Published by MBA Skool Team, Last Updated: April 12, 2020
SWOT analysis of Centrica analyses the brand by its strengths, weaknesses, opportunities & threats. In Centrica SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors.
SWOT Analysis is a proven management framework which enables a brand like Centrica to benchmark its business & performance as compared to the competitors. Centrica is one of the leading brands in the energy & power sector.
The table below lists the Centrica SWOT (Strengths, Weaknesses, Opportunities, Threats), top Centrica competitors and includes its target market, segmentation, positioning & Unique Selling Proposition (USP).
A leading integrated energy company, with customers at our core
The largest supplier of gas to domestic customers in the UK
Enterprises and individuals with energy requirements
Entities which require home and business energy solutions
A British multinational utility company
SWOT Analysis of Centrica
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
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
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
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
Below are the top 4 competitors of Centrica:
1. Scottish and Southern Energy 2. EDF Energy 3. IBERDROLA SA 4. RWE npower
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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