Essay About Bp Route And Market Projectintroduction

Project Management
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Manchester Business School                   Project Management A2                   Yongfu Xu (8147166)Project:  BP Route-To-Market ProjectIntroduction and contextChina Automotive Lubricants MarketChina is the world’s fastest growing economy with a forecast GDP growth around 7% per annum through to 2018. Due to the continued growth in private car ownership, lubricant demand is forecasted to grow rapidly at 5% CAGR and gross margin at an even higher pace, circa 10% per year. China is now the largest automotive lubricants market in the world today offering a total demand opportunity of nearly three billion liters and a gross margin pool of 1000 million USD. China Automotive Customer EvolutionMore and more capital and funds are flowing into this attractive market, which resulted in more and more customer merger & acquisition. Consolidated customers are getting larger and more demanding. Meanwhile customers are getting smarter; there is less “habitual” purchasing with greater awareness of supply options. Customers’ purchase process is getting more complicated and only best distributors seem to be able to satisfy customers’ needs. So qualified distributors and RTM strategy is very critical for the success of automotive business in China.1.3 International Automotive Lubricants Players in China & Route-To-Market (RTM)There are three key international automotive lubricants players in the China market while Shell has exceeded Mobil as market leader and one of the key success factors is that Shell has successfully made great efforts to refresh their route-to-market (RTM) strategy by optimizing their distribution network. BP automotive lubricants business also grows very quickly and they are No.3 player after Mobil. It is quite similar that more than 80% BP business are selling through their distributors. There are about 300 BP distributors but the overall capability (in terms of financial, business development and management, business size) is not competitive versus Shell and Mobil.BP 2014-2018 China Strategy & RTM Project 2014-2018 BP China Strategy has been signed off. BP’s RTM is one of the critical successful factor for achieving their sustainable profitable growth in China. PurposeWith the enormous, huge and attractive China market opportunity, larger and smarter customer’s evolution and more competitive competitors’ distribution network, the purpose of BP RTM project is taking a full review of the existing BP distributor network to establish an excellent network to meet contemporary customers’ needs, compete with competitors, and win in China. Problem to be overcome & OpportunitiesProblem to overcome:China customers are getting larger and smarter, BP existing distributors’ abilities can’t meet contemporary requirements to serve and meet current customers’ needs;BP existing distributors’ scale and capabilities are not competitive comparing with key competitors of Shell and Mobil;BP current route-to-market distribution network more naturally spread across China, which has no focus and prioritizes.Opportunities:China automotive market grows quickly, automotive lubricant demand forecast to grow rapidly at 5% CAGR, and gross margin at an even higher pace, circa 10% p.a. China is now the largest automotive lubricants market in the world today offering a total demand opportunity of nearly three billion liters and a gross margin pool of 1000 million USD.Right route-to-market distribution network and right partner of skilled distributors plays a critical role for BP’s sustainable growth in the next five years.OutcomeTo establish a world class BP distribution network in China with the right focus, capabilities and offers to deliver an incremental $40m of gross margin by 2018.Benefits and RisksThe benefits of achieving this project:BP can establish more optimized distribution network with right focus and prioritizeBP’s distributors can be more strong and competitive in the market with better capabilities to acquire and serve customers and finally support BP win in China profitable and sustainablyRisks of not implementing this project may include:Without this project, larger and smarter customer will gradually dissatisfied BP existing distributors’ offer and serve and they will lostBP will lose market share in growth China market and especially in key cities with existing distribution network.Logical diagramThe logical diagram of Figure 1 defines what has to be in place to deliver the project outcome. The logical diagram identified that market research and distributor landscaping was conducted by end October 2013. Then project team worked out the BP RTM participation and distributor offer options before November 20 and BP China management team evaluated and selected the option before end of November and communicated with sales team during December of 2013 and implemented the plan at beginning of 2014.Figure 1． BP Route-to-Market Project Logical DiagramProject/Marketing Mgr.[pic 1]Project Manager                      Project/Sales Manager[pic 2]Project/Distributor Mgr.                      Management Team                                               Project Manager                       Project/Sales ManagerLegal ManagerDetailed programmeThe logical diagram has been converted into a critical path programmme (CP) of Figure 2 (Figure 2 is attached in separate file in Microsoft Project of CP version).This shows a 72 days period for the project. The RTM options of participation and competitive distributor offer is the key milestone, giving a key date of December 31 2013.