SWOT analysis of Duke Energy

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SWOT analysis of Duke Energy

This detailed SWOT analysis of Duke Energy aims to provide the readers with a comprehensive insight into the strengths and the weaknesses of Duke Energy. It also aims to examine the opportunities the company should explore and the threats it needs to keep an eye on. Duke Energy Corporation is an American electric power holding company. Its journey started more than a century ago. It is headquartered in North Carolina, the USA.

Strengths of Duke Energy

Duke Energy is one of the largest electric power holding companies in the USA. It is a Fortune 125 company and listed in New Your Stock Exchange. It supplies electricity to around 7.8 million U.S. customers in six states. Its Gas Utilities and Infrastructure business unit distributes natural gas to approximately 1.6 million customers in the Carolinas, Ohio, Kentucky and Tennessee (Due Energy Corporation, 2021).

Duke Energy has earned a very good number of awards and accolades which attest to its good employment practices and wide reputation. For instance, it was named one of Forbes’ Best Employers for Diversity in 2020. It also secured its place (5th among gas and electricity companies) in Fortune magazine’s 2020 list of the World’s Most Admired Companies. Likewise, it received Florida’s Business Ambassador Award in 2017 as recognition for its contributions to the state’s economy (Duke Energy Corporation, 2021).

Duke Energy offers electric rates that are below the national average. It also has a very good customer relationship management system in place. It installed 1.2 million smart meters in 2017. These products and services have helped the company develop an excellent customer base.

Duke Energy’s CSR activities have gained good reputation over the years. For instance, awarding $1.56 in grants million to 46 Florida-based organisations for educational and workforce development initiatives is one of the CSR activities carried out by the company in 2018. It regularly provides financial assistance to charitable organisations, particularly the ones that work in the field of environmental development, economic development, and education. CSR activities help the company build a good corporate image.

Weaknesses of Duke Energy

Poor customer satisfaction rate is a problem for Duke Energy. For instance, it ranked near the bottom among big electric companies in the USA for residential customer satisfaction (Roberts, 2019).

Duke Energy has been criticised over the years for a number of reasons that have impacted negatively on its corporate. For example, Public Campaign, a non-partisan organisation, was very critical of Duke Energy for its spending of $17.47 million on lobbying and not paying taxes during 2008 through 2010 (Caroline, 2012).

Questions have been raised concerning the operational efficiency of Duke Energy. For instance, the company had to apologise to Seminole’s lawmakers in 2017 as it failed to restore power in Seminole and Orange counties following Hurricane Irma. Similarly, the company’s IT system has also been criticised for providing very little and wrong information to the customers.

Opportunities for Duke Energy

There are a number of opportunities that Duke Energy can explore. For example, rising population in the USA is an opportunity. It increases demand for both gas and electricity.

Duke Energy offers services to a limited number of U.S states. Therefore, expanding to more states is worth exploring. Likewise, increasing the rates of gas and electricity is another opportunity; however, it must be considered with great caution.

Threats to Duke Energy

Threat is the last element to address in the SWOT analysis of Duke Energy. Competition is a threat. Duke Energy has a number of competitors in the USA. For example, Next Era Energy, Southern Co, American Electric, Dominion Resources, Edison International, PPL, and Exelon are some of the competitors of Duke Energy.

Legal threats sometimes become very challenging as well. For instance, Duke Energy had to agree to pay a $600,000 civil penalty in early 2017 to the U.S. Department of Justice for violating federal antitrust laws in connection with the purchase of a power plant in Florida (Pentland, 2017). Likewise, multiple news organisations reported in 2019 that the company was fined $10 million by federal authorities for serious violations of rules and security.

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Last update: 31 January 2021

References:

Duke Energy Corporation (2021) About us, available at: https://www.duke-energy.com/our-company/about-us (Accessed 31 January 2021)

Pentland, W. (2017) Duke Energy Gets Slap On Wrist For Deceiving Federal Energy Regulators, available at:  https://www.forbes.com/sites/williampentland/2017/01/19/duke-energy-gets-slap-on-wrist-for-deceiving-federal-energy-regulators/#3f730e6c6311 (Accessed 25 May 2018)

Roberts, D. (2019) Customers rank Duke Energy low in new report. Here’s how it’s working to improve, available at: https://www.charlotteobserver.com/news/business/article228125339.html (accessed 31 January 2021)

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Author: Joe David

Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.