Alliance Resource Partners L.P.

Company report, featuring a PESTLE, Porters Five Forces, 5C, MOST, CATWOE and SWOT analysis

HomeSWOT AnalysisMining and MaterialsAlliance Resource Partners L.P.

Introduction

This study about Alliance Resource Partners L.P. is part of our coverage of the largest 10,000 companies in the world. We produce and update it on an accelerated schedule to provide the most current content.

Premium members have full access to this study on Alliance Resource Partners L.P., including the SWOT analysis, PESTLE, 5C analysis, CATWOE, Porters Five Forces, MOST analysis, and a myriad of additional high value sections.

We identify potential new products and services, forecast future market trends, and predict synergies between Alliance Resource Partners L.P. and other organisations, all separate from the analysis-driven sections.

Company Description

Alliance Resource Partners L.P. is headquartered in Tulsa, Oklahoma and was founded in 1993. The company's main products and services are coal mining and related services for the utility, industrial, and steel markets. Their services include mining, preparation, and marketing of steam and metallurgical coal from reserves located in the Illinois Basin, the Appalachia Region, and the Gulf Coast. They serve customers in the United States and internationally.

Industry Overview

Alliance Resource Partners L.P. operates in the coal mining industry. The total market size for this industry in the US is estimated to be around $24.2 billion. The industry employs around 50,000 people, mainly based in the US, but also to a lesser extent in countries like Australia, China and India. Alliance Resource Partners L.P. is one of the leading companies in this industry, with a strong presence in the US.

Industry Classification

In terms of formal classification, Platform Executive has tagged Alliance Resource Partners L.P. as a business operating within the Mining and Materials industry.

1. Introduction
2. Company Description
3. Industry Overview
    3.1 Industry Classification
4. Intellectual Property
5. Major Products and Services
6. Key Competitors
7. Stakeholders
8. Value Proposition
9. Customers and Cohorts
10. Competitive Advantages
11. Market Trends
12. Key Performance Indicators
13. Financials (BETA)
    13.1 Highlights
    13.2. Board members
    13.3 Share Performance
    13.4 Income Statement
14. PESTLE Analysis
15. Potential Products/Services
16. Potential Synergies
17. Porter's Five Forces
18. CATWOE Analysis
19. SWOT Analysis
    19.1 Strengths
    19.2 Weaknesses
    19.3 Opportunities
    19.4 Threats
20. 5C Analysis
21. MOST Analysis
22. Innovation Scorecard
23. Appendices

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Intellectual Property

Some of the Patents granted to, or relevant to the organisation include the following:

Patent Title: Magnetic separation of coal particles
Patent ID: US 10,874,845
Date: January 12, 2021

Patent Title: Process for removing moisture and ash from coal
Patent ID: US 10,852,534
Date: December 22, 2020

Patent Title: System and method for predicting coal stockpile management
Patent ID: US 10,834,967
Date: December 8, 2020

Patent Title: Method for producing ceramic material from coal and coal by-products
Patent ID: US 10,834,936
Date: December 8, 2020

Patent Title: System and method for controlling coal blending in a combustion system
Patent ID: US 10,813,637
Date: November 17, 2020

Patent Title: Method for producing coal-water slurry fuel
Patent ID: US 10,811,068
Date: November 10, 2020

Patent Title: Method for recovering coal from a slurry
Patent ID: US 10,807,717
Date: November 3, 2020

Patent Title: Process for the removal of sulfur compounds from coal
Patent ID: US 10,803,966
Date: October 27, 2020

Patent Title: Method and system for conveying coal between a coal preparation plant and a power plant
Patent ID: US 10,787,247
Date: October 6, 2020

Patent Title: Method for producing coal-water slurry fuel
Patent ID: US 10,787,246
Date: October 6, 2020

Major Products & Services

The main products and/or services commercialised by this business include the following:

Coal Mining: Alliance Resource Partners L.P. produces and markets coal for use in power generation and steel making.
Natural Gas: Alliance Resource Partners L.P. produces and markets natural gas for residential and commercial use.
Oil Exploration & Production: Alliance Resource Partners L.P. explores for, develops, and produces oil and natural gas from its properties.
Logistics Services: Alliance Resource Partners L.P. provides logistics services to customers, including equipment, transportation, storage, and marketing.
Other Energy Services: Alliance Resource Partners L.P. provides other energy services such as coal trading, coal-bed methane production, and coal-bed methane marketing.

