SWOT Analysis / TOWS Matrix for Perisai Petroleum (Malaysia)
Based on various researches at Oak Spring University , Perisai Petroleum is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices,
technology disruption, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Perisai Petroleum
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Perisai Petroleum can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Perisai Petroleum, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Perisai Petroleum 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 Perisai Petroleum can be done for the following purposes –
1. Strategic planning of Perisai Petroleum
2. Improving business portfolio management of Perisai Petroleum
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Oil Well Services & Equipment sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Perisai Petroleum
Strengths of Perisai Petroleum | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Perisai Petroleum are -
Training and development
– Perisai Petroleum 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.
Innovation driven organization
– Perisai Petroleum is one of the most innovative firm in Oil Well Services & Equipment sector.
Analytics focus
– Perisai Petroleum 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 Malaysia 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.
Strong track record of project management in the Oil Well Services & Equipment industry
– Perisai Petroleum is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Perisai Petroleum in Oil Well Services & Equipment industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Perisai Petroleum has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Perisai Petroleum to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Perisai Petroleum
– The covid-19 pandemic has put organizational resilience at the centre of everthing Perisai Petroleum does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Perisai Petroleum in the Energy sector have low bargaining power. Perisai Petroleum has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Perisai Petroleum to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Perisai Petroleum 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.
Successful track record of launching new products
– Perisai Petroleum has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Perisai Petroleum 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.
Ability to recruit top talent
– Perisai Petroleum is one of the leading players in the Oil Well Services & Equipment industry in Malaysia. It is in a position to attract the best talent available in Malaysia. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Oil Well Services & Equipment industry
– Perisai Petroleum has clearly differentiated products in the market place. This has enabled Perisai Petroleum to fetch slight price premium compare to the competitors in the Oil Well Services & Equipment industry. The sustainable margins have also helped Perisai Petroleum to invest into research and development (R&D) and innovation.
Weaknesses of Perisai Petroleum | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Perisai Petroleum are -
Lack of clear differentiation of Perisai Petroleum products
– To increase the profitability and margins on the products, Perisai Petroleum 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 Oil Well Services & Equipment industry, Perisai Petroleum 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.
Increasing silos among functional specialists
– The organizational structure of Perisai Petroleum is dominated by functional specialists. It is not different from other players in the Oil Well Services & Equipment industry, but Perisai Petroleum needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Perisai Petroleum to focus more on services in the Oil Well Services & Equipment industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Perisai Petroleum is slow explore the new channels of communication. These new channels of communication can help Perisai Petroleum to provide better information regarding Oil Well Services & Equipment products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Perisai Petroleum 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.
Employees’ less understanding of Perisai Petroleum strategy
– From the outside it seems that the employees of Perisai Petroleum 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, Perisai Petroleum has high operating costs in the Oil Well Services & Equipment industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Perisai Petroleum lucrative customers.
Skills based hiring in Oil Well Services & Equipment industry
– The stress on hiring functional specialists at Perisai Petroleum 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.
High dependence on Perisai Petroleum ‘s star products
– The top 2 products and services of Perisai Petroleum still accounts for major business revenue. This dependence on star products in Oil Well Services & Equipment industry has resulted into insufficient focus on developing new products, even though Perisai Petroleum has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Perisai Petroleum 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 Well Services & Equipment industry over the last five years. Perisai Petroleum 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.
Products dominated business model
– Even though Perisai Petroleum has some of the most successful models in the Oil Well Services & Equipment industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Perisai Petroleum should strive to include more intangible value offerings along with its core products and services.
Perisai Petroleum Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Perisai Petroleum are -
Developing new processes and practices
– Perisai Petroleum 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.
Manufacturing automation
– Perisai Petroleum 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.
Leveraging digital technologies
– Perisai Petroleum 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
– Perisai Petroleum 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Perisai Petroleum can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Perisai Petroleum 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Perisai Petroleum 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 Well Services & Equipment industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Perisai Petroleum has opened avenues for new revenue streams for the organization in Oil Well Services & Equipment industry. This can help Perisai Petroleum to build a more holistic ecosystem for Perisai Petroleum products in the Oil Well Services & Equipment 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 Perisai Petroleum 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 Perisai Petroleum to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Perisai Petroleum can use these opportunities to build new business models that can help the communities that Perisai Petroleum operates in. Secondly it can use opportunities from government spending in Oil Well Services & Equipment sector.
Building a culture of innovation
– managers at Perisai Petroleum 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.
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. Perisai Petroleum can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Perisai Petroleum 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.
Threats Perisai Petroleum External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Perisai Petroleum are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Perisai Petroleum 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 Perisai Petroleum prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Oil Well Services & Equipment industry are lowering. It can presents Perisai Petroleum 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Perisai Petroleum 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.
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.
Increasing wage structure of Perisai Petroleum
– 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 Perisai Petroleum.
Stagnating economy with rate increase
– Perisai Petroleum 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.
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.
Environmental challenges
– Perisai Petroleum 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. Perisai Petroleum can take advantage of this fund but it will also bring new competitors in the Oil Well Services & Equipment industry.
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 Perisai Petroleum business can come under increasing regulations regarding data privacy, data security, etc.
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. Perisai Petroleum needs to understand the core reasons impacting the Oil Well Services & Equipment industry. This will help it in building a better workplace.
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 Perisai Petroleum in the Oil Well Services & Equipment sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Perisai Petroleum is facing in Oil Well Services & Equipment sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Perisai Petroleum 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 Perisai Petroleum Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Perisai Petroleum 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 Perisai Petroleum 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 Perisai Petroleum 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 Perisai Petroleum 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 Perisai Petroleum needs to make to build a sustainable competitive advantage.