El Paso Energy Capital Trust I (EP_pc) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for El Paso Energy Capital Trust I (United States)
Based on various researches at Oak Spring University , El Paso Energy Capital Trust I is operating in a macro-environment that has been destablized by – increasing commodity prices, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, supply chains are disrupted by pandemic ,
increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of El Paso Energy Capital Trust I
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that El Paso Energy Capital Trust I can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the El Paso Energy Capital Trust I, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which El Paso Energy Capital Trust I 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 El Paso Energy Capital Trust I can be done for the following purposes –
1. Strategic planning of El Paso Energy Capital Trust I
2. Improving business portfolio management of El Paso Energy Capital Trust I
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of El Paso Energy Capital Trust I
Strengths of El Paso Energy Capital Trust I | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of El Paso Energy Capital Trust I are -
Highly skilled collaborators
– El Paso Energy Capital Trust I has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of El Paso Energy Capital Trust I have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- El Paso Energy Capital Trust I is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at El Paso Energy Capital Trust I is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at El Paso Energy Capital Trust I emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– El Paso Energy Capital Trust I is one of the leading players in the 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.
Cross disciplinary teams
– Horizontal connected teams at the El Paso Energy Capital Trust I 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.
Effective Research and Development (R&D)
– El Paso Energy Capital Trust I has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – El Paso Energy Capital Trust I staying ahead in the 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
– El Paso Energy Capital Trust I is one of the leading players in the industry in United States. Over the years it has not only transformed the business landscape in the industry in United States but also across the existing markets. The ability to lead change has enabled El Paso Energy Capital Trust I in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– El Paso Energy Capital Trust I has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled El Paso Energy Capital Trust I to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– El Paso Energy Capital Trust I has one of the best training and development program in 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.
Digital Transformation in industry
- digital transformation varies from industry to industry. For El Paso Energy Capital Trust I digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. El Paso Energy Capital Trust I 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.
Strong track record of project management in the industry
– El Paso Energy Capital Trust I is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that El Paso Energy Capital Trust I has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Successful track record of launching new products
– El Paso Energy Capital Trust I has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. El Paso Energy Capital Trust I 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.
Weaknesses of El Paso Energy Capital Trust I | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of El Paso Energy Capital Trust I are -
High dependence on El Paso Energy Capital Trust I ‘s star products
– The top 2 products and services of El Paso Energy Capital Trust I still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though El Paso Energy Capital Trust I has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of El Paso Energy Capital Trust I, it seems that company is thinking out the frontier risks that can impact 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.
Employees’ less understanding of El Paso Energy Capital Trust I strategy
– From the outside it seems that the employees of El Paso Energy Capital Trust I 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.
Ability to respond to the competition
– As the decision making is very deliberative at El Paso Energy Capital Trust I, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. El Paso Energy Capital Trust I has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, El Paso Energy Capital Trust I 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 cash cycle compare to competitors
El Paso Energy Capital Trust I has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though El Paso Energy Capital Trust I has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. El Paso Energy Capital Trust I should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of El Paso Energy Capital Trust I is dominated by functional specialists. It is not different from other players in the industry, but El Paso Energy Capital Trust I needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help El Paso Energy Capital Trust I to focus more on services in the industry rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, El Paso Energy Capital Trust I has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract El Paso Energy Capital Trust I lucrative customers.
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 El Paso Energy Capital Trust I supply chain. Even after few cautionary changes, El Paso Energy Capital Trust I is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left El Paso Energy Capital Trust I vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As El Paso Energy Capital Trust I is one of the leading players in the industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
El Paso Energy Capital Trust I Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of El Paso Energy Capital Trust I are -
Manufacturing automation
– El Paso Energy Capital Trust I can use the latest technology developments to improve its manufacturing and designing process in 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. El Paso Energy Capital Trust I can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 El Paso Energy Capital Trust I 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for El Paso Energy Capital Trust I to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for El Paso Energy Capital Trust I to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, El Paso Energy Capital Trust I is facing challenges because of the dominance of functional experts in the organization. El Paso Energy Capital Trust I can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– El Paso Energy Capital Trust I can develop new processes and procedures in 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, El Paso Energy Capital Trust I 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.
Loyalty marketing
– El Paso Energy Capital Trust I 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, El Paso Energy Capital Trust I 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 El Paso Energy Capital Trust I to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– El Paso Energy Capital Trust I has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled El Paso Energy Capital Trust I to build a competitive advantage using analytics. The analytics driven competitive advantage can help El Paso Energy Capital Trust I to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, El Paso Energy Capital Trust I can use these opportunities to build new business models that can help the communities that El Paso Energy Capital Trust I operates in. Secondly it can use opportunities from government spending in sector.
Leveraging digital technologies
– El Paso Energy Capital Trust I 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for El Paso Energy Capital Trust I in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Threats El Paso Energy Capital Trust I External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of El Paso Energy Capital Trust I are -
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 El Paso Energy Capital Trust I business can come under increasing regulations regarding data privacy, data security, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. El Paso Energy Capital Trust I needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
Consumer confidence and its impact on El Paso Energy Capital Trust I 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 industry and other sectors.
Stagnating economy with rate increase
– El Paso Energy Capital Trust I 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 industry.
High dependence on third party suppliers
– El Paso Energy Capital Trust I 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.
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. El Paso Energy Capital Trust I 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.
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.
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 El Paso Energy Capital Trust I in the sector and impact the bottomline of the organization.
Environmental challenges
– El Paso Energy Capital Trust I 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. El Paso Energy Capital Trust I can take advantage of this fund but it will also bring new competitors in the industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for El Paso Energy Capital Trust I in industry. The 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents El Paso Energy Capital Trust I with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, El Paso Energy Capital Trust I may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
Increasing wage structure of El Paso Energy Capital Trust I
– 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 El Paso Energy Capital Trust I.
Weighted SWOT Analysis of El Paso Energy Capital Trust I Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at El Paso Energy Capital Trust I 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 El Paso Energy Capital Trust I 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 El Paso Energy Capital Trust I 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 El Paso Energy Capital Trust I 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 El Paso Energy Capital Trust I needs to make to build a sustainable competitive advantage.