PBF Logistics LP SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The PBF Logistics LP is one of the leading organizatations in its industry. PBF Logistics LP maintains its prominent 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 firm such as – marketing, finance, operations, management information systems and strategic planning.

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The SWOT Analysis framework helps 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 PBF Logistics LP to develop four types of strategies:

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

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect PBF Logistics LP strengths, and eradicate its weaknesses.

Step by Step Guide to PBF Logistics LP SWOT Analysis

Strengths of PBF Logistics LP – Internal Strategic Factors

As one of the leading firms in its industry, PBF Logistics LP 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 PBF Logistics LP are –

Read - PBF Logistics LP Porter 5 Forces Analysis & Industry Analysis
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Automation of activities brought consistency of quality to PBF Logistics LP products and has enabled the company to scale up and scale down based on the demand conditions in the market.
Strong distribution network – Over the years PBF Logistics LP has built a reliable distribution network that can reach majority of its potential market.
Superb Performance in New Markets – PBF Logistics LP 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 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.
Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
Highly successful at Go To Market strategies for its products.
Strong Brand Portfolio – Over the years PBF Logistics LP has invested in building a strong brand portfolio. The SWOT analysis of PBF Logistics LP just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
Good Returns on Capital Expenditure – PBF Logistics LP is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

Weakness of PBF Logistics LP – Internal Strategic Factors

Weakness are the areas where PBF Logistics LP 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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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 PBF Logistics LP are below the industry average.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though PBF Logistics LP is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
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.
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.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
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 PBF Logistics LP is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.

Opportunities for PBF Logistics LP – External Strategic Factors

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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 PBF Logistics LP in other product categories.
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.
Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for PBF Logistics LP to capture new customers and increase its market share.
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 PBF Logistics LP to drive home its advantage in new technology and gain market share in the new product category.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of PBF Logistics LP.
The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as PBF Logistics LP to increase its profitability.
The market development will lead to dilution of competitor’s advantage and enable PBF Logistics LP to increase its competitiveness compare to the other competitors.
Government green drive also opens an opportunity for procurement of PBF Logistics LP products by the state as well as federal government contractors.

Threats PBF Logistics LP Facing - External Strategic Factors

Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
Liability laws in different countries are different and PBF Logistics LP 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.
Rising raw material can pose a threat to the PBF Logistics LP 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.
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.

Limitations of SWOT Analysis for PBF Logistics LP

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 PBF Logistics LP
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 PBF Logistics LP

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 PBF Logistics LP 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 PBF Logistics LP

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)