Chevron Corporation SWOT & PESTLE Analysis
COMPANY PROFILE -Chevron Corporation
Business Sector :Oil and Gas
Operating Geography :United States, North America, Global
About Chevron Corporation :
Chevron Corporation is an American multinational oil and gas major headquartered in San Ramon, California. Established in 1870 as a part of its predecessor company Standard Oil; Chevron is one of the largest oil and gas companies globally with presence across the oil and gas value chain. The company ranked #28 in the Fortune 500 global list for 2019. Chevron's operations are divided into two business units: Upstream unit and Downstream unit. Upstream unit operations consist primarily of exploration, development and production of crude oil and natural gas; processing, liquefaction, transportation and regasification of liquefied natural gas; movement of crude oil by major international oil export pipelines, transportation, storage, marketing and selling of natural gas and a gas-to-liquid conversion plant. Downstream unit operations consist of refining crude oil into petroleum products, marketing and selling of crude oil and its refined products, transportation of crude oil and refined products by marine vessel unit, motor equipment and pipelines and manufacturing and marketing of commodity petrochemicals and fuel and lubricant additives. Chevron Corp comprises of 48,200 employees as of early 2020. For the 15th time in the row, Chevron Corporation has achieved a 100% corporate equality index in 2020 by the Human Rights Campaign Foundation. The company is ranked as the Best place to work for LGBTQ equality.Chevron's USP or Unique Selling Proposition sprawls in being one of the world's largest oil companies with complete integration ranging from producing, refining, marketing, and distribution. The company is thoroughly involved in every step beginning from extraction of crude oil to selling finished end products. Chevron’s mission is that “We are committed to delivering the energy that improves lives and enables human progress, within a company culture defined by trust, responsibility and integrity. Our purpose guides our aspirations, motivations and operations.” Chevron’s vision statement reads “To be the global energy company most admired for its people, partnership and performance.”
Chevron Corporation Revenue :
Total Sales and other operating revenues:
US $ 139.9 billion – FY ending 31st Dec, 2019 (YoY growth negative 12%)
US $ 158.9 billion – FY ending 31st Dec, 2018 (YoY growth 18%)
US $ 134.7 billion – FY ending 31st Dec, 2017
Competitive Analysis of Chevron Corporation
Here is a depiction of more such internal and external factors and influencers that have a tremendous impact on Chevron corporation's business model, business, and marketing strategies. Thus, the SWOT tool helps to benchmark Chevron's business and performance along with identifying its competitive stance in the industry. The SWOT analysis manifests a discussion on all the pertinent internal and external factors specifically the strengths. weaknesses, opportunities, and threats that predominate Chevron Corporation's micro and macro environment respectively.
Strong and massive global presence, a broad array of product portfolio, strong supply chain, robust fiscal muscle, reserves of oil and gas, dedicated and diversified human resource etc. are quintessential strengths of Chevron Corporation that makes the company a market leader.
One of the biggest weaknesses of Chevron corporation is being identified as the second most polluting oil company globally. The necessity for environmental protection and occupational safety draws more legal challenges to the company that hurt the brand reputation and further weakens the business. On the other hand, this scenario leads to increasing demand for natural gas and renewable sources of energy that can be a great source of opportunity for Chevron to tap on it. Chevron is already on its way to lead the natural gas market and renewable energy market and is currently one of the preeminent producers of Geothermal energy. Intense competition, stringent government ordinances, increasing demand for electric vehicles, economic crisis and natural disasters are the business threats prevailing in Chevron's external environment.
The SWOT analysis for Chevron Corporation is presented below in a matrix/nutshell followed by comprehensive analysis:
| 1. Strong Global Presence 2. Strong brand value 3. Diversified product portfolio 4. Consistent annual per share dividend payout 5. Complete Integration of process 6. Leveraging technology to push energy’s frontiers | 1. Remaining bullish with dividend pay-outs leading to inefficient financial planning 2. Highly dependent on upstream production 3. Legal Issues tarnishing brand value |
| 1. Increasing global energy demand 2. Renewable energy market looks very promising 3. Invest in agility through digital innovation 4. Partnering with leaders to develop low-carbon technologies and target breakthrough technologies 5. Investing in technology-driven exploration program | 1. High Competition in LNG segment 2. Penalties for carbon emissions 3. Economic Crisis and travel bans stemming from the novel Corona virus outbreak, resulting in tumbling oil prices 4. Volatile crude prices |
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Detailed SWOT Analysis of Chevron Corporation
Strength
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Weakness
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Opportunity
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Threat
1. High Competition in LNG segment: Over the past seven years, Chevron Corporation has invested billions of dollars into new liquefied natural gas plants in Australia namely, Gorgon and Wheatstone, only to bring them alive during the worst oil bust in decades. But, however, the anticipated demand for LNG didn’t materialize and rival LNG companies have already overcrowded the market. Chevron is facing myriad of challenges such as high labor costs, technical hang ups, plants in Australia are expected to run $20 billion over the budget and also penalties from EPA for carbon emissions, etc. Thus, there’s stiff competition in the LNG market and company has overspent its rivals on long term projects that will take years to generate returns. Company has spent approximately $54 billion in Gorgon project.
