Star Gas Partners, L.P. SWOT Analysis / Matrix

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

The Star Gas Partners, L.P. is one of the leading companies in its industry. Star Gas Partners, L.P. 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 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Star Gas 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
Star Gas Partners, L.P. swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Star Gas Partners, L.P. strengths, and eradicate its weaknesses.

Step by Step Guide to Star Gas Partners, L.P. SWOT Analysis

Strengths of Star Gas Partners, L.P. – Internal Strategic Factors

As one of the leading organizations in its industry, Star Gas Partners, L.P. 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 Star Gas Partners, L.P. are –

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  • Strong Free Cash Flow – Star Gas Partners, L.P. 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.
  • 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.
  • Superb Performance in New Markets – Star Gas 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.
  • Good Returns on Capital Expenditure – Star Gas Partners, L.P. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Strong Brand Portfolio – Over the years Star Gas Partners, L.P. has invested in building a strong brand portfolio. The SWOT analysis of Star Gas 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.
  • 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.

Weakness of Star Gas Partners, L.P. – Internal Strategic Factors

Weakness are the areas where Star Gas Partners, L.P. 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.

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  • High attrition rate in work force – compare to other organizations in the industry Star Gas Partners, L.P. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • 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.
  • 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 Star Gas Partners, L.P.
  • The profitability ratio and Net Contribution % of Star Gas Partners, L.P. are below the industry average.
  • Limited success outside core business – Even though Star Gas 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.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Star Gas Partners, L.P. 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 Star Gas Partners, L.P. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.

Opportunities for Star Gas Partners, L.P. – External Strategic Factors

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

Threats Star Gas Partners, L.P. Facing - External Strategic Factors

  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Star Gas Partners, L.P.   in those markets.
  • New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
  • 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.
  • Liability laws in different countries are different and Star Gas Partners, L.P. may be exposed to various liability claims given change in policies 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.
  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Star Gas Partners, L.P.
  • 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.

Limitations of SWOT Analysis for Star Gas 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 Star Gas 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 Star Gas 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 Star Gas 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 Star Gas 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)