In our last post, we conducted a thorough SWOT Analysis of a very remarkable brand, Indian Oil Corporation. In this post, we will examine the SWOT analysis of ONGC, India’s premier top energy firm.
ONGC Oil & Gas is India’s largest crude oil producer, currently producing 70% of India crude oil. ONGC has its headquarters in New Delhi, India. In 2010 it was announced as Maharatna status by the Government of India.
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Before we begin further with the SWOT analysis of ONGC, let us discuss the company, what products it has to offer, its financials and its competitors.
ONGC is an acronym for Oil and Natural Gas Corporation. The Oil and Natural Gas Company is a crude oil and natural gas corporation controlled by the Indian government. It is an international oil and gas corporation headquartered in Vasant Kunj, New Delhi, and was founded on August 14, 1956. It is a government-owned public-sector enterprise that is also India’s largest gas producing and exploration company. The Ministry of Petroleum and Natural Gas is in charge of the operations.
It generates 70% of India’s crude oil output and 62% of its natural gas production. ONGC has commercially identified six of the seven operating Indian Basins. It has helped to achieve and surpass several of India’s energy goals. In terms of production and reserves, it has now expanded to become India’s major E&P business.
|Founder||Government of India|
|Origin||New Delhi, India|
|No. of Employees||30,105+|
|Company Type||Government Corporation|
|Market Cap||$28.76 Billion (2021)|
|Net Income/ Profit||INR 112 Billion (2021)|
Products by ONGC
ONGC is a large Indian oil and gas refining and marketing company that provides crude oil, natural gas, and value-added products. Its principal products are crude oil and natural gas, which are destined for the Indian market.
- Natural gas
Competitors of ONGC
Several corporations are attempting to compete with this massive enterprise, but ONGC retains its position as an institution. Some of the competitors include:
- Bharat Petroleum
- Reliance Industries
- Oil India
- Gujarat Natural Resources
Now that we understand the company’s key business, let’s look after the SWOT Analysis of ONGC.
SWOT Analysis of ONGC
SWOT Analysis of ONGC can show how a well-established company uses its opportunities to ensure its growth. It can show how the company takes advantage of its strengths to use the opportunities while working on its weaknesses. SWOT Analysis of ONGC will also reveal its expansion plans.
To better understand the SWOT analysis of ONGC, refer to the infographic below:
Now first let’s begin with the strengths of the company from the SWOT analysis of ONGC.
Strengths of ONGC
- Strong Corporation: The ONGC corporation has a strong brand name, high-profit margins and revenues and employees more than 30,000 people.
- Market Share: ONGC supplies over 30% of India’s crude oil needs. Contributes more than 70% of India’s crude oil output and more than 80% of India’s natural gas production.
- Robust Marketing & Business Model: It also features a robust business model and a market-leading concept. ONGC is always ahead with its marketing campaigns to save the planet by using natural resources. This in turn has increased the brand reputation in the public’s eye.
- Successful in its Market: It is the most successful corporation in the natural gas market and it is one of the top companies in India in the natural gas sector. The firm has strong advertising and branding, as well as recognition from various awards.
- Organic Expansion: Through a broad network of trunk pipelines, ONGC has proven organic expansion in gas transportation.
- Strong Backing: ONGC, which is owned by the Government of India, has substantial financial backing. To commemorate the 50th anniversary of ONGC, a commemorative coin set was created.
Weaknesses of ONGC
- Slow Decisions: As ONGC is a government-owned firm, slow bureaucratic decisions by them can decrease efficiency in a firm.
- Decreasing Market Share: Due to intense rivalry, ONGC’s market share growth is constrained. ONGC’s profitability ratio and net contribution percent are lower than the industry average.
- R&D: Investment in R&D is lower than that of the industry’s fastest rising firms. Outside of the primary business, there has been limited success.
- Financial & Technological Resources: The company’s fundamental issue is a lack of financial and technological resources, which has contributed to India’s economic slump.
Opportunities for ONGC
- Rising Oil Market: Rising fuel/oil prices suggest larger profit margins for ONGC. More oil well discoveries can help ONGC grow its company.
- Global Expansion: Expand global export markets and establish international alliances. Expansion of the natural gas market.
- Lower Inflation Rate: A low inflation rate increases market stability and allows. ONGC consumers obtain credit at a lower interest rate.
- Technological Advancement: The new technology allows ONGC to pursue a unique pricing approach in the new market. It will help the organisation to retain existing clients by delivering outstanding service while also attracting new customers through various value-added offers.
- Dilution of Rivals’ Advantage: The market development will result in a dilution of rivals’ advantages, allowing ONGC to strengthen its competitiveness in comparison to its competitors. The fundamental capabilities of an organisation might lead to success in the field of related other items.
Threats to ONGC
- Increasing Crude Oil Prices: Changing crude oil prices might have an impact on the business.
- Nation’s Liability Rules: Different nations’ liability rules differ, and ONGC may be subject to a variety of legal lawsuits if policies in those markets alter.
- Local Distributors: Growing local distributor strengths pose a challenge in some areas since competition pays larger margins to local distributors.
- Risk of Production: Drilling natural gas wells involve many risks, including the risk that the company may not encounter natural gas reservoirs with commercial production capacity.
- Fierce Competition: The company faces fierce competition in the different market segments it serves, which is a threat for the company. Because of fierce competition from both domestic and international competitors, the company may lose its identity as a powerful brand name.
This ends our detailed SWOT analysis of ONGC. Let us conclude our learning below.
ONGC is one of the top companies responsible for natural gas processing and distribution in India. It has expertise in various segments, also it is facing tough competition from other companies. We have also seen that ONGC is committed to pursuing operational excellence in everything it does, focusing on continuous efforts to improve the environmental performance of itself and its customers, and will remain sensitive to environmental needs in all actions.
For this, ONGC should think about growing its marketing campaigns and environmental awareness on social media using digital marketing strategies.
Because the importance of digital marketing has grown exponentially over the past few decades. Businesses are very careful about their marketing, advertising, and social media presence. If you are a Marketing enthusiast the most important thing right now is to understand digital marketing. Check out IIDE’s 3 Month Advanced Online Digital Marketing Course if you want to learn more and improve your skills.
We hope this blog on the SWOT analysis of ONGC has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
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