Hugoton Royalty Trust SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a vital strategic planning tool that can be used by Hugoton Royalty Trust managers to do a situational analysis of the organization . It is a handy technique to understand the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Hugoton Royalty Trust is facing in its current business environment.

The Hugoton Royalty Trust is one of the leading companies in its industry. Hugoton Royalty Trust maintains its dominant position in market by critically analyzing and reviewing the SWOT analysis.  SWOT analysis a highly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.

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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 enables the managers of the Hugoton Royalty Trust to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Hugoton Royalty Trust swot analysis / matrix

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect Hugoton Royalty Trust strengths, and eradicate its weaknesses.

Step by Step Guide to Hugoton Royalty Trust SWOT Analysis

Strengths of Hugoton Royalty Trust – Internal Strategic Factors

As one of the leading firms in its industry, Hugoton Royalty Trust has numerous strengths that enable 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 Hugoton Royalty Trust are –

Read - Hugoton Royalty Trust Porter 5 Forces Analysis & Industry Analysis
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  • Highly successful at Go To Market strategies for its products.
  • Strong Brand Portfolio – Over the years Hugoton Royalty Trust has invested in building a strong brand portfolio. The SWOT analysis of Hugoton Royalty Trust just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Highly skilled workforce through successful training and learning programs. Hugoton Royalty Trust 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.
  • Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
  • Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
  • Automation of activities brought consistency of quality to Hugoton Royalty Trust products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • 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.
  • Strong Free Cash Flow – Hugoton Royalty Trust has strong free cash flows that provide resources in the hand of the company to expand into new projects.

Weakness of Hugoton Royalty Trust – Internal Strategic Factors

Weakness are the areas where Hugoton Royalty Trust can improve upon. Strategy is about making choices and weakness are the areas where an organization can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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  • Limited success outside core business – Even though Hugoton Royalty Trust is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Hugoton Royalty Trust needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
  • High attrition rate in work force – compare to other organizations in the industry Hugoton Royalty Trust has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
  • 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.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though Hugoton Royalty Trust 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.

Opportunities for Hugoton Royalty Trust – External Strategic Factors

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  • New trends in the consumer behavior can open up new market for the Hugoton Royalty Trust . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Hugoton Royalty Trust an opportunity to enter a new emerging market.
  • The new technology provides an opportunity to Hugoton Royalty Trust 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.
  • Government green drive also opens an opportunity for procurement of Hugoton Royalty Trust 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 Hugoton Royalty Trust 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 Hugoton Royalty Trust.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Hugoton Royalty Trust to capture new customers and increase its market share.

Threats Hugoton Royalty Trust Facing - External Strategic Factors

  • Imitation of the counterfeit and low quality product is also a threat to Hugoton Royalty Trust’s product especially in the emerging markets and low income markets.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Hugoton Royalty Trust   in those markets.
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
  • Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
  • 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.
  • 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.
  • Liability laws in different countries are different and Hugoton Royalty Trust may be exposed to various liability claims given change in policies in those markets.
  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.

Limitations of SWOT Analysis for Hugoton Royalty Trust

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 Hugoton Royalty Trust
  • 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.

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Weighted SWOT Analysis of Hugoton Royalty Trust

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 Hugoton Royalty Trust 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 Hugoton Royalty Trust

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

You can email us to get an example document of Weighted SWOT analysis.

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)