Nostrum Oil & Gas (NOGN) SWOT Analysis / TOWS Matrix / MBA Resources
Oil & Gas Operations
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Nostrum Oil & Gas (United Kingdom)
Based on various researches at Oak Spring University , Nostrum Oil & Gas is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs,
increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, etc
Introduction to SWOT Analysis of Nostrum Oil & Gas
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Nostrum Oil & Gas can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nostrum Oil & Gas, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nostrum Oil & Gas 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 Nostrum Oil & Gas can be done for the following purposes –
1. Strategic planning of Nostrum Oil & Gas
2. Improving business portfolio management of Nostrum Oil & Gas
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Oil & Gas Operations sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nostrum Oil & Gas
Strengths of Nostrum Oil & Gas | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nostrum Oil & Gas are -
Ability to lead change in Oil & Gas Operations
– Nostrum Oil & Gas is one of the leading players in the Oil & Gas Operations industry in United Kingdom. Over the years it has not only transformed the business landscape in the Oil & Gas Operations industry in United Kingdom but also across the existing markets. The ability to lead change has enabled Nostrum Oil & Gas in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Nostrum Oil & Gas 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 Nostrum Oil & Gas is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Nostrum Oil & Gas emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Nostrum Oil & Gas
– The covid-19 pandemic has put organizational resilience at the centre of everthing Nostrum Oil & Gas does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Oil & Gas Operations industry
– Nostrum Oil & Gas has clearly differentiated products in the market place. This has enabled Nostrum Oil & Gas to fetch slight price premium compare to the competitors in the Oil & Gas Operations industry. The sustainable margins have also helped Nostrum Oil & Gas to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Nostrum Oil & Gas is one of the leading players in the Oil & Gas Operations industry in United Kingdom. It is in a position to attract the best talent available in United Kingdom. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Nostrum Oil & Gas is one of the most innovative firm in Oil & Gas Operations sector.
High switching costs
– The high switching costs that Nostrum Oil & Gas 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
– Nostrum Oil & Gas has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nostrum Oil & Gas to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Nostrum Oil & Gas 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.
Strong track record of project management in the Oil & Gas Operations industry
– Nostrum Oil & Gas is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Nostrum Oil & Gas in the Energy sector have low bargaining power. Nostrum Oil & Gas has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nostrum Oil & Gas to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Nostrum Oil & Gas comprises – understanding the underlying the factors in the Oil & Gas Operations 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.
Weaknesses of Nostrum Oil & Gas | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nostrum Oil & Gas are -
High dependence on Nostrum Oil & Gas ‘s star products
– The top 2 products and services of Nostrum Oil & Gas still accounts for major business revenue. This dependence on star products in Oil & Gas Operations industry has resulted into insufficient focus on developing new products, even though Nostrum Oil & Gas has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of Nostrum Oil & Gas, 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.
Compensation and incentives
– The revenue per employee of Nostrum Oil & Gas 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.
Employees’ less understanding of Nostrum Oil & Gas strategy
– From the outside it seems that the employees of Nostrum Oil & Gas 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 operating costs
– Compare to the competitors, Nostrum Oil & Gas has high operating costs in the Oil & Gas Operations industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nostrum Oil & Gas lucrative customers.
Aligning sales with marketing
– From the outside it seems that Nostrum Oil & Gas 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 Nostrum Oil & Gas can leverage the sales team experience to cultivate customer relationships as Nostrum Oil & Gas is planning to shift buying processes online.
High bargaining power of channel partners in Oil & Gas Operations industry
– because of the regulatory requirements in United Kingdom, Nostrum Oil & Gas 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 Operations industry.
Slow decision making process
– As mentioned earlier in the report, Nostrum Oil & Gas has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Oil & Gas Operations industry over the last five years. Nostrum Oil & Gas 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.
Need for greater diversity
– Nostrum Oil & Gas 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, Nostrum Oil & Gas 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.
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 Nostrum Oil & Gas supply chain. Even after few cautionary changes, Nostrum Oil & Gas is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nostrum Oil & Gas vulnerable to further global disruptions in South East Asia.
Nostrum Oil & Gas Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Nostrum Oil & Gas are -
Learning at scale
– Online learning technologies has now opened space for Nostrum Oil & Gas 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.
Manufacturing automation
– Nostrum Oil & Gas can use the latest technology developments to improve its manufacturing and designing process in Oil & Gas Operations 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.
Loyalty marketing
– Nostrum Oil & Gas 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nostrum Oil & Gas 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nostrum Oil & Gas 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 Nostrum Oil & Gas to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Nostrum Oil & Gas to increase its market reach. Nostrum Oil & Gas 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nostrum Oil & Gas can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Oil & Gas Operations industry, but it has also influenced the consumer preferences. Nostrum Oil & Gas can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nostrum Oil & Gas 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 Operations industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nostrum Oil & Gas can use these opportunities to build new business models that can help the communities that Nostrum Oil & Gas operates in. Secondly it can use opportunities from government spending in Oil & Gas Operations sector.
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 Nostrum Oil & Gas in the Oil & Gas Operations industry. Now Nostrum Oil & Gas can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Nostrum Oil & Gas 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.
Creating value in data economy
– The success of analytics program of Nostrum Oil & Gas has opened avenues for new revenue streams for the organization in Oil & Gas Operations industry. This can help Nostrum Oil & Gas to build a more holistic ecosystem for Nostrum Oil & Gas products in the Oil & Gas Operations industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Nostrum Oil & Gas External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Nostrum Oil & Gas are -
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.
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 Nostrum Oil & Gas in the Oil & Gas Operations sector and impact the bottomline of the organization.
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. Nostrum Oil & Gas needs to understand the core reasons impacting the Oil & Gas Operations industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nostrum Oil & Gas 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 Nostrum Oil & Gas prominent markets.
Technology acceleration in Forth Industrial Revolution
– Nostrum Oil & Gas has witnessed rapid integration of technology during Covid-19 in the Oil & Gas Operations industry. As one of the leading players in the industry, Nostrum Oil & Gas 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.
Increasing wage structure of Nostrum Oil & Gas
– 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 Nostrum Oil & Gas.
High dependence on third party suppliers
– Nostrum Oil & Gas 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nostrum Oil & Gas 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.
Regulatory challenges
– Nostrum Oil & Gas 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 Operations industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Nostrum Oil & Gas 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.
Stagnating economy with rate increase
– Nostrum Oil & Gas 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Oil & Gas Operations industry are lowering. It can presents Nostrum Oil & Gas with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Oil & Gas Operations sector.
Easy access to finance
– Easy access to finance in Oil & Gas Operations industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nostrum Oil & Gas 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 Nostrum Oil & Gas Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Nostrum Oil & Gas 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 Nostrum Oil & Gas 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 Nostrum Oil & Gas 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 Nostrum Oil & Gas 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 Nostrum Oil & Gas needs to make to build a sustainable competitive advantage.
