Cheniere Energy Partners (CQP) SWOT Analysis / TOWS Matrix / MBA Resources
Natural Gas Utilities
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Cheniere Energy Partners (United States)
Based on various researches at Oak Spring University , Cheniere Energy Partners is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, increasing household debt because of falling income levels,
customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Cheniere Energy Partners
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Cheniere Energy Partners can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cheniere Energy Partners, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cheniere Energy Partners 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 Cheniere Energy Partners can be done for the following purposes –
1. Strategic planning of Cheniere Energy Partners
2. Improving business portfolio management of Cheniere Energy Partners
3. Assessing feasibility of the new initiative in United States
4. Making a Natural Gas Utilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cheniere Energy Partners
Strengths of Cheniere Energy Partners | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cheniere Energy Partners are -
Sustainable margins compare to other players in Natural Gas Utilities industry
– Cheniere Energy Partners has clearly differentiated products in the market place. This has enabled Cheniere Energy Partners to fetch slight price premium compare to the competitors in the Natural Gas Utilities industry. The sustainable margins have also helped Cheniere Energy Partners to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Cheniere Energy Partners in the Utilities sector have low bargaining power. Cheniere Energy Partners has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cheniere Energy Partners to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Cheniere Energy Partners comprises – understanding the underlying the factors in the Natural Gas Utilities 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.
High switching costs
– The high switching costs that Cheniere Energy Partners 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.
Training and development
– Cheniere Energy Partners has one of the best training and development program in Utilities 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.
Ability to recruit top talent
– Cheniere Energy Partners is one of the leading players in the Natural Gas Utilities industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Cheniere Energy Partners has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Cheniere Energy Partners staying ahead in the Natural Gas Utilities industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Cheniere Energy Partners in Natural Gas Utilities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Natural Gas Utilities industry
- digital transformation varies from industry to industry. For Cheniere Energy Partners digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cheniere Energy Partners 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.
Cross disciplinary teams
– Horizontal connected teams at the Cheniere Energy Partners 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.
Diverse revenue streams
– Cheniere Energy Partners is present in almost all the verticals within the Natural Gas Utilities industry. This has provided Cheniere Energy Partners 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
– Cheniere Energy Partners has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cheniere Energy Partners to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Cheniere Energy Partners | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cheniere Energy Partners are -
Lack of clear differentiation of Cheniere Energy Partners products
– To increase the profitability and margins on the products, Cheniere Energy Partners needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee of Cheniere Energy Partners is just above the Natural Gas Utilities 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.
Skills based hiring in Natural Gas Utilities industry
– The stress on hiring functional specialists at Cheniere Energy Partners 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 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 Cheniere Energy Partners supply chain. Even after few cautionary changes, Cheniere Energy Partners is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cheniere Energy Partners vulnerable to further global disruptions in South East Asia.
Employees’ less understanding of Cheniere Energy Partners strategy
– From the outside it seems that the employees of Cheniere Energy Partners 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.
Aligning sales with marketing
– From the outside it seems that Cheniere Energy Partners needs to have more collaboration between its sales team and marketing team. Sales professionals in the Natural Gas Utilities industry have deep experience in developing customer relationships. Marketing department at Cheniere Energy Partners can leverage the sales team experience to cultivate customer relationships as Cheniere Energy Partners is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Cheniere Energy Partners 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 Natural Gas Utilities industry using digital technology.
High bargaining power of channel partners in Natural Gas Utilities industry
– because of the regulatory requirements in United States, Cheniere Energy Partners 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 Natural Gas Utilities industry.
Low market penetration in new markets
– Outside its home market of United States, Cheniere Energy Partners needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Cheniere Energy Partners is dominated by functional specialists. It is not different from other players in the Natural Gas Utilities industry, but Cheniere Energy Partners needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cheniere Energy Partners to focus more on services in the Natural Gas Utilities industry rather than just following the product oriented approach.
High dependence on Cheniere Energy Partners ‘s star products
– The top 2 products and services of Cheniere Energy Partners still accounts for major business revenue. This dependence on star products in Natural Gas Utilities industry has resulted into insufficient focus on developing new products, even though Cheniere Energy Partners has relatively successful track record of launching new products.
Cheniere Energy Partners Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Cheniere Energy Partners are -
Leveraging digital technologies
– Cheniere Energy Partners 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.
Better consumer reach
– The expansion of the 5G network will help Cheniere Energy Partners to increase its market reach. Cheniere Energy Partners 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. Cheniere Energy Partners can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cheniere Energy Partners can use these opportunities to build new business models that can help the communities that Cheniere Energy Partners operates in. Secondly it can use opportunities from government spending in Natural Gas Utilities sector.
Use of Bitcoin and other crypto currencies for transactions in Natural Gas Utilities industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cheniere Energy Partners in the Natural Gas Utilities industry. Now Cheniere Energy Partners can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Cheniere Energy Partners can use the latest technology developments to improve its manufacturing and designing process in Natural Gas Utilities 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cheniere Energy Partners in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Natural Gas Utilities industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Cheniere Energy Partners 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 Natural Gas Utilities industry.
Creating value in data economy
– The success of analytics program of Cheniere Energy Partners has opened avenues for new revenue streams for the organization in Natural Gas Utilities industry. This can help Cheniere Energy Partners to build a more holistic ecosystem for Cheniere Energy Partners products in the Natural Gas Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cheniere Energy Partners can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cheniere Energy Partners is facing challenges because of the dominance of functional experts in the organization. Cheniere Energy Partners can utilize new technology in the field of Natural Gas Utilities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Cheniere Energy Partners has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Natural Gas Utilities sector. This continuous investment in analytics has enabled Cheniere Energy Partners to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cheniere Energy Partners to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Natural Gas Utilities industry, but it has also influenced the consumer preferences. Cheniere Energy Partners can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Cheniere Energy Partners External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Cheniere Energy Partners are -
Increasing wage structure of Cheniere Energy Partners
– 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 Cheniere Energy Partners.
Easy access to finance
– Easy access to finance in Natural Gas Utilities industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cheniere Energy Partners can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Cheniere Energy Partners has witnessed rapid integration of technology during Covid-19 in the Natural Gas Utilities industry. As one of the leading players in the industry, Cheniere Energy Partners needs to keep up with the evolution of technology in the Natural Gas Utilities 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.
High dependence on third party suppliers
– Cheniere Energy Partners 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.
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. Cheniere Energy Partners needs to understand the core reasons impacting the Natural Gas Utilities industry. This will help it in building a better workplace.
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.
Shortening product life cycle
– it is one of the major threat that Cheniere Energy Partners is facing in Natural Gas Utilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Cheniere Energy Partners 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 Natural Gas Utilities industry and other sectors.
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.
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. Cheniere Energy Partners 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cheniere Energy Partners in Natural Gas Utilities industry. The Natural Gas Utilities 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.
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 Cheniere Energy Partners business can come under increasing regulations regarding data privacy, data security, etc.
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 Cheniere Energy Partners in the Natural Gas Utilities sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Cheniere Energy Partners Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Cheniere Energy Partners 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 Cheniere Energy Partners 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 Cheniere Energy Partners 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 Cheniere Energy Partners 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 Cheniere Energy Partners needs to make to build a sustainable competitive advantage.