SWOT Analysis / TOWS Matrix for TGS-NOPEC Geophysical (United Kingdom)
Based on various researches at Oak Spring University , TGS-NOPEC Geophysical is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing commodity prices, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings,
there is backlash against globalization, technology disruption, etc
Introduction to SWOT Analysis of TGS-NOPEC Geophysical
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that TGS-NOPEC Geophysical can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the TGS-NOPEC Geophysical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which TGS-NOPEC Geophysical 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 TGS-NOPEC Geophysical can be done for the following purposes –
1. Strategic planning of TGS-NOPEC Geophysical
2. Improving business portfolio management of TGS-NOPEC Geophysical
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Oil Well Services & Equipment sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of TGS-NOPEC Geophysical
Strengths of TGS-NOPEC Geophysical | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of TGS-NOPEC Geophysical are -
Operational resilience
– The operational resilience strategy of TGS-NOPEC Geophysical comprises – understanding the underlying the factors in the Oil Well Services & Equipment 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.
Effective Research and Development (R&D)
– TGS-NOPEC Geophysical has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – TGS-NOPEC Geophysical staying ahead in the Oil Well Services & Equipment industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of TGS-NOPEC Geophysical
– The covid-19 pandemic has put organizational resilience at the centre of everthing TGS-NOPEC Geophysical does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– TGS-NOPEC Geophysical 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 Oil Well Services & Equipment industry. The technology infrastructure of United Kingdom is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Diverse revenue streams
– TGS-NOPEC Geophysical is present in almost all the verticals within the Oil Well Services & Equipment industry. This has provided TGS-NOPEC Geophysical 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.
High brand equity
– TGS-NOPEC Geophysical has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled TGS-NOPEC Geophysical to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of TGS-NOPEC Geophysical in the Energy sector have low bargaining power. TGS-NOPEC Geophysical has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps TGS-NOPEC Geophysical to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– TGS-NOPEC Geophysical 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.
High switching costs
– The high switching costs that TGS-NOPEC Geophysical 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.
Innovation driven organization
– TGS-NOPEC Geophysical is one of the most innovative firm in Oil Well Services & Equipment sector.
Learning organization
- TGS-NOPEC Geophysical 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 TGS-NOPEC Geophysical is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at TGS-NOPEC Geophysical emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the TGS-NOPEC Geophysical are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses of TGS-NOPEC Geophysical | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TGS-NOPEC Geophysical are -
Ability to respond to the competition
– As the decision making is very deliberative at TGS-NOPEC Geophysical, in the dynamic environment of Oil Well Services & Equipment industry it has struggled to respond to the nimble upstart competition. TGS-NOPEC Geophysical has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– TGS-NOPEC Geophysical 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.
Skills based hiring in Oil Well Services & Equipment industry
– The stress on hiring functional specialists at TGS-NOPEC Geophysical 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.
Workers concerns about automation
– As automation is fast increasing in the Oil Well Services & Equipment industry, TGS-NOPEC Geophysical 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.
No frontier risks strategy
– From the 10K / annual statement of TGS-NOPEC Geophysical, it seems that company is thinking out the frontier risks that can impact Oil Well Services & Equipment 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.
Capital Spending Reduction
– Even during the low interest decade, TGS-NOPEC Geophysical 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 Well Services & Equipment industry using digital technology.
Compensation and incentives
– The revenue per employee of TGS-NOPEC Geophysical is just above the Oil Well Services & Equipment 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.
Lack of clear differentiation of TGS-NOPEC Geophysical products
– To increase the profitability and margins on the products, TGS-NOPEC Geophysical needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of United Kingdom, TGS-NOPEC Geophysical needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As TGS-NOPEC Geophysical is one of the leading players in the Oil Well Services & Equipment industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Oil Well Services & Equipment industry in last five years.
Increasing silos among functional specialists
– The organizational structure of TGS-NOPEC Geophysical is dominated by functional specialists. It is not different from other players in the Oil Well Services & Equipment industry, but TGS-NOPEC Geophysical needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help TGS-NOPEC Geophysical to focus more on services in the Oil Well Services & Equipment industry rather than just following the product oriented approach.
TGS-NOPEC Geophysical Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of TGS-NOPEC Geophysical are -
Buying journey improvements
– TGS-NOPEC Geophysical can improve the customer journey of consumers in the Oil Well Services & Equipment 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 TGS-NOPEC Geophysical 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 TGS-NOPEC Geophysical to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– TGS-NOPEC Geophysical can develop new processes and procedures in Oil Well Services & Equipment 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Oil Well Services & Equipment industry, but it has also influenced the consumer preferences. TGS-NOPEC Geophysical can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at TGS-NOPEC Geophysical 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 Well Services & Equipment industry.
Use of Bitcoin and other crypto currencies for transactions in Oil Well Services & Equipment industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for TGS-NOPEC Geophysical in the Oil Well Services & Equipment industry. Now TGS-NOPEC Geophysical can target international markets with far fewer capital restrictions requirements than the existing system.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help TGS-NOPEC Geophysical to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Redefining models of collaboration and team work
– As explained in the weaknesses section, TGS-NOPEC Geophysical is facing challenges because of the dominance of functional experts in the organization. TGS-NOPEC Geophysical can utilize new technology in the field of Oil Well Services & Equipment industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help TGS-NOPEC Geophysical to increase its market reach. TGS-NOPEC Geophysical 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, TGS-NOPEC Geophysical 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 TGS-NOPEC Geophysical to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for TGS-NOPEC Geophysical 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.
Using analytics as competitive advantage
– TGS-NOPEC Geophysical has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Oil Well Services & Equipment sector. This continuous investment in analytics has enabled TGS-NOPEC Geophysical to build a competitive advantage using analytics. The analytics driven competitive advantage can help TGS-NOPEC Geophysical to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– TGS-NOPEC Geophysical can use the latest technology developments to improve its manufacturing and designing process in Oil Well Services & Equipment sector. 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.
Threats TGS-NOPEC Geophysical External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of TGS-NOPEC Geophysical are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, TGS-NOPEC Geophysical 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 Well Services & Equipment sector.
Regulatory challenges
– TGS-NOPEC Geophysical 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 Well Services & Equipment industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Oil Well Services & Equipment industry are lowering. It can presents TGS-NOPEC Geophysical with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Oil Well Services & Equipment sector.
Shortening product life cycle
– it is one of the major threat that TGS-NOPEC Geophysical is facing in Oil Well Services & Equipment sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. TGS-NOPEC Geophysical 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, TGS-NOPEC Geophysical 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 TGS-NOPEC Geophysical prominent markets.
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.
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 TGS-NOPEC Geophysical business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of TGS-NOPEC Geophysical
– 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 TGS-NOPEC Geophysical.
Stagnating economy with rate increase
– TGS-NOPEC Geophysical 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 Well Services & Equipment industry.
Consumer confidence and its impact on TGS-NOPEC Geophysical 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 Well Services & Equipment industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– TGS-NOPEC Geophysical has witnessed rapid integration of technology during Covid-19 in the Oil Well Services & Equipment industry. As one of the leading players in the industry, TGS-NOPEC Geophysical needs to keep up with the evolution of technology in the Oil Well Services & Equipment 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.
Easy access to finance
– Easy access to finance in Oil Well Services & Equipment industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. TGS-NOPEC Geophysical can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of TGS-NOPEC Geophysical Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at TGS-NOPEC Geophysical 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 TGS-NOPEC Geophysical 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 TGS-NOPEC Geophysical 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 TGS-NOPEC Geophysical 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 TGS-NOPEC Geophysical needs to make to build a sustainable competitive advantage.