BP Prudhoe Bay Royalty Trust (BPT) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for BP Prudhoe Bay Royalty Trust (United States)

Based on various researches at Oak Spring University , BP Prudhoe Bay Royalty Trust is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, geopolitical disruptions, increasing government debt because of Covid-19 spendings, technology disruption, increasing commodity prices, etc

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Introduction to SWOT Analysis of BP Prudhoe Bay Royalty Trust

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that BP Prudhoe Bay Royalty Trust can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the BP Prudhoe Bay Royalty Trust, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which BP Prudhoe Bay Royalty Trust 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of BP Prudhoe Bay Royalty Trust can be done for the following purposes –
1. Strategic planning of BP Prudhoe Bay Royalty Trust
2. Improving business portfolio management of BP Prudhoe Bay Royalty Trust
3. Assessing feasibility of the new initiative in United States
4. Making a Oil & Gas Operations sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of BP Prudhoe Bay Royalty Trust

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Strengths of BP Prudhoe Bay Royalty Trust | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of BP Prudhoe Bay Royalty Trust are -

Digital Transformation in Oil & Gas Operations industry

- digital transformation varies from industry to industry. For BP Prudhoe Bay Royalty Trust digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. BP Prudhoe Bay Royalty Trust 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.

Innovation driven organization

– BP Prudhoe Bay Royalty Trust is one of the most innovative firm in Oil & Gas Operations sector.

Superior customer experience

– The customer experience strategy of BP Prudhoe Bay Royalty Trust in Oil & Gas Operations industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Diverse revenue streams

– BP Prudhoe Bay Royalty Trust is present in almost all the verticals within the Oil & Gas Operations industry. This has provided BP Prudhoe Bay Royalty Trust 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

– BP Prudhoe Bay Royalty Trust has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled BP Prudhoe Bay Royalty Trust to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Low bargaining power of suppliers

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

High switching costs

– The high switching costs that BP Prudhoe Bay Royalty Trust 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 Prudhoe Bay Royalty Trust has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – BP Prudhoe Bay Royalty Trust 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.

Ability to lead change in Oil & Gas Operations

– BP Prudhoe Bay Royalty Trust is one of the leading players in the Oil & Gas Operations industry in United States. Over the years it has not only transformed the business landscape in the Oil & Gas Operations industry in United States but also across the existing markets. The ability to lead change has enabled BP Prudhoe Bay Royalty Trust in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Organizational Resilience of BP Prudhoe Bay Royalty Trust

– The covid-19 pandemic has put organizational resilience at the centre of everthing BP Prudhoe Bay Royalty Trust does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Successful track record of launching new products

– BP Prudhoe Bay Royalty Trust has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. BP Prudhoe Bay Royalty Trust 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.

Strong track record of project management in the Oil & Gas Operations industry

– BP Prudhoe Bay Royalty Trust is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

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Weaknesses of BP Prudhoe Bay Royalty Trust | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of BP Prudhoe Bay Royalty Trust are -

Ability to respond to the competition

– As the decision making is very deliberative at BP Prudhoe Bay Royalty Trust, in the dynamic environment of Oil & Gas Operations industry it has struggled to respond to the nimble upstart competition. BP Prudhoe Bay Royalty Trust has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Slow to strategic competitive environment developments

– As BP Prudhoe Bay Royalty Trust 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.

Skills based hiring in Oil & Gas Operations industry

– The stress on hiring functional specialists at BP Prudhoe Bay Royalty Trust 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 bargaining power of channel partners in Oil & Gas Operations industry

– because of the regulatory requirements in United States, BP Prudhoe Bay Royalty Trust 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.

Capital Spending Reduction

– Even during the low interest decade, BP Prudhoe Bay Royalty Trust 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.

Products dominated business model

– Even though BP Prudhoe Bay Royalty Trust has some of the most successful models in the Oil & Gas Operations industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. BP Prudhoe Bay Royalty Trust should strive to include more intangible value offerings along with its core products and services.

