SWOT Analysis / TOWS Matrix for Surgutneftegaz OAO (United States)
Based on various researches at Oak Spring University , Surgutneftegaz OAO is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels,
increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Surgutneftegaz OAO
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Surgutneftegaz OAO can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Surgutneftegaz OAO, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Surgutneftegaz OAO 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 Surgutneftegaz OAO can be done for the following purposes –
1. Strategic planning of Surgutneftegaz OAO
2. Improving business portfolio management of Surgutneftegaz OAO
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 Surgutneftegaz OAO
Strengths of Surgutneftegaz OAO | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Surgutneftegaz OAO are -
Sustainable margins compare to other players in industry
– Surgutneftegaz OAO has clearly differentiated products in the market place. This has enabled Surgutneftegaz OAO to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Surgutneftegaz OAO to invest into research and development (R&D) and innovation.
Strong track record of project management in the industry
– Surgutneftegaz OAO is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in industry
- digital transformation varies from industry to industry. For Surgutneftegaz OAO digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Surgutneftegaz OAO 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.
Effective Research and Development (R&D)
– Surgutneftegaz OAO has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Surgutneftegaz OAO staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Surgutneftegaz OAO in the sector have low bargaining power. Surgutneftegaz OAO has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Surgutneftegaz OAO to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Surgutneftegaz OAO 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.
Analytics focus
– Surgutneftegaz OAO is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure of United States is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Highly skilled collaborators
– Surgutneftegaz OAO 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 Surgutneftegaz OAO have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Surgutneftegaz OAO 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 Surgutneftegaz OAO is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Surgutneftegaz OAO emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of Surgutneftegaz OAO comprises – understanding the underlying the factors in the 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 brand equity
– Surgutneftegaz OAO has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Surgutneftegaz OAO to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in
– Surgutneftegaz OAO 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 Surgutneftegaz OAO in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Surgutneftegaz OAO | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Surgutneftegaz OAO are -
High cash cycle compare to competitors
Surgutneftegaz OAO 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.
Increasing silos among functional specialists
– The organizational structure of Surgutneftegaz OAO is dominated by functional specialists. It is not different from other players in the industry, but Surgutneftegaz OAO needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Surgutneftegaz OAO to focus more on services in the industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Surgutneftegaz OAO is just above the 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.
High dependence on Surgutneftegaz OAO ‘s star products
– The top 2 products and services of Surgutneftegaz OAO still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Surgutneftegaz OAO has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that Surgutneftegaz OAO needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at Surgutneftegaz OAO can leverage the sales team experience to cultivate customer relationships as Surgutneftegaz OAO is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Surgutneftegaz OAO 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 industry using digital technology.
High bargaining power of channel partners in industry
– because of the regulatory requirements in United States, Surgutneftegaz OAO 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 industry.
Lack of clear differentiation of Surgutneftegaz OAO products
– To increase the profitability and margins on the products, Surgutneftegaz OAO needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Surgutneftegaz OAO 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.
High operating costs
– Compare to the competitors, Surgutneftegaz OAO 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 Surgutneftegaz OAO lucrative customers.
Slow to strategic competitive environment developments
– As Surgutneftegaz OAO 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.
Surgutneftegaz OAO Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Surgutneftegaz OAO are -
Buying journey improvements
– Surgutneftegaz OAO can improve the customer journey of consumers in the 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.
Building a culture of innovation
– managers at Surgutneftegaz OAO 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 industry.
Loyalty marketing
– Surgutneftegaz OAO 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Surgutneftegaz OAO can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Surgutneftegaz OAO can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Surgutneftegaz OAO to increase its market reach. Surgutneftegaz OAO 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Surgutneftegaz OAO 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.
Using analytics as competitive advantage
– Surgutneftegaz OAO 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 Surgutneftegaz OAO to build a competitive advantage using analytics. The analytics driven competitive advantage can help Surgutneftegaz OAO 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 industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Surgutneftegaz OAO 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. Surgutneftegaz OAO 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.
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. Surgutneftegaz OAO can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Surgutneftegaz OAO 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Surgutneftegaz OAO 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 Surgutneftegaz OAO to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Surgutneftegaz OAO has opened avenues for new revenue streams for the organization in industry. This can help Surgutneftegaz OAO to build a more holistic ecosystem for Surgutneftegaz OAO products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Surgutneftegaz OAO External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Surgutneftegaz OAO are -
Increasing wage structure of Surgutneftegaz OAO
– 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 Surgutneftegaz OAO.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Surgutneftegaz OAO 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 Surgutneftegaz OAO prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Surgutneftegaz OAO 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.
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 Surgutneftegaz OAO in the sector and impact the bottomline 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 Surgutneftegaz OAO.
Stagnating economy with rate increase
– Surgutneftegaz OAO 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.
Consumer confidence and its impact on Surgutneftegaz OAO 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.
High dependence on third party suppliers
– Surgutneftegaz OAO 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. Surgutneftegaz OAO needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
Environmental challenges
– Surgutneftegaz OAO 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. Surgutneftegaz OAO can take advantage of this fund but it will also bring new competitors in the industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Surgutneftegaz OAO with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Weighted SWOT Analysis of Surgutneftegaz OAO Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Surgutneftegaz OAO 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 Surgutneftegaz OAO 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 Surgutneftegaz OAO 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 Surgutneftegaz OAO 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 Surgutneftegaz OAO needs to make to build a sustainable competitive advantage.
