Detailed SWOT Analysis of Valero – Manufacturer & Marketer Of Transportation Fuels

Products & Services by Valero

These are some of the products and services by Valero

• Gasoline
• Ethanol
• Diesel fuel
• Ultra-low-sulfur diesel
• Jet fuel
• Asphalt
• Petrochemicals
• Lubricants
• Carbon Sequestration

Competitors of Valero

Here are some of the close competitors of Valero:

• BP
• Chevron Corporation
• Ampol
• Parkland Fuel
• Delek US Holdings

Let’s begin with the SWOT analysis of Valero.

SWOT Analysis of Valero

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 Valero from the SWOT analysis of Valero.

Strengths of Valero

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

• Diversified Brands: Under its primary umbrella, the firm has diversified into many different areas of the energy industry and has numerous strong brands including Valero, Diamond Shamrock, Shamrock, Beacon, and Texaco brands.
• Brand Name & Reputation: Valero is a big company with 42+ years of experience and expertise. It has a stronghold over the market with the distribution of advanced energy and oil products in countries around Europe, North America, South America, Asia, and Africa and has maintained a high reputation over the years.
• Vertical Integration: Valero has successfully integrated its business operations vertically by engaging in an exploration of petroleum, oil barrels and refineries. The upstream market involves exploration and production. In the downstream market, it is in the marketing of its brands and gasoline. They enjoy quality control and cost benefits as competitive advantages by vertical integration.
• Research & Development: Valero is continuously trying to improve its technology to decrease its carbon footprint and greenhouse emission while trying to extract more fuel with fewer efforts. Valero has many patents registered in their name and Valero has sustained investment in R&D. R&D helps in reducing expenditure and also gives competitive advantages.
• Exploring New Markets: Valero has a record of exploring and conquering new markets while having the advantage of consumer satisfaction. The worldwide expansion of the company has helped build a new revenue stream. Therefore, Valero can be considered an experienced player when it comes to entering new markets.
• Range of Consumer Products: Valero provides a range of consumer and business products for the easement including the latest unleaded gasoline and diesel fuel products, motor oil, more than 7,000 fuel stations, convenient payment methods and the Valero Rewards program.

Weaknesses of Valero

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

• Environmental & Social Impacts: The organization has been accused of polluting and harming the environment by not doing enough to become green and save the ecosystem. It has faced several air pollution lawsuits for commencing 38 emissions events since 2014.
• Strong Government Regulations and Policies: There are strong government rules and regulations that make operational efficiency low and create a hindrance in the working of a company.
• Low Presence: Valero is depended most probably on the US market which exposes it to face the risk of economic slowdown and government regulations.

Opportunities for Valero

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

• Economic Development: Economic development and rising consumer spending, after years of economic decline and slow growth rate in the industry, is Valero’s opportunity to capture new customers and expand its market share.
• Increasing Greener Demand: The accelerated demand for cleaner and greener energy drives also opens up the possibility of purchasing Valero products by the government and federal government contractors.
• Global Expansion: Valero is known for entering new markets and conquering them and hence, expansion to new locations and countries is always an opportunity for the firm. Recently, the company has started its production at Guyana’s Second Offshore.
• Need for Sustainable Development: The world has started to prefer brands that support environmental health. Valero’s current mission and vision clearly state that it is working its way towards greener energies and emerging sustainable technologies which, if pursued correctly can give the firm a huge advantage.

Threats to Valero

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

• 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 Valero. Valero has to find ways to reduce the emission of carbon dioxide or else Valero 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. Valero has the disadvantage of becoming a victim of political development in the future.
• Intense Competition: Increased competitors’ technologies and profit stability have increased the competition in the industry over the last two years which has put downward pressure on not only profit but also sales.

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