand patterns for energy products require that firms respond to the value desired
by a target market. BP was trying to position its products as not just commodities, but as
differentiated products that support sustainability and other social responsibility concerns. One of
the key concerns when such claims are made involves maintaining a product that is authentic and
trustworthy. By using the Beyond Petroleum positioning, BP presented itself as being committed
to investing in renewable energy, which has gained a great deal of popularity among consumers
and other members of society concerned about the planet’s future. A marketing strategy has to be
built on a solid foundation of supportable claims about the true nature of the product. However,
BP’s efforts backfired on April 20, 2010 when the explosion of the Deepwater Horizon oil rig,
operated under the oversight of BP, created one of the greatest offshore oil disasters in history.
Case 8 Lecture Notes
BP Struggles to Repair Its Tarnished Reputation
This case provides an opportunity to observe the past efforts of BP to improve its image, along
with how these efforts were eclipsed by the oil spill. Certain disasters resulting from company
negligence are detailed in this analysis, and although BP made efforts to establish itself as a
socially responsible company, the recent oil spill crisis undid many of BP’s marketing initiatives.
While BP has experienced other disasters related to its social responsibility, before the 2010 oil
spill, BP was garnering a better reputation as a socially responsible oil company. It became the
first oil company to recognize the presence of global warming and to launch initiatives to
produce cleaner forms of energy. This one disaster has tainted BP’s brand image, causing the
company to lose billions of dollars and the reputation it worked so hard to build.
Teaching Overview
In teaching this case, a major theme has to be BP’s rebranding efforts and how the company
must strive to repair its damaged reputation in the wake of the Deepwater Horizon incident.
While BP is not the only major energy company to suffer a reputational crisis, BP did realize
more quickly than other companies that being perceived as an environmentally concerned energy
company is far better for business than being seen as a big, dirty oil company. In 2005, BP was
the first company in its industry to publicly state that climate change is real, and that it presents a
dilemma for oil companies. Around the same time BP also launched its Alternative Energy
division, which is devoted to renewable energy sources. Another important element in BP’s
rebranding was its Code of Conduct—titled “Our Commitment to Integrity”—which gives legal
expectations in five key areas: (1) health, safety, security, and the environment, (2) employees,
(3) business partners, (4) government and communities, and (5) company assets and financial
integrity.
Any headway that BP was making in its rebranding efforts came to an abrupt end on April 20,
2010. The findings from the resulting investigation revealed that BP cut short procedures and
quality testing of the drilling equipment and pipes. A government panel investigating the crisis
also concluded that BP, Transocean, and Halliburton—some of the major firms involved in the
drilling—failed to adequately consider risks or communicate with one another on major
decisions involving the well.
SWOT Analysis
Internal Strengths
• Strong commitment to improving its corporate reputation
Internal Weaknesses
• Weak risk management strategies
Case 8 Lecture Notes
BP Struggles to Repair Its Tarnished Reputation
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• Past ethical violations still tarnish BP’s image
• Current and new efforts to improve image may seem somewhat disingenuous
• The company earns an enormous profit each year, causing some to think BP is greedy
External Opportunities
• Strong market demand for renewable energy sources
External Threats
• Competitors are developing strong renewable energy programs of their own
Problem/Decision Statement
The damage to BP’s Beyond Petroleum marketing strategy is not easy to repair. The
development of trust is based on a firm’s commitment to integrity, transparency, and a concern
for all stakeholders. Now, BP needs to develop a marketing strategy that begins to repair the
damage caused by the Deepwater Horizon incident. BP also needs to develop a strategy that is
seen as authentic in the face of the socially responsible corporation that it claims to be.
Strategy Alternatives/Strategy Recommendations
Students will be hard pressed to develop strategic initiatives that are better than those currently
used by BP. Many students will argue that the company needs to do more of the same, such as
doubling its commitment to renewable energy. Some students will suggest that BP drop certain
Implementation Issues
Without a doubt, the most critical implementation issue is the continuing commitment of BP’s
leadership team. The current team understands the issues and the need to improve the company’s
Case 8 Lecture Notes
BP Struggles to Repair Its Tarnished Reputation
Teaching Questions
1. Analyze BP’s efforts to improve sustainability and its reputation prior to the Deepwater
Horizon disaster. Was the company on the right track? Why or why not?
Sustainability can be a tricky concept to nail down, with every individual and corporation
supplying a meaning that best serves their purpose. A good working definition of
2. Because most BP products can be viewed as commodities, do you think consumers will
avoid purchasing from BP because of its track record and the Deepwater Horizon
disaster? Why or why not?
3. How can BP prove to its stakeholders that it is serious about social responsibility,
sustainability, and ethics, and that its efforts are not just a public relations ploy? What
strategic issues would you focus on in trying to repair the company's reputation?
Although actions speak much louder than words or money, one way for BP to prove its
seriousness is to significantly increase its investment in these areas. The company
