CEPSA SWOT Analysis, USP & Competitors

Posted in Energy, Total Reads: 1057
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SWOT Analysis of CEPSA with USP, Competition, STP (Segmentation, Targeting, Positioning) - Marketing Analysis

CEPSA

Parent Company

International Petroleum Investment Company

Category

Oil and Gas

Sector

Energy

Tagline/ Slogan

Innovating for you

USP

Our capacity to generate value is connected to our ability to understand what society expects

STP

Segment

Corporates/Individuals with energy requirements

Target Group

Entities which require motor fuels, petrochemicals , asphalt products and electricity

Positioning

An integrated energy company operating at every stage of the oil value chain

SWOT Analysis

Strengths

1. CEPSA’s operations are vertically integrated, operating at every stage of the oil value chain, providing the company a significant competitive edge as well as enabling it to have significant economies of scale, reducing costs/earnings volatility
2. CEPSA has a wide customer base which reduces the company’s dependence on any one particular group, thereby reducing business risk
3. CEPSA has a strong market position, being one of the largest oil companies in Spain and a global leader in certain niche petrochemical products like Linear Alkyl benzene (LAB) , which in turn increases its bargaining power
4. CEPSA’s strong R&D capabilities and its focus on product innovation enhance the competitive edge of the company. Its engineering dept. built a Light Naphtha Reformer (LNR) at the La Rabida Refinery, Meta-Xylene Recovery Unit and Sulfur and Vacuum units  at the Gibraltar-San Roque Refinery

5. 11,000+ employees work for the organisation

Weaknesses

1. CEPSA’s operations are primarily limited to Europe as a result of which it does not benefit from the rapidly growing markets in Asia-Pacific where the demand for oil and gas is also robust
2. CEPSA’s operating incomes and margins are relatively lower compared to those of its competitors, which reflects the inefficient cost structure of the company and adversely affects Investors’ confidence in the company

Opportunities

1. Acquisitions of Chevron Espana and PET plant(from LA Seda De Barcelona) would help CEPSA expand its presence in the value chain, in addition to increasing its operations and geographical coverage
2. CEPSA’s strategic plan aims to turn it into a leading energy corporation, with a highly integrated organizational presence and a strong international presence
3. CEPSA has undertaken E&P initiatives in several foreign countries (like : Acquiring E&P rights from Hupecol Caracara (Colombia) and receiving authorization to develop Timimoum gas Field in Algeria) which if successful will derive good returns, thus improving the financial position of the company
4. A rising global demand for oil and natural gas, fuelled by a growing demand for energy worldwide, would help CEPSA boost its sales and strengthen its financial base, provided it keenly expands into international markets as well

Threats

1. CEPSA faces intense competition from other companies in the market, some of which have far higher financial resources and global reach, and such a competition can erode CEPSA’s market share, thus contributing to losses in revenue
2. Stringent environmental norms, driven by European Directives and international conventions are likely to increase compliance costs and put additional burden on oil companies like CEPSA
3. Continuing economic slowdown in the European Union, from where CEPSA derives a significant amount of its revenues, would lead to falling demand for its products, and thus inflict huge losses to the company

Competition

Competitors

1. ExxonMobil Corporation
2. Gas Natural Fenosa
3. Royal Dutch Shell Plc
4. Statoil



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