Valero Energy SWOT Analysis
Strengths
Valero Energy is known to be one of the largest refining companies based in San Antonio, North America. It is completely an independent refiner and marketer of petroleum product.
The company has about fifteen large refineries and 9 ethanol plants. The company has a large refining system and is said to have a capacity of just about 3.3 million bpd. Such a large refining capacity is its strength and gives it a competitive edge.
Valero Energy was has been getting the top positions in the fortune 500 list since 2006 and in 2009, it was at the tenth position. This further adds to the good will and reputation of the company.
Valero Energy is not just a leader in refining but also a leader when it comes to feedstock flexibility and conversion capacity.
Valero Energy has strong, long established product portfolio. They have a diverse product portfolio. From refining to distributing and marketing of its own products, they have well developed strategies.
As the product portfolio is diverse they have products that suits and meets the needs of every industry; from manufacturing industries to health care, plastics to beauty products and transportation industry.
Valero Energy has its own well-positioned terminals and which makes it possible for the company to supply clean and premium-quality fuels efficiently.
The company has well developed customer service stores that provide efficient and reliable services to its customers. Delivery of value to the customers is a key factor to its success and large loyal customer base.
Weaknesses
The high inventory level of gasoline and the pricing pressures are the weaknesses of all large refiners.
The company sales and profits are highly reliant on the US market.
The company does not have sufficient supply of its own feedstock.
The demands of oil and petroleum good are increasing whereas there are just a few places to drill in US.
Opportunities
With the increasing price of petroleum there is a higher demand of diesel which gives the company new opportunities to explore and increase its market share.
By refocusing its strategy the company can cut down its expense and deliver better services at the same time.
The restructuring of its retail business will help in improving its services and hence building its good will further.
Another opportunity for Valero Energy is manufacturing private label products, which is now a growing trend in the industry.
The company can acquire new ethanol plants as well as take measures to enter the alternative energy sector.
Threats
Besides the threats from the competitors, the rising energy prices all over the world are a serious threat faced by Valero Energy.
The global financial crisis is a threat as it has resulted into lower demands and higher costs to the company.
The threats from competitors from Middle East regions are increasing as they are offering services and products for lesser prices.
The growing environmental concerns and awareness must be addressed by the company as it can create legal tangles as well as boycott from environment conscious customers.
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