Centrica SWOT Analysis, Competitors & USP

Centrica

Natural Gas Utilities

Energy & Power

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

Below is the Strengths, Weaknesses, Opportunities & Threats (SWOT) Analysis of Centrica. Strengths are:

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 Centrica competitors:

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