Contango Oil & Gas Company SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Contango Oil & Gas Company is one of the leading companies in its industry. Contango Oil & Gas Company 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.

Order Now - Contango Oil & Gas Company SWOT Analysis
Check out- Contango Oil & Gas Company PESTEL / PEST & Environment Analysis
Article continues after advertisement

The SWOT Analysis framework enables 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Contango Oil & Gas Company to develop four types of strategies:

SO (strengths-opportunities) Strategies
WO (weaknesses-opportunities) Strategies
ST (strengths-threats) Strategies
WT (weaknesses-threats) Strategies

Contango Oil & Gas Company swot analysis / matrix

SWOT Matrix Strategies Objective

The primary purpose of SWOT matrix is to identify the strategies that a company can utilize to exploit external opportunities, counter threats, and build on & protect Contango Oil & Gas Company strengths, and eradicate its weaknesses.

Step by Step Guide to Contango Oil & Gas Company SWOT Analysis

Strengths of Contango Oil & Gas Company – Internal Strategic Factors

As one of the leading companies in its industry, Contango Oil & Gas Company 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 Contango Oil & Gas Company are –

Read - Contango Oil & Gas Company Porter 5 Forces Analysis & Industry Analysis
Article continues after advertisement

Strong Brand Portfolio – Over the years Contango Oil & Gas Company has invested in building a strong brand portfolio. The SWOT analysis of Contango Oil & Gas Company just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
Superb Performance in New Markets – Contango Oil & Gas Company has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
Successful track record of developing new products – product innovation.
Good Returns on Capital Expenditure – Contango Oil & Gas Company is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
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.
Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
Highly skilled workforce through successful training and learning programs. Contango Oil & Gas Company 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.
Strong Free Cash Flow – Contango Oil & Gas Company has strong free cash flows that provide resources in the hand of the company to expand into new projects.

Weakness of Contango Oil & Gas Company – Internal Strategic Factors

Weakness are the areas where Contango Oil & Gas Company 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.

Article continues after advertisement

High attrition rate in work force – compare to other organizations in the industry Contango Oil & Gas Company has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Contango Oil & Gas Company
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.
The profitability ratio and Net Contribution % of Contango Oil & Gas Company are below the industry average.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though Contango Oil & Gas Company is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
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 Contango Oil & Gas Company is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Contango Oil & Gas Company 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.

Opportunities for Contango Oil & Gas Company – External Strategic Factors

Article continues after advertisement

New trends in the consumer behavior can open up new market for the Contango Oil & Gas Company . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Contango Oil & Gas Company.
The market development will lead to dilution of competitor’s advantage and enable Contango Oil & Gas Company to increase its competitiveness compare to the other competitors.
The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Contango Oil & Gas Company to increase its profitability.
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Contango Oil & Gas Company an opportunity to enter a new emerging market.
The new technology provides an opportunity to Contango Oil & Gas Company 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 Contango Oil & Gas Company. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
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 Contango Oil & Gas Company in other product categories.

Threats Contango Oil & Gas Company Facing - External Strategic Factors

New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Contango Oil & Gas Company
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.
Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
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.
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.
The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Contango Oil & Gas Company in those markets.

Limitations of SWOT Analysis for Contango Oil & Gas Company

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 Contango Oil & Gas Company
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.

Article continues after advertisement

Weighted SWOT Analysis of Contango Oil & Gas Company

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 Contango Oil & Gas Company 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 Contango Oil & Gas Company

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.

Buy Custom Essay and Term Paper on SWOT Analysis / Matrix , Weighted SWOT Analysis of Contango Oil & Gas Company

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)