Austex Oil Limited SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Austex Oil Limited is one of the leading firms in its industry. Austex Oil Limited 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 enables 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 Austex Oil Limited 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 primary purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Austex Oil Limited strengths, and eradicate its weaknesses.

Step by Step Guide to Austex Oil Limited SWOT Analysis

Strengths of Austex Oil Limited – Internal Strategic Factors

As one of the leading firms in its industry, Austex Oil Limited 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 Austex Oil Limited are –

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• Superb Performance in New Markets – Austex Oil Limited 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.
• 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.
• Highly successful at Go To Market strategies for its products.
• Strong distribution network – Over the years Austex Oil Limited has built a reliable distribution network that can reach majority of its potential market.
• Highly skilled workforce through successful training and learning programs. Austex Oil Limited 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.
• Strong Free Cash Flow – Austex Oil Limited has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• 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.
• Good Returns on Capital Expenditure – Austex Oil Limited is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

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Weakness of Austex Oil Limited – Internal Strategic Factors

Weakness are the areas where Austex Oil Limited 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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• 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 Austex Oil Limited
• 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 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. Austex Oil Limited has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• 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.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though Austex Oil Limited is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
• The profitability ratio and Net Contribution % of Austex Oil Limited are below the industry average.
• 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.

Opportunities for Austex Oil Limited – External Strategic Factors

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• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Austex Oil Limited to increase its profitability.
• 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 technology provides an opportunity to Austex Oil Limited 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.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Austex Oil Limited to capture new customers and increase its market share.
• 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 Austex Oil Limited. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
• New trends in the consumer behavior can open up new market for the Austex Oil Limited . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Austex Oil Limited 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 Austex Oil Limited to drive home its advantage in new technology and gain market share in the new product category.

Threats Austex Oil Limited Facing - External Strategic Factors

• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• Imitation of the counterfeit and low quality product is also a threat to Austex Oil Limited’s product especially in the emerging markets and low income markets.
• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• 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 Austex Oil Limited
• Liability laws in different countries are different and Austex Oil Limited may be exposed to various liability claims given change in policies in those markets.
• Rising raw material can pose a threat to the Austex Oil Limited profitability.

Limitations of SWOT Analysis for Austex Oil Limited

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 Austex Oil Limited
• 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 Austex Oil Limited

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 Austex Oil Limited 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 Austex Oil Limited

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)