Detailed SWOT Analysis of Eni – An Italian Multinational Oil & Gas Company

Quick Stats on Eni

Founder	Enrico Mattei
Year Founded	1953
Origin	Rome, Italy
No. of Employees	31,000+
Company Type	Public
Market Cap	$58.31 Billion (2022)
Annual Revenue	€44 Billion (2020)
Net Income/ Profit	€8.6 Billion (2020)

 

Products & Services by Eni

These are some of the products and services by Eni:

• Eni Station 
• Oil products
• Petroleum products
• Natural Gas products
• Eni Rewind

Competitors of Eni

Here are some of the close competitors of Eni:

• Wartsila
• BP
• TotalEnergies
• Chevron
• LUKOIL
• Engie Portugal

Let’s begin with the SWOT analysis of Eni

SWOT Analysis of Eni

SWOT can tell the areas that are holding you back, or about the loss if you don’t protect them. SWOT analysis is a tool that helps you analyze your company’s strengths, weaknesses, opportunities and threats.

Let’s start by discussing the strengths of Eni from the SWOT analysis of Eni.

Strengths of Eni

The strengths of Eni are the points that helped Eni to achieve success. Let’s have a look at the strengths:

• Supermajor Company: Eni is one of the supermajor companies in the oil and gas industry which is in itself one of the biggest strengths of Eni. It has operations in more than 66 countries including Italy with a market capitalization of US$36.08 Billion by year-end 2020.
• Operates in Many Fields: Other than the oil and gas industry in Italy, the company has a broad presence in fields including contracting, nuclear power, energy, mining, chemicals and plastics, refining/extraction and distribution machinery, the hospitality industry and even the textile industry and news.
• Exploration & Production: Eni is deeply involved in the exploration and production of great oil and gas which gives the company a position as the main extractor of these two essential commodities. It has its core oil fields in Venezuela, the Barents Sea, Yamal Peninsula and Iraq. 
• Vertical Integration: Eni has successfully integrated its business operations vertically by engaging in the exploration and production of natural gas, oil, etc. The upstream market involves exploration and production. In the downstream market, it is in the marketing of power generation and mining. They enjoy quality control and cost benefits as competitive advantages by vertical integration.
• Research and Development: Eni is continuously trying to improve its technology to decrease its carbon footprint and greenhouse emission while trying to extract more fuel with fewer efforts. Eni has many patents registered in their name and Eni has sustained investment in R&D. R&D helps in reducing expenditure and also gives competitive advantages.
• Diverse Products/Services: It has a rather successful record at consumer-driven innovation. ENI has ventured with a variety of companies outside of the energy sector throughout the years and has been able to diversify its revenue streams beyond the energy industry and the oil & gas operations section. 
• Sustainable Development: Eni is continuously bringing about changes towards a sustainable future, like the innovation of health care in Angola. 

Weaknesses of Eni

Weaknesses are the areas where the company is lacking behind and needs improvement. Let’s have a look at the weaknesses of Eni:

• High Employee Turnover: Compared to the industry standard, Eni has to spend more on retaining and training employees, even at lower levels of the organisation.
• Local Monopolies: Companies that ENI can exploit are fast disappearing. The customer network that ENI has promoted is proving less and less effective.
• Declining Market Share: Even when revenues are high, the oil and gas industry grows faster than the company. As a result, Eni must carefully examine the numerous trends in the energy business and determine what it has to do to achieve future growth.
• Expensive Tech: Because of the extensive use of the internet and AI in this sector, the cost of innovations for Eni rises, along with building a robust supply chain as the significance of Eni’s dealer network is declining.
• Limitations in Diversifying: Apart from its core business, though Eni is a leader in its industry, is facing issues while diversifying into other product segments with the present strategies. 

Opportunities for Eni

Opportunities refer to the chances of the progress of the company in future. Let’s have a look at the opportunities for Eni:

• Accelerated Tech: New advances in tech are increasing industrial productivity, allowing suppliers to manufacture a wide range of products and Eni can also make use of this advancement to diversify and innovate. Eni has already begun exploiting this opportunity.
• Government Regulations: Oil & Gas is a heavily regulated industry, which gives an edge to Eni because of its strong and early foundation, as it is becoming difficult for new players to enter the market. This allows Eni to build a strong customer base.
• Environmental Changes: Climate changes and new environmental policies are rapidly demanding sustainable alternatives, and here’s where Eni steps in. Because of a well-established network and advancement in the industry, Eni can innovate in sync with the demands. 
• Global Expansion: Eni is known for entering new markets and conquering them and hence, expansion to new locations and countries is always an opportunity for the firm. 
• New Acquisitions & Partnerships: Eni is always ahead in acquiring new opportunities and partnering with other nations for sustainable growth as recently Eni cuts the ribbon of a 48-MW wind park in Kazakhstan and initiated operations of 400MWh of battery storage project at Texas in the US. 

Threats to Eni

Threats are the issues that can cause problems to the company in future. Let’s have a look at some of the threats to Eni:

• Growing Competitors: The industry of Eni is expanding and growing every day and new players are entering the market with better and more efficient technologies. Given the large customer base, ENI can’t respond quickly to the needs of the niche markets that disruptors are focusing on.
• Saturation and Stagnation: Adoption of oil & gas products and new trends is slow in rural markets and it is more costly for Eni to serve the rural customers than urban customers given the vast distances and lack of infrastructure. 
• Eco-friendly Fuel: If the dependability on renewable energy and non-conventional sources of energy increases then the company may face a large drawback as their products are not environment friendly.
• Climate Changes: As energy demand is increasing, carbon dioxide emission in production as well as upstream is expected to increase which needs to be under control for Eni. Eni has to find ways to reduce the emission of carbon dioxide or else Eni has faced increasing costs and strict regulation. 
• Political Volatility: Oil and gas have been a very important subject of discussion between many countries for the last century. Energy demands and Production are always surrounded by politics. Eni has the disadvantage of becoming a victim of political development in the future.
• 2022 Russia & Ukraine War: The 2022 war between Russia & Ukraine can significantly affect the businesses of Eni because of the products that Eni manufacture i.e. Petroleum, natural gas, petroleum products and Russia has share value as one of the major producers of gas & fuel. The war between the two nations is causing price hikes of commodities that are essential for Eni and similar businesses like Eni.

This ends our detailed SWOT analysis of Eni. Let us conclude our learning below.