Centrica SWOT Analysis, Competitors & USP

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 article below lists the Centrica SWOT, competitors and includes its target market, segmentation, positioning & USP. Let us start the Centrica SWOT Analysis:

SWOT Analysis of Centrica

For Centrica, SWOT analysis can help the brand focus on building upon its strengths and opportunities while addressing its weaknesses as well as threats to improve its market position.

Centrica Strengths

The strengths of Centrica looks at the key aspects of its business which gives it competitive advantage in the market. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. 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 are it can improve to increase its position further. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are 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


Centrica Opportunities

The opportunities for any brand can include areas of improvement to increase its business. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. 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 factors which can negatively impact its business. Some factors like increased competitor activity, changing government policies, alternate products or services etc. can be threats. 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


Centrica Competitors

There are several brands in the market which are competing for the same set of customers. Below are the top 4 competitors of Centrica:

1. Scottish and Southern Energy
2. EDF Energy
3. IBERDROLA SA
4. RWE npower

Hence this concludes the Centrica SWOT analysis.

Continue reading more about the brand/company.

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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