Aligning sales with marketing

– From the outside it seems that BP Prudhoe Bay Royalty Trust 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 Prudhoe Bay Royalty Trust can leverage the sales team experience to cultivate customer relationships as BP Prudhoe Bay Royalty Trust is planning to shift buying processes online.

High cash cycle compare to competitors

BP Prudhoe Bay Royalty Trust has a high cash cycle compare to other players in the Oil & Gas Operations industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, BP Prudhoe Bay Royalty Trust is slow explore the new channels of communication. These new channels of communication can help BP Prudhoe Bay Royalty Trust to provide better information regarding Oil & Gas Operations products and services. It can also build an online community to further reach out to potential customers.

Lack of clear differentiation of BP Prudhoe Bay Royalty Trust products

– To increase the profitability and margins on the products, BP Prudhoe Bay Royalty Trust needs to provide more differentiated products than what it is currently offering in the marketplace.

Compensation and incentives

– The revenue per employee of BP Prudhoe Bay Royalty Trust 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.

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BP Prudhoe Bay Royalty Trust Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of BP Prudhoe Bay Royalty Trust are -

Loyalty marketing

– BP Prudhoe Bay Royalty Trust 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.

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. BP Prudhoe Bay Royalty Trust can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects BP Prudhoe Bay Royalty Trust 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 BP Prudhoe Bay Royalty Trust 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

– BP Prudhoe Bay Royalty Trust 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, BP Prudhoe Bay Royalty Trust 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.

Building a culture of innovation

– managers at BP Prudhoe Bay Royalty Trust 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.

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 Prudhoe Bay Royalty Trust 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 Prudhoe Bay Royalty Trust 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.

Creating value in data economy

– The success of analytics program of BP Prudhoe Bay Royalty Trust has opened avenues for new revenue streams for the organization in Oil & Gas Operations industry. This can help BP Prudhoe Bay Royalty Trust to build a more holistic ecosystem for BP Prudhoe Bay Royalty Trust products in the Oil & Gas Operations industry by providing – data insight services, data privacy related products, data based consulting services, etc.

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 Prudhoe Bay Royalty Trust in the Oil & Gas Operations industry. Now BP Prudhoe Bay Royalty Trust can target international markets with far fewer capital restrictions requirements than the existing system.

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 Prudhoe Bay Royalty Trust can use these opportunities to build new business models that can help the communities that BP Prudhoe Bay Royalty Trust operates in. Secondly it can use opportunities from government spending in Oil & Gas Operations sector.

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 Prudhoe Bay Royalty Trust can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Lowering marketing communication costs

– 5G expansion will open new opportunities for BP Prudhoe Bay Royalty Trust 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.

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Threats BP Prudhoe Bay Royalty Trust External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of BP Prudhoe Bay Royalty Trust are -

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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, BP Prudhoe Bay Royalty Trust 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.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for BP Prudhoe Bay Royalty Trust 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.

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 Prudhoe Bay Royalty Trust needs to understand the core reasons impacting the Oil & Gas Operations industry. This will help it in building a better workplace.

High dependence on third party suppliers

– BP Prudhoe Bay Royalty Trust 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.

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 Prudhoe Bay Royalty Trust in the Oil & Gas Operations sector and impact the bottomline of the organization.

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 Prudhoe Bay Royalty Trust business can come under increasing regulations regarding data privacy, data security, 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. BP Prudhoe Bay Royalty Trust 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.

Regulatory challenges

– BP Prudhoe Bay Royalty Trust 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.

Environmental challenges

– BP Prudhoe Bay Royalty Trust 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. BP Prudhoe Bay Royalty Trust can take advantage of this fund but it will also bring new competitors in the Oil & Gas Operations industry.

Shortening product life cycle

– it is one of the major threat that BP Prudhoe Bay Royalty Trust is facing in Oil & Gas Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Oil & Gas Operations industry are lowering. It can presents BP Prudhoe Bay Royalty Trust 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.

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Weighted SWOT Analysis of BP Prudhoe Bay Royalty Trust Template, Example

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

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