VTTI Energy Partners LP SWOT Analysis / Matrix

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

The VTTI Energy Partners LP is one of the leading firms in its industry. VTTI Energy Partners LP maintains its prominent position in market by critically 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 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the VTTI Energy Partners LP to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
VTTI Energy Partners LP swot analysis / matrix

SWOT Matrix Strategies Objective

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

Step by Step Guide to VTTI Energy Partners LP SWOT Analysis

Strengths of VTTI Energy Partners LP – Internal Strategic Factors

As one of the leading firms in its industry, VTTI Energy Partners LP has numerous strengths that help 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 VTTI Energy Partners LP are –

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  • Highly skilled workforce through successful training and learning programs. VTTI Energy Partners LP 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 – VTTI Energy Partners LP has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Superb Performance in New Markets – VTTI Energy Partners LP 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.
  • Automation of activities brought consistency of quality to VTTI Energy Partners LP products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Highly successful at Go To Market strategies for its products.
  • Successful track record of developing new products – product innovation.
  • Good Returns on Capital Expenditure – VTTI Energy Partners LP is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • 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 VTTI Energy Partners LP – Internal Strategic Factors

Weakness are the areas where VTTI Energy Partners LP 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 VTTI Energy Partners LP
  • Limited success outside core business – Even though VTTI Energy Partners LP is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • 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, VTTI Energy Partners LP 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.
  • 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. VTTI Energy Partners LP has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though VTTI Energy Partners LP 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.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though VTTI Energy Partners LP is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for VTTI Energy Partners LP – 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 VTTI Energy Partners LP to capture new customers and increase its market share.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of VTTI Energy Partners LP’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.
  • Government green drive also opens an opportunity for procurement of VTTI Energy Partners LP products by the state as well as federal government contractors.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as VTTI Energy Partners LP to increase its profitability.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of VTTI Energy Partners LP.
  • 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.
  • 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 VTTI Energy Partners LP in other product categories.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided VTTI Energy Partners LP an opportunity to enter a new emerging market.

Threats VTTI Energy Partners LP Facing - External Strategic Factors

  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for VTTI Energy Partners LP   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.
  • New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • Liability laws in different countries are different and VTTI Energy Partners LP may be exposed to various liability claims given change in policies in those markets.
  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of VTTI Energy Partners LP
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.

Limitations of SWOT Analysis for VTTI Energy Partners LP

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 VTTI Energy Partners LP
  • 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 VTTI Energy Partners LP

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 VTTI Energy Partners LP 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 VTTI Energy Partners LP

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)