SWOT Analysis / TOWS Matrix for Lakes Oil NL (Australia)
Based on various researches at Oak Spring University , Lakes Oil NL is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, geopolitical disruptions, increasing government debt because of Covid-19 spendings, increasing commodity prices,
supply chains are disrupted by pandemic , increasing energy prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Lakes Oil NL can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lakes Oil NL, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lakes Oil NL 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 Lakes Oil NL can be done for the following purposes –
1. Strategic planning of Lakes Oil NL
2. Improving business portfolio management of Lakes Oil NL
3. Assessing feasibility of the new initiative in Australia
4. Making a Oil & Gas - Integrated sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lakes Oil NL
Strengths of Lakes Oil NL | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lakes Oil NL are -
Low bargaining power of suppliers
– Suppliers of Lakes Oil NL in the Energy sector have low bargaining power. Lakes Oil NL has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lakes Oil NL to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Oil & Gas - Integrated industry
- digital transformation varies from industry to industry. For Lakes Oil NL digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lakes Oil NL 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.
Superior customer experience
– The customer experience strategy of Lakes Oil NL in Oil & Gas - Integrated industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Lakes Oil NL has one of the best training and development program in Energy industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Successful track record of launching new products
– Lakes Oil NL has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lakes Oil NL has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management in the Oil & Gas - Integrated industry
– Lakes Oil NL is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Lakes Oil NL is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Lakes Oil NL is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Lakes Oil NL emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Lakes Oil NL is one of the leading players in the Oil & Gas - Integrated industry in Australia. It is in a position to attract the best talent available in Australia. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Lakes Oil NL 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.
High brand equity
– Lakes Oil NL has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lakes Oil NL to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Lakes Oil NL is one of the most innovative firm in Oil & Gas - Integrated sector.
Highly skilled collaborators
– Lakes Oil NL has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Oil & Gas - Integrated industry. Secondly the value chain collaborators of Lakes Oil NL have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Lakes Oil NL | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lakes Oil NL are -
Slow to strategic competitive environment developments
– As Lakes Oil NL is one of the leading players in the Oil & Gas - Integrated industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Oil & Gas - Integrated industry in last five years.
High dependence on Lakes Oil NL ‘s star products
– The top 2 products and services of Lakes Oil NL still accounts for major business revenue. This dependence on star products in Oil & Gas - Integrated industry has resulted into insufficient focus on developing new products, even though Lakes Oil NL has relatively successful track record of launching new products.
Lack of clear differentiation of Lakes Oil NL products
– To increase the profitability and margins on the products, Lakes Oil NL needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Lakes Oil NL has high operating costs in the Oil & Gas - Integrated industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lakes Oil NL lucrative customers.
Interest costs
– Compare to the competition, Lakes Oil NL has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners in Oil & Gas - Integrated industry
– because of the regulatory requirements in Australia, Lakes Oil NL is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Oil & Gas - Integrated industry.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lakes Oil NL is slow explore the new channels of communication. These new channels of communication can help Lakes Oil NL to provide better information regarding Oil & Gas - Integrated products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Lakes Oil NL has a high cash cycle compare to other players in the Oil & Gas - Integrated industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Lakes Oil NL 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 Oil & Gas - Integrated industry using digital technology.
Products dominated business model
– Even though Lakes Oil NL has some of the most successful models in the Oil & Gas - Integrated industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Lakes Oil NL should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Lakes Oil NL 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.
Lakes Oil NL Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Lakes Oil NL are -
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. Lakes Oil NL can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lakes Oil NL in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Oil & Gas - Integrated industry, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Lakes Oil NL 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.
Developing new processes and practices
– Lakes Oil NL can develop new processes and procedures in Oil & Gas - Integrated 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Oil & Gas - Integrated industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lakes Oil NL 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. Lakes Oil NL 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.
Loyalty marketing
– Lakes Oil NL has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lakes Oil NL can use these opportunities to build new business models that can help the communities that Lakes Oil NL operates in. Secondly it can use opportunities from government spending in Oil & Gas - Integrated sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lakes Oil NL can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Leveraging digital technologies
– Lakes Oil NL 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.
Buying journey improvements
– Lakes Oil NL can improve the customer journey of consumers in the Oil & Gas - Integrated industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lakes Oil NL 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 Lakes Oil NL to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Lakes Oil NL has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Oil & Gas - Integrated sector. This continuous investment in analytics has enabled Lakes Oil NL to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lakes Oil NL to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Lakes Oil NL to increase its market reach. Lakes Oil NL 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.
Threats Lakes Oil NL External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Lakes Oil NL are -
Environmental challenges
– Lakes Oil NL 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. Lakes Oil NL can take advantage of this fund but it will also bring new competitors in the Oil & Gas - Integrated industry.
Regulatory challenges
– Lakes Oil NL 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 Oil & Gas - Integrated industry regulations.
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 Lakes Oil NL in the Oil & Gas - Integrated sector and impact the bottomline of the organization.
Consumer confidence and its impact on Lakes Oil NL demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Oil & Gas - Integrated industry and other sectors.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Lakes Oil NL needs to understand the core reasons impacting the Oil & Gas - Integrated industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Lakes Oil NL high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Oil & Gas - Integrated industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Lakes Oil NL can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Oil & Gas - Integrated industry are lowering. It can presents Lakes Oil NL with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Oil & Gas - Integrated sector.
Technology acceleration in Forth Industrial Revolution
– Lakes Oil NL has witnessed rapid integration of technology during Covid-19 in the Oil & Gas - Integrated industry. As one of the leading players in the industry, Lakes Oil NL needs to keep up with the evolution of technology in the Oil & Gas - Integrated sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lakes Oil NL can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Lakes Oil NL prominent markets.
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 Lakes Oil NL.
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. Lakes Oil NL 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.
Increasing wage structure of Lakes Oil NL
– 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 Lakes Oil NL.
Weighted SWOT Analysis of Lakes Oil NL Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Lakes Oil NL 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 Lakes Oil NL 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 Lakes Oil NL 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 Lakes Oil NL 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 Lakes Oil NL needs to make to build a sustainable competitive advantage.
