Based on various researches at Oak Spring University , Skye Petroleum Inc is operating in a macro-environment that has been destablized by – geopolitical disruptions, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic ,
increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, etc
Introduction to SWOT Analysis of Skye Petroleum Inc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Skye Petroleum Inc can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Skye Petroleum Inc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Skye Petroleum Inc 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 Skye Petroleum Inc can be done for the following purposes –
1. Strategic planning of Skye Petroleum Inc
2. Improving business portfolio management of Skye Petroleum Inc
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 Skye Petroleum Inc
Strengths of Skye Petroleum Inc | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Skye Petroleum Inc are -
Diverse revenue streams
– Skye Petroleum Inc is present in almost all the verticals within the industry. This has provided Skye Petroleum Inc a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Cross disciplinary teams
– Horizontal connected teams at the Skye Petroleum Inc 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.
Superior customer experience
– The customer experience strategy of Skye Petroleum Inc in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management in the industry
– Skye Petroleum Inc is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Skye Petroleum Inc has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Skye Petroleum Inc 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 Skye Petroleum Inc in the sector have low bargaining power. Skye Petroleum Inc has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Skye Petroleum Inc to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in industry
– Skye Petroleum Inc has clearly differentiated products in the market place. This has enabled Skye Petroleum Inc to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Skye Petroleum Inc to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Skye Petroleum Inc 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.
High switching costs
– The high switching costs that Skye Petroleum Inc 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.
Innovation driven organization
– Skye Petroleum Inc is one of the most innovative firm in sector.
Organizational Resilience of Skye Petroleum Inc
– The covid-19 pandemic has put organizational resilience at the centre of everthing Skye Petroleum Inc does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Skye Petroleum Inc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Skye Petroleum Inc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Skye Petroleum Inc | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Skye Petroleum Inc are -
Workers concerns about automation
– As automation is fast increasing in the industry, Skye Petroleum Inc needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Products dominated business model
– Even though Skye Petroleum Inc 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. Skye Petroleum Inc should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative at Skye Petroleum Inc, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Skye Petroleum Inc has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ less understanding of Skye Petroleum Inc strategy
– From the outside it seems that the employees of Skye Petroleum Inc 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.
Need for greater diversity
– Skye Petroleum Inc 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.
Lack of clear differentiation of Skye Petroleum Inc products
– To increase the profitability and margins on the products, Skye Petroleum Inc needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Skye Petroleum Inc supply chain. Even after few cautionary changes, Skye Petroleum Inc is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Skye Petroleum Inc vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of United States, Skye Petroleum Inc needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Skye Petroleum Inc 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.
Slow decision making process
– As mentioned earlier in the report, Skye Petroleum Inc has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Skye Petroleum Inc 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.
Increasing silos among functional specialists
– The organizational structure of Skye Petroleum Inc is dominated by functional specialists. It is not different from other players in the industry, but Skye Petroleum Inc needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Skye Petroleum Inc to focus more on services in the industry rather than just following the product oriented approach.
Skye Petroleum Inc Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Skye Petroleum Inc are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Skye Petroleum Inc is facing challenges because of the dominance of functional experts in the organization. Skye Petroleum Inc 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Skye Petroleum Inc can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Skye Petroleum Inc 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 Skye Petroleum Inc to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Skye Petroleum Inc 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.
Better consumer reach
– The expansion of the 5G network will help Skye Petroleum Inc to increase its market reach. Skye Petroleum Inc 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
– Skye Petroleum Inc 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.
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. Skye Petroleum Inc can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Skye Petroleum Inc in the industry. Now Skye Petroleum Inc can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Skye Petroleum Inc 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.
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 Skye Petroleum Inc 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 Skye Petroleum Inc 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 Skye Petroleum Inc to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Skye Petroleum Inc 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.
Loyalty marketing
– Skye Petroleum Inc 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.
Threats Skye Petroleum Inc External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Skye Petroleum Inc 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 Skye Petroleum Inc business can come under increasing regulations regarding data privacy, data security, etc.
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 Skye Petroleum Inc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Skye Petroleum Inc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Skye Petroleum Inc needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Skye Petroleum Inc 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.
Regulatory challenges
– Skye Petroleum Inc 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 industry regulations.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Skye Petroleum Inc 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.
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. Skye Petroleum Inc 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.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Skye Petroleum Inc can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Skye Petroleum Inc 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.
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.
Environmental challenges
– Skye Petroleum Inc 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. Skye Petroleum Inc can take advantage of this fund but it will also bring new competitors in the industry.
Weighted SWOT Analysis of Skye Petroleum Inc Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Skye Petroleum Inc 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 Skye Petroleum Inc 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 Skye Petroleum Inc 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 Skye Petroleum Inc 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 Skye Petroleum Inc needs to make to build a sustainable competitive advantage.
