SandRidge Permian Trust SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by SandRidge Permian Trust 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) SandRidge Permian Trust is facing in its current business environment.

The SandRidge Permian Trust is one of the leading organizatations in its industry. SandRidge Permian Trust maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly 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 SandRidge Permian Trust to develop four types of strategies:

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

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that an organization can use to exploit external opportunities, counter threats, and build on & protect SandRidge Permian Trust strengths, and eradicate its weaknesses.

Step by Step Guide to SandRidge Permian Trust SWOT Analysis

Strengths of SandRidge Permian Trust – Internal Strategic Factors

As one of the leading companies in its industry, SandRidge Permian 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 SandRidge Permian Trust are –

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  • Highly successful at Go To Market strategies for its products.
  • Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
  • 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 Brand Portfolio – Over the years SandRidge Permian Trust has invested in building a strong brand portfolio. The SWOT analysis of SandRidge Permian Trust 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 – SandRidge Permian Trust is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Strong distribution network – Over the years SandRidge Permian Trust has built a reliable distribution network that can reach majority of its potential market.
  • Strong Free Cash Flow – SandRidge Permian Trust has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Successful track record of developing new products – product innovation.

Weakness of SandRidge Permian Trust – Internal Strategic Factors

Weakness are the areas where SandRidge Permian Trust 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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  • 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 SandRidge Permian Trust
  • 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.
  • 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.
  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, SandRidge Permian 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.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though SandRidge Permian Trust is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • High attrition rate in work force – compare to other organizations in the industry SandRidge Permian Trust has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. SandRidge Permian Trust has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

Opportunities for SandRidge Permian Trust – External Strategic Factors

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  • New trends in the consumer behavior can open up new market for the SandRidge Permian Trust . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as SandRidge Permian Trust 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 SandRidge Permian Trust an opportunity to enter a new emerging market.
  • 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 SandRidge Permian Trust to drive home its advantage in new technology and gain market share in the new product category.
  • 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 SandRidge Permian Trust to capture new customers and increase its market share.
  • Government green drive also opens an opportunity for procurement of SandRidge Permian Trust products by the state as well as federal government contractors.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of SandRidge Permian Trust.

Threats SandRidge Permian Trust Facing - External Strategic Factors

  • 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.
  • 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.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for SandRidge Permian Trust   in those markets.
  • Rising raw material can pose a threat to the SandRidge Permian Trust profitability.
  • New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.

Limitations of SWOT Analysis for SandRidge Permian 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 SandRidge Permian 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 SandRidge Permian 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 SandRidge Permian 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 SandRidge Permian 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

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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)