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Running Head: ARAMCO COMPANY
Saudi Aramco Company SWOT Analysis
Saudi Aramco is a primarily state-owned company, officially known as the Saudi
Arabian Oil Company, and is the world’s largest oil producer. The company was founded on
May 29, 1933, and is headquartered in Dhahran, Saudi Arabia, and its market is valued at 2
trillion ( Kutlu, 2020). It engages in refining, shipping, exploration, transportation, distribution,
and production of petrochemical products, marketing of hydrocarbons, and producing and
exporting crude oil and natural gas liquids. This paper will discuss Saudi Aramco operations
using SWOT analysis, and it will analyze the cultural, political, legal, and economic challenges it
faces in Saudi Arabia.
Saudi Aramco enjoys diverse strengths as compared to its rivals. One of the strengths is
low production costs, majorly because most parts of the country’s oil fields are free-flowing with
reservoir pressure, so there is no need for pumps, hence lowering production costs. Aramco’s
good relations with the government are also a strength. Being a state-owned company, it enjoys
operational freedom that protects it from political interference, thus enhances its outstanding
business performance. Other strengths include a well-organized decision-making process and
highly motivated employees.
Despite Aramco’s strengths, the company also has some weaknesses. One weakness is the
company’s heavy dependence on crude oil. The product leads to Aramco’s export portfolio; this
has led to its volatile revenue sources and the need for revenue diversification to stabilize annual
income. Sour (high-sulfur) grade crude is also a weakness; with all crude oil produced in Saudi
Arabia, many have sulfur levels exceeding 1% (Intelligence, 2005). Sour is sold at discount
prices. With the tightened specification of petroleum products, there will be less demand for sour
grades hence posing a massive alarm to company marketing strategies.
Saudi Aramco has so…
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