Liquefied Natural Gas (LNG) SWOT Analysis / TOWS Matrix / MBA Resources
Oil & Gas - Integrated
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Liquefied Natural Gas (Australia)
Based on various researches at Oak Spring University , Liquefied Natural Gas is operating in a macro-environment that has been destablized by – wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, technology disruption, talent flight as more people leaving formal jobs,
customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Liquefied Natural Gas
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Liquefied Natural Gas can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Liquefied Natural Gas, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Liquefied Natural Gas 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 Liquefied Natural Gas can be done for the following purposes –
1. Strategic planning of Liquefied Natural Gas
2. Improving business portfolio management of Liquefied Natural Gas
3. Assessing feasibility of the new initiative in Australia
4. Making a Oil & Gas - Integrated sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Liquefied Natural Gas
Strengths of Liquefied Natural Gas | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Liquefied Natural Gas are -
Superior customer experience
– The customer experience strategy of Liquefied Natural Gas in Oil & Gas - Integrated industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Liquefied Natural Gas in the Energy sector have low bargaining power. Liquefied Natural Gas has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Liquefied Natural Gas to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Oil & Gas - Integrated industry
- digital transformation varies from industry to industry. For Liquefied Natural Gas digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Liquefied Natural Gas 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.
Learning organization
- Liquefied Natural Gas 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 Liquefied Natural Gas is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Liquefied Natural Gas emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Liquefied Natural Gas is one of the leading players in the Oil & Gas - Integrated industry in Australia. It is in a position to attract the best talent available in Australia. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Liquefied Natural Gas has one of the best training and development program in Energy 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.
Ability to lead change in Oil & Gas - Integrated
– Liquefied Natural Gas is one of the leading players in the Oil & Gas - Integrated industry in Australia. Over the years it has not only transformed the business landscape in the Oil & Gas - Integrated industry in Australia but also across the existing markets. The ability to lead change has enabled Liquefied Natural Gas in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Liquefied Natural Gas 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.
Diverse revenue streams
– Liquefied Natural Gas is present in almost all the verticals within the Oil & Gas - Integrated industry. This has provided Liquefied Natural Gas 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.
Successful track record of launching new products
– Liquefied Natural Gas has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Liquefied Natural Gas 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.
Sustainable margins compare to other players in Oil & Gas - Integrated industry
– Liquefied Natural Gas has clearly differentiated products in the market place. This has enabled Liquefied Natural Gas to fetch slight price premium compare to the competitors in the Oil & Gas - Integrated industry. The sustainable margins have also helped Liquefied Natural Gas to invest into research and development (R&D) and innovation.
High brand equity
– Liquefied Natural Gas has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Liquefied Natural Gas to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Liquefied Natural Gas | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Liquefied Natural Gas are -
Need for greater diversity
– Liquefied Natural Gas 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.
No frontier risks strategy
– From the 10K / annual statement of Liquefied Natural Gas, it seems that company is thinking out the frontier risks that can impact Oil & Gas - Integrated 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.
Workers concerns about automation
– As automation is fast increasing in the Oil & Gas - Integrated industry, Liquefied Natural Gas 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.
Lack of clear differentiation of Liquefied Natural Gas products
– To increase the profitability and margins on the products, Liquefied Natural Gas needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Liquefied Natural Gas has a high cash cycle compare to other players in the Oil & Gas - Integrated 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 Liquefied Natural Gas is dominated by functional specialists. It is not different from other players in the Oil & Gas - Integrated industry, but Liquefied Natural Gas needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Liquefied Natural Gas to focus more on services in the Oil & Gas - Integrated industry rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, Liquefied Natural Gas has high operating costs in the Oil & Gas - Integrated industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Liquefied Natural Gas lucrative customers.
Employees’ less understanding of Liquefied Natural Gas strategy
– From the outside it seems that the employees of Liquefied Natural Gas 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.
