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PrimeEnergy (PNRG) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for PrimeEnergy (United States)


Based on various researches at Oak Spring University , PrimeEnergy is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing energy prices, increasing transportation and logistics costs, 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, etc



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Introduction to SWOT Analysis of PrimeEnergy


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that PrimeEnergy can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the PrimeEnergy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which PrimeEnergy 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 PrimeEnergy can be done for the following purposes –
1. Strategic planning of PrimeEnergy
2. Improving business portfolio management of PrimeEnergy
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 PrimeEnergy




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

The strengths of PrimeEnergy are -

Cross disciplinary teams

– Horizontal connected teams at the PrimeEnergy 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.

Low bargaining power of suppliers

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

Operational resilience

– The operational resilience strategy of PrimeEnergy comprises – understanding the underlying the factors in the Oil & Gas Operations 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.

Effective Research and Development (R&D)

– PrimeEnergy has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – PrimeEnergy 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 recruit top talent

– PrimeEnergy is one of the leading players in the Oil & Gas Operations 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.

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

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

Organizational Resilience of PrimeEnergy

– The covid-19 pandemic has put organizational resilience at the centre of everthing PrimeEnergy 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

– PrimeEnergy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. PrimeEnergy 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 Oil & Gas Operations industry

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

Highly skilled collaborators

– PrimeEnergy has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Oil & Gas Operations industry. Secondly the value chain collaborators of PrimeEnergy have helped the firm to develop new products and bring them quickly to the marketplace.

Sustainable margins compare to other players in Oil & Gas Operations industry

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

Ability to lead change in Oil & Gas Operations

– PrimeEnergy 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 PrimeEnergy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.






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

The weaknesses of PrimeEnergy are -

Skills based hiring in Oil & Gas Operations industry

– The stress on hiring functional specialists at PrimeEnergy 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 cash cycle compare to competitors

PrimeEnergy 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.

Need for greater diversity

– PrimeEnergy 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.

Capital Spending Reduction

– Even during the low interest decade, PrimeEnergy 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.

Increasing silos among functional specialists

– The organizational structure of PrimeEnergy is dominated by functional specialists. It is not different from other players in the Oil & Gas Operations industry, but PrimeEnergy needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help PrimeEnergy to focus more on services in the Oil & Gas Operations industry rather than just following the product 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 PrimeEnergy supply chain. Even after few cautionary changes, PrimeEnergy is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left PrimeEnergy vulnerable to further global disruptions in South East Asia.

Lack of clear differentiation of PrimeEnergy products

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

High dependence on PrimeEnergy ‘s star products

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

High bargaining power of channel partners in Oil & Gas Operations industry

– because of the regulatory requirements in United States, PrimeEnergy 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.

Employees’ less understanding of PrimeEnergy strategy

– From the outside it seems that the employees of PrimeEnergy 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.

Interest costs

– Compare to the competition, PrimeEnergy 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.




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


The opportunities of PrimeEnergy are -

Using analytics as competitive advantage

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

Lowering marketing communication costs

– 5G expansion will open new opportunities for PrimeEnergy 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.

Developing new processes and practices

– PrimeEnergy can develop new processes and procedures in Oil & Gas Operations 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.

Learning at scale

– Online learning technologies has now opened space for PrimeEnergy 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.

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 PrimeEnergy in the Oil & Gas Operations industry. Now PrimeEnergy can target international markets with far fewer capital restrictions requirements than the existing system.

Building a culture of innovation

– managers at PrimeEnergy 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.

Redefining models of collaboration and team work

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

Low interest rates

– Even though inflation is raising its head in most developed economies, PrimeEnergy 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, PrimeEnergy can use these opportunities to build new business models that can help the communities that PrimeEnergy operates in. Secondly it can use opportunities from government spending in Oil & Gas Operations sector.

Manufacturing automation

– PrimeEnergy 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects PrimeEnergy can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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. PrimeEnergy 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. PrimeEnergy 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.

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




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


The threats of PrimeEnergy 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 PrimeEnergy business can come under increasing regulations regarding data privacy, data security, etc.

Stagnating economy with rate increase

– PrimeEnergy 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 Oil & Gas Operations industry.

Consumer confidence and its impact on PrimeEnergy 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 Oil & Gas Operations industry and other sectors.

Environmental challenges

– PrimeEnergy 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. PrimeEnergy can take advantage of this fund but it will also bring new competitors in the Oil & Gas Operations industry.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for PrimeEnergy 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.

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.

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 PrimeEnergy.

Shortening product life cycle

– it is one of the major threat that PrimeEnergy is facing in Oil & Gas Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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. PrimeEnergy needs to understand the core reasons impacting the Oil & Gas Operations industry. This will help it in building a better workplace.

Technology acceleration in Forth Industrial Revolution

– PrimeEnergy has witnessed rapid integration of technology during Covid-19 in the Oil & Gas Operations industry. As one of the leading players in the industry, PrimeEnergy needs to keep up with the evolution of technology in the Oil & Gas Operations 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.

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 PrimeEnergy in the Oil & Gas Operations sector and impact the bottomline of the organization.

Easy access to finance

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

Regulatory challenges

– PrimeEnergy 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.




Weighted SWOT Analysis of PrimeEnergy Template, Example


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



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