Detailed SWOT Analysis Of ONGC – An Indian Government-Owned Crude Oil & Natural Gas Corporation

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.

• Petroleum
• Natural gas
• LNG
• Lubricants
• Petrochemicals
• Electricity

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
• HPCL
• Oil India
• Gujarat Natural Resources
• Adani

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.