Aligning sales with marketing
– From the outside it seems that Liquefied Natural Gas needs to have more collaboration between its sales team and marketing team. Sales professionals in the Oil & Gas - Integrated industry have deep experience in developing customer relationships. Marketing department at Liquefied Natural Gas can leverage the sales team experience to cultivate customer relationships as Liquefied Natural Gas is planning to shift buying processes online.
High dependence on Liquefied Natural Gas ‘s star products
– The top 2 products and services of Liquefied Natural Gas still accounts for major business revenue. This dependence on star products in Oil & Gas - Integrated industry has resulted into insufficient focus on developing new products, even though Liquefied Natural Gas has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Liquefied Natural Gas has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Oil & Gas - Integrated industry over the last five years. Liquefied Natural Gas 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.
Liquefied Natural Gas Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Liquefied Natural Gas are -
Better consumer reach
– The expansion of the 5G network will help Liquefied Natural Gas to increase its market reach. Liquefied Natural Gas 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.
Loyalty marketing
– Liquefied Natural Gas 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.
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 Liquefied Natural Gas 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.
Leveraging digital technologies
– Liquefied Natural Gas 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
– Liquefied Natural Gas can improve the customer journey of consumers in the Oil & Gas - Integrated 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.
Using analytics as competitive advantage
– Liquefied Natural Gas has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Oil & Gas - Integrated sector. This continuous investment in analytics has enabled Liquefied Natural Gas to build a competitive advantage using analytics. The analytics driven competitive advantage can help Liquefied Natural Gas to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Liquefied Natural Gas 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.
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. Liquefied Natural Gas can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Liquefied Natural Gas 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 - Integrated industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Liquefied Natural Gas can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Liquefied Natural Gas can use the latest technology developments to improve its manufacturing and designing process in Oil & Gas - Integrated 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.
Developing new processes and practices
– Liquefied Natural Gas can develop new processes and procedures in Oil & Gas - Integrated 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Liquefied Natural Gas 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 Liquefied Natural Gas to hire the very best people irrespective of their geographical location.
Threats Liquefied Natural Gas External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Liquefied Natural Gas are -
High dependence on third party suppliers
– Liquefied Natural Gas 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Liquefied Natural Gas in Oil & Gas - Integrated industry. The Oil & Gas - Integrated 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.
Shortening product life cycle
– it is one of the major threat that Liquefied Natural Gas is facing in Oil & Gas - Integrated sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Liquefied Natural Gas 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 - Integrated industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Liquefied Natural Gas may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Oil & Gas - Integrated sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Liquefied Natural Gas 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 Liquefied Natural Gas prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Oil & Gas - Integrated industry are lowering. It can presents Liquefied Natural Gas with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Oil & Gas - Integrated sector.
Increasing wage structure of Liquefied Natural Gas
– 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 Liquefied Natural Gas.
Environmental challenges
– Liquefied Natural Gas 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. Liquefied Natural Gas can take advantage of this fund but it will also bring new competitors in the Oil & Gas - Integrated industry.
Technology acceleration in Forth Industrial Revolution
– Liquefied Natural Gas has witnessed rapid integration of technology during Covid-19 in the Oil & Gas - Integrated industry. As one of the leading players in the industry, Liquefied Natural Gas needs to keep up with the evolution of technology in the Oil & Gas - Integrated 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 Liquefied Natural Gas in the Oil & Gas - Integrated sector and impact the bottomline of the organization.
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. Liquefied Natural Gas needs to understand the core reasons impacting the Oil & Gas - Integrated industry. This will help it in building a better workplace.
Regulatory challenges
– Liquefied Natural Gas 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 - Integrated industry regulations.
Weighted SWOT Analysis of Liquefied Natural Gas Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Liquefied Natural Gas 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 Liquefied Natural Gas 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 Liquefied Natural Gas 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 Liquefied Natural Gas 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 Liquefied Natural Gas needs to make to build a sustainable competitive advantage.