Oil States International, Inc. SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by Oil States International, Inc. 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) Oil States International, Inc. is facing in its current business environment.

The Oil States International, Inc. is one of the leading companies in its industry. Oil States International, Inc. maintains its prominent position in market by carefully 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Oil States International, Inc. to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Oil States International, Inc. swot analysis / matrix

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect Oil States International, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Oil States International, Inc. SWOT Analysis

Strengths of Oil States International, Inc. – Internal Strategic Factors

As one of the leading companies in its industry, Oil States International, Inc. 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 Oil States International, Inc. are –

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  • Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
  • 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.
  • Automation of activities brought consistency of quality to Oil States International, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Successful track record of developing new products – product innovation.
  • Strong distribution network – Over the years Oil States International, Inc. has built a reliable distribution network that can reach majority of its potential market.
  • Superb Performance in New Markets – Oil States International, Inc. 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.
  • Strong Free Cash Flow – Oil States International, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • 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 Oil States International, Inc. – Internal Strategic Factors

Weakness are the areas where Oil States International, Inc. 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.

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  • 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.
  • 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 Oil States International, Inc.
  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Oil States International, Inc. 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.
  • 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 Oil States International, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • Limited success outside core business – Even though Oil States International, Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Oil States International, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though Oil States International, Inc. 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 Oil States International, Inc. – External Strategic Factors

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  • The new technology provides an opportunity to Oil States International, Inc. 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.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Oil States International, Inc. to increase its profitability.
  • New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Oil States International, Inc. to drive home its advantage in new technology and gain market share in the new product category.
  • Government green drive also opens an opportunity for procurement of Oil States International, Inc. products by the state as well as federal government contractors.
  • New trends in the consumer behavior can open up new market for the Oil States International, Inc. . 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 Oil States International, Inc..
  • 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 Oil States International, Inc. in other product categories.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Oil States International, Inc. an opportunity to enter a new emerging market.

Threats Oil States International, Inc. Facing - External Strategic Factors

  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Oil States International, Inc.
  • Liability laws in different countries are different and Oil States International, Inc. may be exposed to various liability claims given change in policies in those markets.
  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • Imitation of the counterfeit and low quality product is also a threat to Oil States International, Inc.’s product especially in the emerging markets and low income markets.
  • 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 Oil States International, Inc.   in those markets.
  • Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
  • 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.

Limitations of SWOT Analysis for Oil States International, Inc.

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 Oil States International, Inc.
  • 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 Oil States International, Inc.

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 Oil States International, Inc. 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 Oil States International, Inc.

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)