SWOT Analysis of the

Petron Corporation
Radian Kenrich D. Guintos| Brent Russel F. dela Cruz| Adrian
DelaCruz
What is SWOT analysis?
 It is a strategic planning and strategic
management technique used to help a person or
organization identify Strengths, Weaknesses,
Opportunities, and Threats related to business
competition or project planning.
 It is sometimes called situational assessment or
situational analysis.
Background about the corporation
 Petron Corp (Petron), a subsidiary of San Miguel Corporation,
refines and markets petroleum products. Its market position,
focus on quality, and ownership in Bataan Refinery has
strengthened its operations, even as decreasing profitability
could be cause for concern. Global consumption of liquid
fuels and increasing upstream investments could provide new
growth opportunities to the company. However, oil and
natural gas price fluctuations, capital costs in the refining
sector, and intense competition could affect its operations.
STRENGTHS OF PETRON CORPORATION
 Strong Market Presence - A company's brand is more than just its logo. Petron
Corporation operates for about 87 years now that helps them built and grow reputation,
convey stability, and construct loyalty and trust to the client and customers.
 Quality Compliance - In many sectors, a company cannot legally operate without ensuring
specific standards are set and observed across an industry. Firms should set expectations
and give the customers the confidence about the products and services they buy and
consume.
 Huge Profits - The most immediate and visible benefit of making a large profit is that the
corporation will keep its profits and raise its equity position. It raises the company's
valuation and makes it more appealing to prospective buyers. Petron lost P9.36 billion in
the second quarter of this year as a result of the pandemic. Petron Corp., the country's
largest oil refining and marketing firm, returned to profitability in the third quarter,
posting a P1.63 billion consolidated net income, primarily led by retailing margins, as the
government agreed to steadily and safely restart the economy.
WEAKNESSES OF PETRON CORPORATION
 Oil Spill at Manila Bay - According to Rappler, the Philippine Coast Guards (PCG) discovered a leak
in one of the underwater pipelines in 2013, which may result in health problems for sea life and a
decline in oil output. It was confirmed that 500,000 litres of diesel oil had spread to coastal
villages in some Cavite cities.
 Illegally Sourced Fuel - According to ABS CBN News, Petron Corp. has filed criminal charges against
three former station dealers in Bulacan and Pangasinan for supplying unlawfully sourced fuels to
customers marketed as Petron goods, a practice known as "dumping." Lab testing of fuel samples
from the three gas stations was also stated in the paper, which "reported that petroleum products
sold in the said service stations do not follow Petron's and the Department of Energy's quality
requirements and standards." Petron is also taking steps to cancel the arrangements of the three
distributors in order to put an end to the unethical activity and protect customers.
 Decline in Supply - According to a news item from May 26, 2020, the Corporation is temporarily
closing down its oil refinery in Bataan due to the pandemic. As a result, the first quarter of
revenue had a net loss of 4.9 billion pesos. Because of the drop in net revenue, the President
raised tariffs on imported crude oil and refined petroleum products in the hopes of reducing the
pandemic's economic effect.
OPPORTUNITIES FOR PETRON CORPORATION
 Accelerated technological innovations and advances are improving
industrial productivity, allowing suppliers to manufacture vast array of
products and services. This can help Petron to significantly venture
into adjacent products.
 Lowering of the cost of new product launches through third party
retail partners and dedicated social network. Petron can use the
emerging trend to start small before scaling up after initial success of
a new product.
 Lower inflation rate - The low inflation rate bring more stability in the
market, enable credit at lower interest rate to the customers of
Petron. This will increase the consumption of Petron products.
THREATS TO PETRON CORPORATION
 Competitors catching up with the product development - Even though at present
the Petron is still leader in product innovation in the Oil & Gas - Integrated
segment. It is facing stiff challenges from international and local competitors.
 Growing technological expertise of local players in the export market - One of
the biggest threat of tie-up with the local players in the export market for Petron
Refining is threat of losing IPR. The intellectual property rights framework is not
very strong in emerging markets especially in China.
 Competitive pressures - As the new product launch cycles are reducing in the
Energy industry. It has put additional competitive pressures on players such as
Petron Refining. Given the large customer base, Petron Refining can't respond
quickly to the needs of the niche markets that disruptors are focusing on.
END