SWOT ANALYSIS 2 SWOT Analysis Comment by PC: Good cover page ✓ Solved

SWOT Analysis Sinopec Group is a Chinese based oil and gas refinery enterprise that is based in Beijing. It is considered to be the largest petroleum company in the world. The company's business entails gas and oil exploration, refining, and marketing of oil products. Also, the company deals with petroleum-related products that include chemical fertilizers, chemical fibers, and petrochemicals. Though the Company is based in China, it has a competitive advantage over the petroleum companies.

Therefore, this paper will conduct a SWOT analysis of Sinopec Group.

SWOT Analysis Table of Sinopec Group

Strengths

  • The stable and remarkable growth

  • New innovation and research

  • Improving the efficiency

  • Successful international operation

  • Committed to quality and efficiency

Weaknesses

  • Does not feature in the top league

  • Need for a sustainable model

Opportunities

  • Leading mixed-ownership reform

  • Increased consumption of oil in China

Threats

  • Problems in implementing an efficient energy model

  • Severe competition

  • Fluctuations in prices

  • Challenges in oil exploration

Internal Factors

Strengths

The company has experienced stable and remarkable growth characterized by an increase in asset share values. In the 2019 fortune list, it was ranked as number 3, showing its tremendous growth. The operating revenue of the company has increased by 12.8%, making it to compete effectively with other petroleum companies.

Secondly, the company involves itself in innovations and research to advance its practical application. Through innovations, the company can produce new products that compete effectively in the market. Continuously, the company has worked to increase the efficiency of its production. Through the increase in efficiency, they have constantly upgraded the products that they are releasing in the market. The enhanced efficiency makes the products have a competitive advantage over others.

The company has had a successful operation in international markets. Through these operations, they can market their products to other countries. Moreover, the relationships have aided the company to develop unconventional exploration in international markets. Lastly, the company is committed to the quality and efficiency of its products. Due to this aspect, their products can compete effectively on the market. Through research and innovation, they are continuously improving their products to be the best.

Weaknesses

Though the company is producing the best products, it is not capable of fitting in the top league companies in terms of processing power. For the company to be efficient in production, it needs to be in the top league of companies. Additionally, the company lacks a sustainable model that it can use to improve its performance. Failure to have this model makes the company not to have a platform that can guide on how to operate efficiently.

External Factors

Opportunities

Mixed ownership reform is one of the opportunities that the company can utilize to improve its operations. Through mixed ownership, the company can include other stakeholders that can finance the operations of the company. It is an important way in which the company can expand its operations, thus attaining a competitive advantage. With the increase in automobiles in China, the demand for petroleum products is high, making the company have a market for their products. Through the high demand, the company will compete effectively with other petrochemical companies.

Threats

The company is facing problems in implementing an energy model, thus derailing its operations. Other companies have managed to develop a sustainable model and have less trouble while competing with them. Additionally, many existing companies deal with petrochemicals. These companies provide intense competition to Sinopec Group. Through this competition, the company has to work hard for them to outshine their competitors. Fluctuation in prices is another threat to the company. The oil prices are not constant; they fluctuate from time to time. The fluctuation in prices will derail the company's operations due to the challenges that will be exhibited in revenues collected.

Oil exploration has become a major challenge for the company. Finding suitable places to conduct oil exploration is a challenge to the company. Moreover, the resources incurred in the exploration are expensive, making the process to experience hindrances.

Conclusion

In conclusion, quality and efficiency are the main attributes that have aided the company to maintain a competitive advantage. Over the years, the company has been undertaking research which has made it possible to produce products of high quality and efficiency continuously. The combination of innovation, market adaptability, and strategic responses to threats ensures that Sinopec Group can continue to thrive in the competitive petroleum industry.

References

  • China Sinopec. (2020)

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