BP Castrol KK (5015) SWOT Analysis / TOWS Matrix / MBA Resources
Oil & Gas Operations
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for BP Castrol KK (Japan)
Based on various researches at Oak Spring University , BP Castrol KK is operating in a macro-environment that has been destablized by – increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, geopolitical disruptions, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that BP Castrol KK can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the BP Castrol KK, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which BP Castrol KK 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 BP Castrol KK can be done for the following purposes –
1. Strategic planning of BP Castrol KK
2. Improving business portfolio management of BP Castrol KK
3. Assessing feasibility of the new initiative in Japan
4. Making a Oil & Gas Operations sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of BP Castrol KK
Strengths of BP Castrol KK | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of BP Castrol KK are -
Training and development
– BP Castrol KK 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.
Ability to lead change in Oil & Gas Operations
– BP Castrol KK is one of the leading players in the Oil & Gas Operations industry in Japan. Over the years it has not only transformed the business landscape in the Oil & Gas Operations industry in Japan but also across the existing markets. The ability to lead change has enabled BP Castrol KK in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of BP Castrol KK in the Energy sector have low bargaining power. BP Castrol KK has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps BP Castrol KK to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Oil & Gas Operations industry
– BP Castrol KK has clearly differentiated products in the market place. This has enabled BP Castrol KK to fetch slight price premium compare to the competitors in the Oil & Gas Operations industry. The sustainable margins have also helped BP Castrol KK to invest into research and development (R&D) and innovation.
Innovation driven organization
– BP Castrol KK is one of the most innovative firm in Oil & Gas Operations sector.
High switching costs
– The high switching costs that BP Castrol KK 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.
Effective Research and Development (R&D)
– BP Castrol KK has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – BP Castrol KK staying ahead in the Oil & Gas Operations industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of BP Castrol KK
– The covid-19 pandemic has put organizational resilience at the centre of everthing BP Castrol KK does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– BP Castrol KK is present in almost all the verticals within the Oil & Gas Operations industry. This has provided BP Castrol KK 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.
Superior customer experience
– The customer experience strategy of BP Castrol KK in Oil & Gas Operations industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– BP Castrol KK is one of the leading players in the Oil & Gas Operations industry in Japan. It is in a position to attract the best talent available in Japan. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Oil & Gas Operations industry
- digital transformation varies from industry to industry. For BP Castrol KK digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. BP Castrol KK 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.
Weaknesses of BP Castrol KK | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BP Castrol KK are -
Increasing silos among functional specialists
– The organizational structure of BP Castrol KK is dominated by functional specialists. It is not different from other players in the Oil & Gas Operations industry, but BP Castrol KK needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help BP Castrol KK to focus more on services in the Oil & Gas Operations industry rather than just following the product oriented approach.
Need for greater diversity
– BP Castrol KK 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.
No frontier risks strategy
– From the 10K / annual statement of BP Castrol KK, it seems that company is thinking out the frontier risks that can impact Oil & Gas Operations industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Employees’ less understanding of BP Castrol KK strategy
– From the outside it seems that the employees of BP Castrol KK 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.
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 BP Castrol KK supply chain. Even after few cautionary changes, BP Castrol KK is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left BP Castrol KK vulnerable to further global disruptions in South East Asia.
Skills based hiring in Oil & Gas Operations industry
– The stress on hiring functional specialists at BP Castrol KK has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Compensation and incentives
– The revenue per employee of BP Castrol KK is just above the Oil & Gas Operations industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Aligning sales with marketing
– From the outside it seems that BP Castrol KK needs to have more collaboration between its sales team and marketing team. Sales professionals in the Oil & Gas Operations industry have deep experience in developing customer relationships. Marketing department at BP Castrol KK can leverage the sales team experience to cultivate customer relationships as BP Castrol KK is planning to shift buying processes online.
Interest costs
– Compare to the competition, BP Castrol KK 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.
Capital Spending Reduction
– Even during the low interest decade, BP Castrol KK 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 Operations industry using digital technology.
Slow to strategic competitive environment developments
– As BP Castrol KK is one of the leading players in the Oil & Gas Operations 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 Operations industry in last five years.
BP Castrol KK Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of BP Castrol KK are -
Use of Bitcoin and other crypto currencies for transactions in Oil & Gas Operations industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for BP Castrol KK in the Oil & Gas Operations industry. Now BP Castrol KK can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of BP Castrol KK has opened avenues for new revenue streams for the organization in Oil & Gas Operations industry. This can help BP Castrol KK to build a more holistic ecosystem for BP Castrol KK products in the Oil & Gas Operations industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for BP Castrol KK 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 BP Castrol KK to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– BP Castrol KK 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.
Developing new processes and practices
– BP Castrol KK can develop new processes and procedures in Oil & Gas Operations 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, BP Castrol KK can use these opportunities to build new business models that can help the communities that BP Castrol KK operates in. Secondly it can use opportunities from government spending in Oil & Gas Operations sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, BP Castrol KK is facing challenges because of the dominance of functional experts in the organization. BP Castrol KK can utilize new technology in the field of Oil & Gas Operations industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Oil & Gas Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. BP Castrol KK 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. BP Castrol KK 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
– BP Castrol KK 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.
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. BP Castrol KK can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at BP Castrol KK can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Oil & Gas Operations industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, BP Castrol KK 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.
Using analytics as competitive advantage
– BP Castrol KK has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Oil & Gas Operations sector. This continuous investment in analytics has enabled BP Castrol KK to build a competitive advantage using analytics. The analytics driven competitive advantage can help BP Castrol KK to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats BP Castrol KK External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of BP Castrol KK are -
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. BP Castrol KK 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.
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.
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.
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 BP Castrol KK.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for BP Castrol KK in Oil & Gas Operations industry. The Oil & Gas Operations 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.
Stagnating economy with rate increase
– BP Castrol KK 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 Oil & Gas Operations industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, BP Castrol KK may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Oil & Gas Operations sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, BP Castrol KK 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 BP Castrol KK prominent markets.
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. BP Castrol KK needs to understand the core reasons impacting the Oil & Gas Operations industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– BP Castrol KK has witnessed rapid integration of technology during Covid-19 in the Oil & Gas Operations industry. As one of the leading players in the industry, BP Castrol KK needs to keep up with the evolution of technology in the Oil & Gas Operations 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.
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 BP Castrol KK business can come under increasing regulations regarding data privacy, data security, etc.
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 BP Castrol KK in the Oil & Gas Operations sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that BP Castrol KK is facing in Oil & Gas Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of BP Castrol KK Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at BP Castrol KK 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 BP Castrol KK 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 BP Castrol KK 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 BP Castrol KK 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 BP Castrol KK needs to make to build a sustainable competitive advantage.