2. Penalties for carbon emissions: GHG emissions-related laws, related regulations and the effects of operating in a potentially carbon-constrained environment may result in increased operational expenses to meet the standard compliance which varies from country to country. Non-compliance attracts repercussions like fine, penalty and ban measures by the government.
Gorgon LNG plant project of Chevron Corporation in Western Australia which is one of the world’s largest carbon capture and storage projects, have been penalized for carbon emissions. Environmental Protection Authority (EPA) singled out Gorgon as the biggest carbon emitter amongst Australia’s 10 liquefied natural gas (LNG) plants, which have been the main driver of a rise in Australia’s carbon emissions in the past two years. However, Chevron claimed it would be the lowest emitter of any LNG project in Australia once its carbon injection project starts operating at full scale, generating around 3.4-4 million tons a year of carbon dioxide. Thus, breach of environmental benchmarks, shows the company in a negative light as being irresponsible and nonchalant towards protecting the environment.
3. Economic Crisis and travel bans stemming from the novel Corona virus outbreak, resulting in tumbling oil prices: Economic crises can have vital negative effects on various parts of an economy. One of the major impacts is on the imports. In economic downturn, demand of goods and services also reduces thereby lower production or imports. For example, 2008 financial crisis had a negative impact on the oil and gas sector as it led to a decline in oil and gas prices and a contraction in credit. This decline in prices has resulted in falling revenues for oil and gas companies. Oil prices fell from $147 in the month of July 2008 to as low as $33 in the month of February 2009. Over the same given time period, gas prices also fell from $14 to $4.
Moreover, the latest outbreak of coronavirus has sent shock waves across the globe and crude oil prices have fallen significantly in a short time, shaving off the stocks of billions of dollars’ worth of major oil and gas firms. Decreasing demand due to lockdowns and global and local travel bans, driving up production due to failures in OPEC-Russia talks, infections with rigs and other travel restrictions have all exacerbated this safety crisis while crippling economies. The largest energy firm headquartered in the US has cut its 2020 budget by 20 per cent to $16 billion as it prepares for the COVID-19 outbreak impact.
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WHY BUY THIS REPORT?
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
1. The SWOT and PESTLE analysis report offers a quick glimpse into the micro and macro factors formerly in a matrix/nutshell format, followed by a comprehensive analysis
2. The SWOT analysis is a convenient technique to evaluate the strength, weakness, opportunity, and threats and their reverberations on the prevailing business model of Chevron Corporation.
3. Comprehend the role of Chevron Corporation's core competencies and sources of competitive advantage that present the company with an edge over its competitors and shape its business
4. The PESTLE/ PESTEL/ STEEPL is a framework to monitor all the external factors mainly, political, economic, social, technological, legal and environmental and analyze their profound impact on the oil and gas industry and specifically on Chevron Corporation
5. Renders holistic information about Chevron Corporation’s mergers and acquisitions, strategic partnerships and alliances, capital raising, market value, market segmentation, and the synergies that were achieved with them.
6. Penetrations into Chevron Corporation’s business diversification, deriving its key business segments and elaborate upon its business case study
7. Cognizance of current trends and driving forces of the oil and gas industry and its influences on Chevron Corporation's business and market strategy.
8. A comprehensive company analysis to gain knowledge about company information, company profile, business model, business current and future plans.
9. Understanding of Chevron Corporation’s USP or unique selling proposition, mission statement, and vision statement
10. Synopsis of Chevron Corporation's business model, business case study along with a peek into the company’s key performance indicators, value proposition, and success factors
References used in Chevron Corporation Analysis Report
1. Chevron annual report 2019 - https://www.chevron.com/-/media/chevron/annual-report/2019/documents/2019-Annual-Report.pdf
2. Chevron annual report 2018 - https://www.chevron.com/-/media/chevron/annual-report/2018/documents/2018-Annual-Report.pdf
3. Chevron investor relations- delivering strong results 2020 - https://www.chevron.com/investors
4. Chevron company website - https://www.chevron.com/
The detailed complete set of references are available on request in the 'Complete report' on purchase.
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Chevron Corporation SWOT and PESTLE analysis has been conducted by Arwind Kumawat and reviewed by senior analysts from Barakaat Consulting.
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