Suncor Energy Inc. SWOT Analysis / Matrix

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

The Suncor Energy Inc. is one of the leading firms in its industry. Suncor Energy Inc. maintains its dominant 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 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 Suncor Energy Inc. to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Suncor Energy Inc. swot analysis / matrix

SWOT Matrix Strategies Objective

The primary purpose of SWOT matrix is to identify the strategies that an organization can use to exploit external opportunities, counter threats, and build on & protect Suncor Energy Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Suncor Energy Inc. SWOT Analysis

Strengths of Suncor Energy Inc. – Internal Strategic Factors

As one of the leading firms in its industry, Suncor Energy 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 Suncor Energy Inc. are –

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  • Good Returns on Capital Expenditure – Suncor Energy Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • 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.
  • Highly skilled workforce through successful training and learning programs. Suncor Energy Inc. 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.
  • Automation of activities brought consistency of quality to Suncor Energy Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • 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.
  • Successful track record of developing new products – product innovation.
  • 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.

Weakness of Suncor Energy Inc. – Internal Strategic Factors

Weakness are the areas where Suncor Energy Inc. 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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  • Limited success outside core business – Even though Suncor Energy Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • The profitability ratio and Net Contribution % of Suncor Energy Inc. are below the industry average.
  • 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 Suncor Energy Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • 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 Suncor Energy Inc.
  • 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.

Opportunities for Suncor Energy Inc. – External Strategic Factors

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  • The new technology provides an opportunity to Suncor Energy 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.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Suncor Energy Inc. 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 Suncor Energy Inc.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Suncor Energy Inc.’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.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Suncor Energy Inc..
  • Government green drive also opens an opportunity for procurement of Suncor Energy Inc. products by the state as well as federal government contractors.
  • New trends in the consumer behavior can open up new market for the Suncor Energy Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • The market development will lead to dilution of competitor’s advantage and enable Suncor Energy Inc. to increase its competitiveness compare to the other competitors.

Threats Suncor Energy 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 Suncor Energy Inc.
  • 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.
  • New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
  • Liability laws in different countries are different and Suncor Energy Inc. may be exposed to various liability claims given change in policies in those markets.
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
  • 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.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Suncor Energy Inc.   in those markets.

Limitations of SWOT Analysis for Suncor Energy 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 Suncor Energy 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 Suncor Energy 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 Suncor Energy 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 Suncor Energy 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)