U.S. Energy Corp. SWOT Analysis / Matrix

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

The U.S. Energy Corp. is one of the leading firms in its industry. U.S. Energy Corp. 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 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 U.S. Energy Corp. to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
U.S. Energy Corp. swot analysis / matrix

SWOT Matrix Strategies Objective

The primary purpose of SWOT matrix is to identify the strategies that a company can utilize to exploit external opportunities, counter threats, and build on & protect U.S. Energy Corp. strengths, and eradicate its weaknesses.

Step by Step Guide to U.S. Energy Corp. SWOT Analysis

Strengths of U.S. Energy Corp. – Internal Strategic Factors

As one of the leading companies in its industry, U.S. Energy Corp. 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 U.S. Energy Corp. are –

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  • Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
  • Good Returns on Capital Expenditure – U.S. Energy Corp. 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.
  • Automation of activities brought consistency of quality to U.S. Energy Corp. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Strong Brand Portfolio – Over the years U.S. Energy Corp. has invested in building a strong brand portfolio. The SWOT analysis of U.S. Energy Corp. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Strong distribution network – Over the years U.S. Energy Corp. has built a reliable distribution network that can reach majority of its potential market.
  • Strong Free Cash Flow – U.S. Energy Corp. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Highly skilled workforce through successful training and learning programs. U.S. Energy Corp. 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.

Weakness of U.S. Energy Corp. – Internal Strategic Factors

Weakness are the areas where U.S. Energy Corp. 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 U.S. Energy Corp.
  • The profitability ratio and Net Contribution % of U.S. Energy Corp. are below the industry average.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though U.S. Energy Corp. is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
  • High attrition rate in work force – compare to other organizations in the industry U.S. Energy Corp. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though U.S. Energy Corp. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • Limited success outside core business – Even though U.S. Energy Corp. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • 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 U.S. Energy Corp. – External Strategic Factors

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  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for U.S. Energy Corp. to capture new customers and increase its market share.
  • The market development will lead to dilution of competitor’s advantage and enable U.S. Energy Corp. to increase its competitiveness compare to the other competitors.
  • New trends in the consumer behavior can open up new market for the U.S. Energy Corp. . 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 U.S. Energy Corp. to increase its profitability.
  • The new technology provides an opportunity to U.S. Energy Corp. 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 U.S. Energy Corp. an opportunity to enter a new emerging market.
  • 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 U.S. Energy Corp. 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.

Threats U.S. Energy Corp. Facing - External Strategic Factors

  • Rising raw material can pose a threat to the U.S. Energy Corp. profitability.
  • 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.
  • Liability laws in different countries are different and U.S. Energy Corp. may be exposed to various liability claims given change in policies 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.
  • 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 environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • 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 U.S. Energy Corp.

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 U.S. Energy Corp.
  • 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 U.S. Energy Corp.

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 U.S. Energy Corp. 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 U.S. Energy Corp.

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)