ONGC SWOT Analysi1

ONGC SWOT Analysis /Matrix
SWOT analysis is a vital strategic planning tool that can be used by ONGC managers to
do a situational analysis of the firm . It is a useful technique to understand the present
Strengths (S), Weakness (W), Opportunities (O) & Threats (T) ONGC is facing in its
current business environment.
The ONGC is one of the leading organizatations in its industry. ONGC 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.
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 ONGC 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 central purpose of SWOT matrix is to identify the strategies that a firm can utilize to
exploit external opportunities, counter threats, and build on & protect ONGC strengths,
and eradicate its weaknesses.
Step by Step Guide to ONGC SWOT Analysis
Strengths of ONGC – Internal Strategic Factors

As one of the leading companies in its industry, ONGC 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.
some of the strengths of ONGC are –
 Highly skilled workforce through successful training and learning programs. ONGC 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.
 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 Free Cash Flow – ONGC has strong free cash flows that provide resources in
the hand of the company to expand into new projects.
 Automation of activities brought consistency of quality to ONGC products and has
enabled the company to scale up and scale down based on the demand conditions in
the market.
 Reliable suppliers – It has a strong base of reliable supplier of raw material thus
enabling the company to overcome any supply chain bottlenecks.
 Strong Brand Portfolio – Over the years ONGC has invested in building a strong brand
portfolio. The SWOT analysis of ONGC just underlines this fact. This brand portfolio can
be extremely useful if the organization wants to expand into new product categories.
 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 ONGC – Internal Strategic Factors
Weakness are the areas where ONGC 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.
 Limited success outside core business – Even though ONGC 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 ONGC are below the industry average.
 Need more investment in new technologies. Given the scale of expansion and different
geographies the company is planning to expand into, ONGC 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.
 High attrition rate in work force – compare to other organizations in the industry ONGC
has a higher attrition rate and have to spend a lot more compare to its competitors on
training and development of its employees.
 Organization structure is only compatible with present business model thus limiting
expansion in adjacent product segments.
 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. ONGC 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 ONGC 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.
Opportunities for ONGC – External Strategic Factors

 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 ONGC to drive home
its advantage in new technology and gain market share in the new product category.
 Lower inflation rate – The low inflation rate bring more stability in the market, enable
credit at lower interest rate to the customers of ONGC.
 The new technology provides an opportunity to ONGC 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.
 The market development will lead to dilution of competitor’s advantage and enable
ONGC to increase its competitiveness compare to the other competitors.
 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 ONGC to increase its profitability.
 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 ONGC in other
product categories.
 Economic uptick and increase in customer spending, after years of recession and slow
growth rate in the industry, is an opportunity for ONGC to capture new customers and
increase its market share.
Threats ONGC Facing - External Strategic Factors
 New environment regulations under Paris agreement (2016) could be a threat to certain
existing product categories .
 Increasing trend toward isolationism in the American economy can lead to similar
reaction from other government thus negatively impacting the international sales.
 Shortage of skilled workforce in certain global market represents a threat to steady
growth of profits for ONGC in those markets.
 Liability laws in different countries are different and ONGC may be exposed to various
liability claims given change in policies in those markets.
 Changing consumer buying behavior from online channel could be a threat to the
existing physical infrastructure driven supply chain model.
 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.
 Growing strengths of local distributors also presents a threat in some markets as the
competition is paying higher margins to the local distributors.
 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.
Limitations of SWOT Analysis for ONGC

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 ONGC
 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.
Weighted SWOT Analysis of ONGC
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 ONGC 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 ONGC

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.
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)

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ONGC SWOT Analysis /Matrix

The SWOT Analysis framework facilitates an organization to identify the internal

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables

SWOT Matrix Strategies Objective

Strengths of ONGC – Internal Strategic Factors

some of the strengths of ONGC are –

Weakness of ONGC – Internal Strategic Factors

Opportunities for ONGC – External Strategic Factors

Limitations of SWOT Analysis for ONGC

 Certain capabilities or factors of an organization can be both a strength and weakness

Limitation of Weighted SWOT analysis of ONGC

References / Citations & Bibliography

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