Sempra Energy SWOT Analysis, USP & Competitors

Posted in Energy, Total Reads: 1164
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SWOT Analysis of Sempra Energy with USP, Competition, STP (Segmentation, Targeting, Positioning) - Marketing Analysis

Sempra Energy

Parent Company

Sempra Energy

Category

Natural Gas Utilities

Sector

Energy

Tagline/ Slogan

For every day life

USP

The largest natural gas utility in the United States in terms of coverage area and population served

STP

Segment

Enterprises and individuals with energy requirements

Target Group

Entities which require natural gas and electricity

Positioning

An energy service holding company, supplying electricity and natural gas to a diverse range of customers and one of the largest natural gas distribution utilities in the US

SWOT Analysis

Strengths

1. Sempra’s subsidiary in the US, SDG&E has a strong performance, currently serving 3.5+ million consumers which boosts its segmental revenue and thereby increase the business’ contribution to the top-line of the company as well
2. Sempra has a diversified business portfolio: natural gas distribution, electric generation and distribution, pipelines and storage for LNG, and the LNG receipt terminals operated by its different subsidiaries which reduces risk and thereby a steady stream of revenues is ensured in spite of market fluctuations
3. Its dispersed operations via its subsidiaries as SoCalGas, Sempra South American Utilities, Sempra Mexico, Sempra Natural Gas, and Sempra Renewables together contribute to a high revenue gain for the company
4. It has a substantial customer base (over 30+ million) in the US, Mexico and South America
5. It has a strong operational base in more thaan one country, alongwith an employee base of nearly 17,000

Weaknesses

1. Its heavy reliance on the domestic natural gas market for revenue generation makes the company vulnerable to region specific changes in the US
2. Sempra is a holding company with no significant operations of its own. Accordingly, the primary sources of funds for Sempra to pay dividends to its shareowners and meet its debt obligations depend on cash flows from its subsidiaries
3. Numerous lawsuits and litigation cases, in which Sempra and its subsidiaries are defendants, may affect Sempra’s operations, financial condition, and cash flows

Opportunities

1. Its foray into renewable wind energy projects (eg. Energia Sierra Juarez wind project, contracts with Manzana Wind and Mount Signal solar projects will help leverage its strong clean power generation assets to derive a cost advantage and improve its brand image
2. Increasing demand for electricity in the US will help the company boost its sales and strengthen its financial base
3. Increasing demand for natural gas in the US (coupled with growing shale gas production) provides an opportunity to the company to scale-up its sales, as it is a major distributor of natural gas in the US

Threats

1. Intense competition with other market players, which have greater financial resources, credit access, geographical reach can erode its market reach

2. Its operations are subject to extensive federal, state and local environmental regulatory requirements, which can increase its compliance costs and impact its profit margins adversely

3. Its electricity and gas businesses are seasonal and dependent on weather conditions in the service areas and as such, fluctuations in weather could significantly impact the operating results in turn affecting the company's operations and financial condition
4. It has ownership interest in SONGS, a 2150 MW nuclear generating facility operated by Southern California Edison Company and such is subject to the potential risks arising out of it

Competition

Competitors

1. Dominion Resources Inc.
2. El Paso Corporation
3. Spectra Energy Corporation
4. Southern Union Company

 


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