ONEOK Partners, L.P. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by ONEOK Partners, L.P. managers to do a situational analysis of the firm . It is an important technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) ONEOK Partners, L.P. is facing in its current business environment.

The ONEOK Partners, L.P. is one of the leading organizatations in its industry. ONEOK Partners, L.P. 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 firm 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 helps the managers of the ONEOK Partners, L.P. to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
ONEOK Partners, L.P. 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 ONEOK Partners, L.P. strengths, and eradicate its weaknesses.

Step by Step Guide to ONEOK Partners, L.P. SWOT Analysis

Strengths of ONEOK Partners, L.P. – Internal Strategic Factors

As one of the leading firms in its industry, ONEOK Partners, L.P. 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 ONEOK Partners, L.P. are –

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  • 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.
  • Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
  • Strong distribution network – Over the years ONEOK Partners, L.P. has built a reliable distribution network that can reach majority of its potential market.
  • Automation of activities brought consistency of quality to ONEOK Partners, L.P. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Highly skilled workforce through successful training and learning programs. ONEOK Partners, L.P. 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.
  • Superb Performance in New Markets – ONEOK Partners, L.P. 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 Brand Portfolio – Over the years ONEOK Partners, L.P. has invested in building a strong brand portfolio. The SWOT analysis of ONEOK Partners, L.P. 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 ONEOK Partners, L.P. – Internal Strategic Factors

Weakness are the areas where ONEOK Partners, L.P. can improve upon. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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  • 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 ONEOK Partners, L.P. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
  • 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.
  • The profitability ratio and Net Contribution % of ONEOK Partners, L.P. are below the industry average.
  • Limited success outside core business – Even though ONEOK Partners, L.P. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, ONEOK Partners, L.P. 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 ONEOK Partners, L.P. – External Strategic Factors

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  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided ONEOK Partners, L.P. an opportunity to enter a new emerging market.
  • 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 ONEOK Partners, L.P.. 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 technology provides an opportunity to ONEOK Partners, L.P. 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.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of ONEOK Partners, L.P.’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
  • 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 ONEOK Partners, L.P. in other product categories.
  • 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 ONEOK Partners, L.P. to drive home its advantage in new technology and gain market share in the new product category.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as ONEOK Partners, L.P. to increase its profitability.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of ONEOK Partners, L.P..

Threats ONEOK Partners, L.P. Facing - External Strategic Factors

  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for ONEOK Partners, L.P.   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.
  • 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.
  • The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
  • Rising raw material can pose a threat to the ONEOK Partners, L.P. profitability.
  • 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.
  • Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.

Limitations of SWOT Analysis for ONEOK Partners, L.P.

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 ONEOK Partners, L.P.
  • 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 ONEOK Partners, L.P.

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 ONEOK Partners, L.P. 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 ONEOK Partners, L.P.

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)