Last time we studied the SWOT analysis of La Poste which is the postal and express courier services industry in France. This time around, let us dive into the detailed study or SWOT analysis on EuroChem. Let’s get started.
EuroChem is a Switzerland based manufacturing company of commodity and speciality fertilizers that helps farmers to improve crop yield and quality with the three primary nutrients – nitrogen, phosphates and potash. EuroChem is one of the top 5 ruling producers of nitrogen, phosphate, potash and complex fertilizers.
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Before we go into the SWOT Analysis of EuroChem, let us know about EuroChem as a company.
Headquartered in Zug, Switzerland, EuroChem was founded 20 years ago when it was just having a plant of nitrogen and a dust bowl phosphate mine facing closure. But it transformed quickly to become the biggest fertilizer producer in Russia and the largest high-tech manufacturer of fertilizer in the world.
EuroChem production facilities are located in Russia, Belgium, Lithuania and China. It also has some potash mining activities in the town of Kotelnikovo, southwest of Volgograd. The key assets of the company are nitrogen, phosphate and potash fertilizers, as well as complex fertilizers, iron ore and other industrial products. It employs about 27,000 employees globally.
|Year Founded||20 years ago|
|No. of Employees||27,000+|
|Market Cap||$1 Billion IPO|
|Annual Revenue||US$6.2 Billion (2020)|
|Net Income/ Profit||US$1,017,676 (2019)|
Products of EuroChem
EuroChem has been in the Chemical industry for more than a century and deals in:
- Phosphate & Potash Fertilizers
- Complex Fertilizers
- Iron Ore
- Other Industrial
Competitors of EuroChem
EuroChem’s top four major competitors are:
- Paco Integrated Energy
- Arctic Hunter
- 45-8 Energy
- Intrepid Potash
Now that we have understood the company’s core products and services, let’s dive deep into the SWOT analysis of EuroChem.
SWOT Analysis of EuroChem
SWOT analysis is a study which is undertaken by the majority of companies to determine their core strengths, weaknesses, opportunities and threats. It is a framework that is used to evaluate a company’s competitive position which later helps in strategic planning.
SWOT analysis can be conducted by any popular brand or any brand which is still new in the market can make use of this template to evaluate internal and external variables that might influence the brand authority and market development.
Below is a step-by-step detailed guide to help you with the SWOT analysis of EuroChem.
Strengths of EuroChem
The strengths are basically what makes the brand different from the other competitors and what the organisation excels at. Following are the strengths:
- Reach and Distribution: EuroChem has customers globally and supplies products to a wide variety of industries. This makes sure that the products are made easily available to their customers at the right time.
- Cost Structure: As we read earlier, the main motive is to make the products available at a low rate so that they can be more affordable. EuroChem’s low-cost structure helps them supply products that are low cost but with superior quality.
- Brand Reputation: EuroChem has been in the business of producing chemicals for a large number of years. Also, with the variety of products and services it provides, it is established as a leader in the industry. This helps the corporation to gain a reputation and get recognized easily.
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- Dealer Community: EuroChem has built a very strong relationship with its dealers that not only help in supplying the products but also promote the company’s core products and training.
- Financial Position: EuroChem has a very strong financial position in the market with consecutive profits over the years along with accumulated profit reserves which can be utilised for future expenditures or marketing activities.
- Skilled Labour Force: EuroChem has invested heavily in the employees that have made them not only skilled but are also highly motivated.
Weaknesses of EuroChem
The weaknesses are a major drawback that stops the organisation from performing at its optimum level. They are the areas in which businesses can make improvements. The major drawbacks are as follows:
- Research and Development: EuroChem has a good share of expenditure on the research and development department but it is spending way less than a few of the players within the industry which have benefitted as a result of their innovative products.
- Diversity in the Workforce: The local workers contribute to the majority of the workforce at EuroChem making it difficult for outsiders to adjust and hence resulting in the loss of talent.
- High Employee Turnover Rates: EuroChem has a very high employee turnover rate as compared to its competitors which means it spends a lot on training activities as employees keep leaving and joining.
- Need to Invest More in New Technologies: According to the country’s scale of expansion and the geographical areas EuroChem needs to invest more money in technology to integrate the processes across the board. Currently, the investment in technology is not on par as per the vision of the company.
- Limited Success Across the Core Business: Although EuroChem is one of the leading organizations in its industry it faces challenges in moving to other product segments with its present culture.
Opportunities for EuroChem
Opportunities are the favourable external factors that may give the organization a competitive advantage over others. The opportunities of EuroChem are as follows:
- Social Media: Over the years the number of active users on social media channels has increased and with this EuroChem can make use of its social media handles to promote its products, interact with customers and even provide after-sale services.
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- Transport Industry: The transport industry has been booming and is expected to boom in the next few years as well which has resulted in more demand for EuroChem products which is helpful for EuroChem to scale its business.
- Globalisation: Increased globalisation doesn’t restrict EuroChem anymore to conducting activities in its own country which can act as an opportunity to extend operation in other countries and thus enter new markets and unleash potentials of other new markets.
- Population: The population has been growing and is expected to grow at a positive rate for the upcoming years. This is beneficial for Nordea as there will be an increase in the number of potential customers that it can target.
- Expansion to Other Global Markets: The company is planning to expand its international activities with a particular focus on Asia. This serves them as an opportunity to acquire a new customer base.
Threats to EuroChem
Threats are those factors that have the potential to provide harm to the organisation in any form. The threats of EuroChem are as follows:
- Technological Advancements: The technological advancements by a few competitors can pose a threat to EuroChem as today’s customers are more attracted towards new technological advancements and may be lost to competitors’ offerings thus reducing the market share of EuroChem.
- Competition: There is always an ongoing competition that puts downward pressure on the prices. This could lead to lower profits if it makes changes in the price or may also result in lower market share if it doesn’t make price changes.
- Exchange Rate: The exchange rate also keeps fluctuating and makes it difficult for a company like EuroChem because it extends service internationally while its suppliers are local.
This ends our complete SWOT analysis of EuroChem. Let us conclude our learning below.
EuroChem is a well-known company with a significant global presence. In the SWOT analysis of EuroChem, we observed that the company is heavily reliant and enjoys strong brand recognition and trust with its customers. It has a strong distribution network and has reached across all the markets it serves, but suffers from an increasing number of suppliers in the same space and better R&D efforts by its competitors.
Also, one point not to miss out on is that EuroChem is in line with its marketing effort. It has created a customer base for itself by tapping into the digital era and creating a social media presence on several platforms. If you are interested in learning digital marketing, don’t forget to check out IIDE’s 3 Month Advanced Digital Marketing Course.
We hope this blog on the SWOT Analysis of EuroChem has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
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