Dominion Energy Midstream (DM) SWOT Analysis / TOWS Matrix / MBA Resources
Natural Gas Utilities
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Dominion Energy Midstream (United States)
Based on various researches at Oak Spring University , Dominion Energy Midstream is operating in a macro-environment that has been destablized by – wage bills are increasing, talent flight as more people leaving formal jobs, technology disruption, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions,
there is increasing trade war between United States & China, there is backlash against globalization, etc
Introduction to SWOT Analysis of Dominion Energy Midstream
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Dominion Energy Midstream can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dominion Energy Midstream, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dominion Energy Midstream 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 Dominion Energy Midstream can be done for the following purposes –
1. Strategic planning of Dominion Energy Midstream
2. Improving business portfolio management of Dominion Energy Midstream
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 Dominion Energy Midstream
Strengths of Dominion Energy Midstream | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dominion Energy Midstream are -
Ability to lead change in Natural Gas Utilities
– Dominion Energy Midstream is one of the leading players in the Natural Gas Utilities industry in United States. Over the years it has not only transformed the business landscape in the Natural Gas Utilities industry in United States but also across the existing markets. The ability to lead change has enabled Dominion Energy Midstream in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Dominion Energy Midstream is one of the most innovative firm in Natural Gas Utilities sector.
Effective Research and Development (R&D)
– Dominion Energy Midstream has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Dominion Energy Midstream 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.
High brand equity
– Dominion Energy Midstream has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dominion Energy Midstream to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Natural Gas Utilities industry
– Dominion Energy Midstream has clearly differentiated products in the market place. This has enabled Dominion Energy Midstream to fetch slight price premium compare to the competitors in the Natural Gas Utilities industry. The sustainable margins have also helped Dominion Energy Midstream to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Dominion Energy Midstream 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.
Organizational Resilience of Dominion Energy Midstream
– The covid-19 pandemic has put organizational resilience at the centre of everthing Dominion Energy Midstream 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
– Dominion Energy Midstream has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dominion Energy Midstream 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.
Digital Transformation in Natural Gas Utilities industry
- digital transformation varies from industry to industry. For Dominion Energy Midstream digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dominion Energy Midstream 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.
Superior customer experience
– The customer experience strategy of Dominion Energy Midstream in Natural Gas Utilities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Dominion Energy Midstream 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.
Low bargaining power of suppliers
– Suppliers of Dominion Energy Midstream in the Utilities sector have low bargaining power. Dominion Energy Midstream has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dominion Energy Midstream to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Dominion Energy Midstream | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dominion Energy Midstream are -
Products dominated business model
– Even though Dominion Energy Midstream has some of the most successful models in the Natural Gas Utilities industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Dominion Energy Midstream should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– From the 10K / annual statement of Dominion Energy Midstream, it seems that company is thinking out the frontier risks that can impact Natural Gas Utilities industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Skills based hiring in Natural Gas Utilities industry
– The stress on hiring functional specialists at Dominion Energy Midstream 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 Natural Gas Utilities industry
– because of the regulatory requirements in United States, Dominion Energy Midstream 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dominion Energy Midstream is slow explore the new channels of communication. These new channels of communication can help Dominion Energy Midstream to provide better information regarding Natural Gas Utilities products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Dominion Energy Midstream has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Natural Gas Utilities industry over the last five years. Dominion Energy Midstream 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.
High cash cycle compare to competitors
Dominion Energy Midstream has a high cash cycle compare to other players in the Natural Gas Utilities industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Dominion Energy Midstream 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.
Interest costs
– Compare to the competition, Dominion Energy Midstream 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.
High operating costs
– Compare to the competitors, Dominion Energy Midstream has high operating costs in the Natural Gas Utilities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Dominion Energy Midstream lucrative customers.
Need for greater diversity
– Dominion Energy Midstream has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Dominion Energy Midstream Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Dominion Energy Midstream are -
Creating value in data economy
– The success of analytics program of Dominion Energy Midstream has opened avenues for new revenue streams for the organization in Natural Gas Utilities industry. This can help Dominion Energy Midstream to build a more holistic ecosystem for Dominion Energy Midstream products in the Natural Gas Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Dominion Energy Midstream to increase its market reach. Dominion Energy Midstream 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.
Leveraging digital technologies
– Dominion Energy Midstream 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
– Dominion Energy Midstream can improve the customer journey of consumers in the Natural Gas Utilities 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.
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 Dominion Energy Midstream in the Natural Gas Utilities industry. Now Dominion Energy Midstream 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, Dominion Energy Midstream can use these opportunities to build new business models that can help the communities that Dominion Energy Midstream operates in. Secondly it can use opportunities from government spending in Natural Gas Utilities sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dominion Energy Midstream 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dominion Energy Midstream is facing challenges because of the dominance of functional experts in the organization. Dominion Energy Midstream 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
– Dominion Energy Midstream 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 Dominion Energy Midstream to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dominion Energy Midstream to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Natural Gas Utilities industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Dominion Energy Midstream 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. Dominion Energy Midstream 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dominion Energy Midstream 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 Dominion Energy Midstream to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Dominion Energy Midstream can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Dominion Energy Midstream can develop new processes and procedures in Natural Gas Utilities 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.
Threats Dominion Energy Midstream External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Dominion Energy Midstream are -
High dependence on third party suppliers
– Dominion Energy Midstream 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.
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.
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.
Consumer confidence and its impact on Dominion Energy Midstream 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.
Stagnating economy with rate increase
– Dominion Energy Midstream 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 Natural Gas Utilities industry.
Shortening product life cycle
– it is one of the major threat that Dominion Energy Midstream is facing in Natural Gas Utilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dominion Energy Midstream 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dominion Energy Midstream 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 Dominion Energy Midstream prominent markets.
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. Dominion Energy Midstream 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
– Dominion Energy Midstream 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 Natural Gas Utilities industry regulations.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Dominion Energy Midstream.
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 Dominion Energy Midstream in the Natural Gas Utilities sector and impact the bottomline of the organization.
Increasing wage structure of Dominion Energy Midstream
– 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 Dominion Energy Midstream.
Weighted SWOT Analysis of Dominion Energy Midstream Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Dominion Energy Midstream 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 Dominion Energy Midstream 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 Dominion Energy Midstream 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 Dominion Energy Midstream 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 Dominion Energy Midstream needs to make to build a sustainable competitive advantage.