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Chesapeake Energy (CHKE34) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Chesapeake Energy (Brazil)


Based on various researches at Oak Spring University , Chesapeake Energy is operating in a macro-environment that has been destablized by – there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, etc



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Introduction to SWOT Analysis of Chesapeake Energy


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Chesapeake Energy can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chesapeake Energy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chesapeake Energy 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 Chesapeake Energy can be done for the following purposes –
1. Strategic planning of Chesapeake Energy
2. Improving business portfolio management of Chesapeake Energy
3. Assessing feasibility of the new initiative in Brazil
4. Making a NA sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chesapeake Energy




Strengths of Chesapeake Energy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Chesapeake Energy are -

High brand equity

– Chesapeake Energy has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chesapeake Energy to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Ability to recruit top talent

– Chesapeake Energy is one of the leading players in the NA industry in Brazil. It is in a position to attract the best talent available in Brazil. The firm has a robust talent identification program that helps in identifying the brightest.

Strong track record of project management in the NA industry

– Chesapeake Energy is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Sustainable margins compare to other players in NA industry

– Chesapeake Energy has clearly differentiated products in the market place. This has enabled Chesapeake Energy to fetch slight price premium compare to the competitors in the NA industry. The sustainable margins have also helped Chesapeake Energy to invest into research and development (R&D) and innovation.

Cross disciplinary teams

– Horizontal connected teams at the Chesapeake Energy 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.

Innovation driven organization

– Chesapeake Energy is one of the most innovative firm in NA sector.

Ability to lead change in NA

– Chesapeake Energy is one of the leading players in the NA industry in Brazil. Over the years it has not only transformed the business landscape in the NA industry in Brazil but also across the existing markets. The ability to lead change has enabled Chesapeake Energy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Training and development

– Chesapeake Energy has one of the best training and development program in NA 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.

Low bargaining power of suppliers

– Suppliers of Chesapeake Energy in the NA sector have low bargaining power. Chesapeake Energy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chesapeake Energy to manage not only supply disruptions but also source products at highly competitive prices.

Diverse revenue streams

– Chesapeake Energy is present in almost all the verticals within the NA industry. This has provided Chesapeake Energy 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.

Digital Transformation in NA industry

- digital transformation varies from industry to industry. For Chesapeake Energy digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Chesapeake Energy 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.

Analytics focus

– Chesapeake Energy 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 NA industry. The technology infrastructure of Brazil 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.






Weaknesses of Chesapeake Energy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Chesapeake Energy are -

Lack of clear differentiation of Chesapeake Energy products

– To increase the profitability and margins on the products, Chesapeake Energy needs to provide more differentiated products than what it is currently offering in the marketplace.

High cash cycle compare to competitors

Chesapeake Energy has a high cash cycle compare to other players in the NA industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Skills based hiring in NA industry

– The stress on hiring functional specialists at Chesapeake Energy 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.

Products dominated business model

– Even though Chesapeake Energy has some of the most successful models in the NA industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Chesapeake Energy should strive to include more intangible value offerings along with its core products and services.

Slow decision making process

– As mentioned earlier in the report, Chesapeake Energy has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the NA industry over the last five years. Chesapeake Energy 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.

Employees’ less understanding of Chesapeake Energy strategy

– From the outside it seems that the employees of Chesapeake Energy 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.

Increasing silos among functional specialists

– The organizational structure of Chesapeake Energy is dominated by functional specialists. It is not different from other players in the NA industry, but Chesapeake Energy needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chesapeake Energy to focus more on services in the NA industry rather than just following the product oriented approach.

Ability to respond to the competition

– As the decision making is very deliberative at Chesapeake Energy, in the dynamic environment of NA industry it has struggled to respond to the nimble upstart competition. Chesapeake Energy has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Capital Spending Reduction

– Even during the low interest decade, Chesapeake Energy 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 NA industry using digital technology.

High dependence on Chesapeake Energy ‘s star products

– The top 2 products and services of Chesapeake Energy still accounts for major business revenue. This dependence on star products in NA industry has resulted into insufficient focus on developing new products, even though Chesapeake Energy has relatively successful track record of launching new products.

High operating costs

– Compare to the competitors, Chesapeake Energy has high operating costs in the NA industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Chesapeake Energy lucrative customers.




Chesapeake Energy Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The opportunities of Chesapeake Energy are -

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the NA industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Chesapeake Energy 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. Chesapeake Energy 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.

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 Chesapeake Energy 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.

Using analytics as competitive advantage

– Chesapeake Energy has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in NA sector. This continuous investment in analytics has enabled Chesapeake Energy to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chesapeake Energy to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Developing new processes and practices

– Chesapeake Energy can develop new processes and procedures in NA 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.

Building a culture of innovation

– managers at Chesapeake Energy 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 NA industry.

Better consumer reach

– The expansion of the 5G network will help Chesapeake Energy to increase its market reach. Chesapeake Energy 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.

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. Chesapeake Energy can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Chesapeake Energy 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 Chesapeake Energy to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Creating value in data economy

– The success of analytics program of Chesapeake Energy has opened avenues for new revenue streams for the organization in NA industry. This can help Chesapeake Energy to build a more holistic ecosystem for Chesapeake Energy products in the NA industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Manufacturing automation

– Chesapeake Energy can use the latest technology developments to improve its manufacturing and designing process in NA 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

– Chesapeake Energy 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Chesapeake Energy is facing challenges because of the dominance of functional experts in the organization. Chesapeake Energy can utilize new technology in the field of NA industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Buying journey improvements

– Chesapeake Energy can improve the customer journey of consumers in the NA 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.




Threats Chesapeake Energy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats of Chesapeake Energy are -

Consumer confidence and its impact on Chesapeake Energy 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 NA industry and other sectors.

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. Chesapeake Energy 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.

Increasing wage structure of Chesapeake Energy

– 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 Chesapeake Energy.

Easy access to finance

– Easy access to finance in NA industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chesapeake Energy can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 Chesapeake Energy business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that Chesapeake Energy is facing in NA sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Chesapeake Energy in NA industry. The NA 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.

High dependence on third party suppliers

– Chesapeake Energy 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Chesapeake Energy may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of NA sector.

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. Chesapeake Energy needs to understand the core reasons impacting the NA industry. This will help it in building a better workplace.

Regulatory challenges

– Chesapeake Energy 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 NA industry regulations.




Weighted SWOT Analysis of Chesapeake Energy Template, Example


Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Chesapeake Energy 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 Chesapeake Energy 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 Chesapeake Energy 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 Chesapeake Energy 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 Chesapeake Energy needs to make to build a sustainable competitive advantage.



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