Centrica SWOT Analysis

Centrica SWOT analysis evaluates the brand by its strengths, weaknesses, opportunities & threats. In SWOT Analysis of Centrica, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors.

Centrica is one of the leading brands in the energy & power sector. The article below lists the Centrica SWOT and includes its target market, segmentation, positioning & USP.

Let us start the SWOT Analysis below:

Centrica Strengths

The strengths of Centrica looks at the key internal factors of its business which gives it competitive advantage in the market and strengthens its position.

A list of strengths is mostly the starting point in a SWOT analysis. Below are the Strengths in the SWOT Analysis of Centrica :

1. Strong market position in UK, being the largest gas and electricity supplier to the UK (supplying gas and electricity under three brand names: British Gas, Centrica Energy, and Centrica Storage)
2. Its strong presence across the entire energy value chain (being engaged in the upstream, midstream, and downstream activities through its four segments: British Gas, Direct Energy, Centrica Energy, and Centrica Storage) provides the company with opportunities to optimize its business while minimizing business risks
3. It operates the largest gas storage reservoir, Rough Field in the North Sea (which has a deliverability rate of 455 gigawatt hours (GWh), or around 1.5 billion cubic feet of gas per day, and a total storage capacity of 35 TWh (118 billion cubic feet) of natural gas at pressures of over 200 bars) which enables it to cater to the gas market better
4. Its strong and engaging customer relationship services cater to its growth and popularity
5. Its huge employee base of nearly 39,000 in two countries of its operations help it to manage its operations better

Centrica Weaknesses

The weaknesses of a brand are certain aspects of its business which it can improve. Here are the weaknesses in the Centrica SWOT Analysis:

1. Over-concentration in the UK market increases the company's exposure to local factors such as lower demand, severe weather conditions, labor strikes, change in regulations, and economic conditions
2. Its over-reliance on third party infrastructure (as pipelines and platforms) can lead to negative impacts on the company’s costs, revenues and profits
3. It has substantial debt obligations presently which can make it less lucrative for future investors

Centrica Opportunities

The opportunities for any brand can include prospects of future growth. Following are the opportunities in Centrica SWOT Analysis:

1. Strategic acquisitions and agreements (with Conocophilips, Total E&P UK, Statoil, Energetix, Vectren Source) will help Centrica to achieve high growth, enhance its market position and increase its profits significantly
2. Securing LNG supply in the UK (through MoUs with Gazprom, Statoil, Cheniere Energy Partners) will help increase its market share
3. Its investments in the clean, renewable energy sector via joint venture with DONG energy and Siemens Project Ventures to develop offshore windfarms will enhance its eco-friendly image
4. Its growing use of smart metering techniques which is an in-home display showing how much gas and electricity is being used as customers are using it – and the cost in pounds and pence

Centrica Threats

The threats for any business can be external factors which can negatively impact its business. The threats in the SWOT Analysis of Centrica are as mentioned:

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. The electricity and gas businesses of Centrica 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

Hence this concludes the Centrica SWOT analysis.

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About Centrica

Centrica Overview
Parent Company	Centrica
Category	Natural Gas Utilities
Sector	Energy & Power
Tagline/ Slogan	A leading integrated energy company, with customers at our core
USP	The largest supplier of gas to domestic customers in the UK
Centrica STP
Segmentation	Enterprises and individuals with energy requirements
Target Market	Entities which require home and business energy solutions
Positioning	A British multinational utility company

 

This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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