Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market
After the collapse of world oil prices during the late 1990s, Cheniere began shifting its business focus away from upstream exploration and toward LNG regasification to take advantage of a projected decline in domestic natural gas production and the natural gas supply deficit that was expected in the US over the next decade. Thanks to fracking, precisely the reverse happened and Cheniere shifted from importing gas to gas export with the Sabine Pass LNG facility that came on line in 2016.
Swot Analysis of "Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market" written by Paul Tice, Ingo Walter includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lng Cheniere facing as an external strategic factors. Some of the topics covered in Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market case study are - Strategic Management Strategies, Financial management, International business, Project management, Reorganization, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, technology disruption,
supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lng Cheniere, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lng Cheniere operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market can be done for the following purposes –
1. Strategic planning using facts provided in Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market case study
2. Improving business portfolio management of Lng Cheniere
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lng Cheniere
Strengths Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lng Cheniere in Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Diverse revenue streams
– Lng Cheniere is present in almost all the verticals within the industry. This has provided firm in Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to recruit top talent
– Lng Cheniere is one of the leading recruiters in the industry. Managers in the Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Lng Cheniere
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Lng Cheniere does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Lng Cheniere digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lng Cheniere has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Analytics focus
– Lng Cheniere is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Paul Tice, Ingo Walter can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to lead change in Finance & Accounting field
– Lng Cheniere is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Lng Cheniere in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Lng Cheniere has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Finance & Accounting industry
– Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market firm has clearly differentiated products in the market place. This has enabled Lng Cheniere to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Lng Cheniere to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Lng Cheniere has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Low bargaining power of suppliers
– Suppliers of Lng Cheniere in the sector have low bargaining power. Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lng Cheniere to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Lng Cheniere has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market are -
Lack of clear differentiation of Lng Cheniere products
– To increase the profitability and margins on the products, Lng Cheniere needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Lng Cheniere needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow decision making process
– As mentioned earlier in the report, Lng Cheniere has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Lng Cheniere even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Aligning sales with marketing
– It come across in the case study Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market can leverage the sales team experience to cultivate customer relationships as Lng Cheniere is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market, it seems that the employees of Lng Cheniere don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Need for greater diversity
– Lng Cheniere has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Capital Spending Reduction
– Even during the low interest decade, Lng Cheniere has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market, in the dynamic environment Lng Cheniere has struggled to respond to the nimble upstart competition. Lng Cheniere has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Lng Cheniere supply chain. Even after few cautionary changes mentioned in the HBR case study - Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lng Cheniere vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Lng Cheniere has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Lng Cheniere has relatively successful track record of launching new products.
Opportunities Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lng Cheniere can use these opportunities to build new business models that can help the communities that Lng Cheniere operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lng Cheniere to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Lng Cheniere to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Lng Cheniere can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Lng Cheniere can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Lng Cheniere can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Lng Cheniere has opened avenues for new revenue streams for the organization in the industry. This can help Lng Cheniere to build a more holistic ecosystem as suggested in the Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market case study. Lng Cheniere can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Lng Cheniere can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Lng Cheniere can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lng Cheniere in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Lng Cheniere to increase its market reach. Lng Cheniere will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lng Cheniere can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Lng Cheniere can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Using analytics as competitive advantage
– Lng Cheniere has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lng Cheniere to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Lng Cheniere to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Lng Cheniere business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Lng Cheniere needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Lng Cheniere can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing wage structure of Lng Cheniere
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Lng Cheniere.
Regulatory challenges
– Lng Cheniere needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Lng Cheniere will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lng Cheniere in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Lng Cheniere.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market, Lng Cheniere may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Lng Cheniere can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Lng Cheniere in the Finance & Accounting sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Lng Cheniere can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Cheniere's LNG Liquefaction Strategy: Pushing the Boundaries of the Project Finance Debt Market is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Lng Cheniere needs to make to build a sustainable competitive advantage.
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