Noble Energy SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by Noble Energy managers to do a situational analysis of the company . It is an important technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Noble Energy is facing in its current business environment.

The Noble Energy is one of the leading organizatations in its industry. Noble Energy maintains its dominant position in market by critically analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework facilitates an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Noble Energy to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Noble Energy swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Noble Energy strengths, and eradicate its weaknesses.

Step by Step Guide to Noble Energy SWOT Analysis

Strengths of Noble Energy – Internal Strategic Factors

As one of the leading organizations in its industry, Noble Energy has numerous strengths that help it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Noble Energy are –

  • Strong Free Cash Flow – Noble Energy has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Automation of activities brought consistency of quality to Noble Energy products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
  • Good Returns on Capital Expenditure – Noble Energy is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Highly skilled workforce through successful training and learning programs. Noble Energy is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
  • Highly successful at Go To Market strategies for its products.
  • Strong Brand Portfolio – Over the years Noble Energy has invested in building a strong brand portfolio. The SWOT analysis of Noble Energy just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.

Weakness of Noble Energy – Internal Strategic Factors

Weakness are the areas where Noble Energy can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

  • Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that Noble Energy is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Noble Energy has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though Noble Energy is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
  • The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
  • There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Noble Energy is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • The profitability ratio and Net Contribution % of Noble Energy are below the industry average.

Opportunities for Noble Energy – External Strategic Factors

  • Government green drive also opens an opportunity for procurement of Noble Energy products by the state as well as federal government contractors.
  • Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Noble Energy in other product categories.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Noble Energy.
  • The new technology provides an opportunity to Noble Energy to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
  • New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for Noble Energy. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Noble Energy to increase its profitability.
  • The market development will lead to dilution of competitor’s advantage and enable Noble Energy to increase its competitiveness compare to the other competitors.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Noble Energy to capture new customers and increase its market share.

Threats Noble Energy Facing - External Strategic Factors

  • Liability laws in different countries are different and Noble Energy may be exposed to various liability claims given change in policies in those markets.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Noble Energy   in those markets.
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
  • New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
  • As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.
  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Noble Energy
  • No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
  • Imitation of the counterfeit and low quality product is also a threat to Noble Energy’s product especially in the emerging markets and low income markets.

Limitations of SWOT Analysis for Noble Energy

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

  • Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
  • SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
  • The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Noble Energy
  • SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
  • SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

Weighted SWOT Analysis of Noble Energy

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Noble Energy managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Noble Energy

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

  • M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
  • A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
  • O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
  • L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
  • R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)