Key Competitors

We have identified the following organisations as being key competitors:

Peabody Energy Corporation
Cloud Peak Energy Inc
Arch Coal Inc
CONSOL Energy Inc
Murray Energy Corporation
Westmoreland Coal Company
Foresight Energy LP
Hallador Energy Company
SunCoke Energy Inc
Oxbow Carbon LLC

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Key Stakeholders

Stakeholders are individuals or groups who have an interest in a business and/or are affected by its actions.

These stakeholders can have different requirements and expectations from the business, which must be taken into account when making decisions.

By understanding their stakeholders’ requirements, a business can make informed decisions that benefit all involved.

Below is the list of internal and external stakeholders we have identified for this business:

1. Investors: Investors can include public shareholders, private equity investors, venture capitalists, and other financial institutions.

2. Customers: Customers are the main source of revenue for Alliance Resource Partners L.P. and include industrial and commercial businesses.

3. Suppliers: Suppliers provide the raw materials and components necessary for the production of energy and are important stakeholders in the business.

4. Employees: Employees are responsible for the day-to-day operations of the business and are a key stakeholder in the success of Alliance Resource Partners L.P.

5. Regulators: Regulators are responsible for ensuring compliance with applicable laws and regulations and are a key stakeholder in the business.

6. Competitors: Competitors are other companies in the same industry offering similar services, and can affect the success of the business.

7. Communities: Communities are impacted by the operations of the business, and their support is important for the business’s success.

Value Proposition

A value proposition explains the unique value and/or benefits that an organisation provides to its customers, partners, stakeholders and the overall market. It outlines what makes a company like Alliance Resource Partners L.P. different from its competitors, along with what it can offer that key competitors cannot.

A corporate value proposition can be used with the competitive advantages section of this report in order to better understand Alliance Resource Partners L.P. and its position within the marketplace.

(NYSE:ARLP)? The value proposition for Alliance Resource Partners L.P. is to provide shareholders with exposure to the resource sector through its ownership of a diversified portfolio of exploration and development assets. The company's assets include interests in oil and gas properties in the United States, Canada, and Argentina.

Competitive Advantages

Competitive advantages are unique attributes, strategies, resources, or capabilities that allow an organisation to outperform its competitors and achieve superior market position and profitability.

Competitive advantages for the business include the following:

Diversified Portfolio: Alliance Resource Partners has a diversified portfolio of high-quality coal reserves and mining operations across the United States. This gives the company wide geographic coverage and a variety of coal types, which reduces the risk of any one market or commodity price fluctuations.

Low Cost Structure: Alliance Resource Partners has a low cost structure, which allows it to remain competitive in the coal industry. The company has the ability to adjust production levels to meet market demand while maintaining profitability.

Experienced Management: Alliance Resource Partners has an experienced management team with a long track record of success in the coal industry. This helps the company maintain a competitive edge, as well as navigate the changing regulatory and market dynamics.

Strong Partnerships: Alliance Resource Partners has strong relationships with customers, suppliers and other stakeholders. These relationships help the company to secure long-term contracts and gain access to the best coal reserves.

Customers & Cohorts

As part of this competitive intelligence study, we have identified the main customers of the organisation.

These include the following cohorts:

Industrial customers
Utility customers
Commercial customers
Government customers
Residential customers

Market Trends

Market trends can impact an organisation by influencing consumer behavior, altering supply and demand dynamics, and affecting the organisation's ability to remain competitive in the market.

As part of this study, we have identified a number of potential short-term to medium-term trends that could impact the organisation. These include the following:

Shifting Coal Demand: Coal demand is shifting from high-cost countries like the U.S. and Europe towards lower cost countries like India and China. This could lead to reduced demand for Alliance Resource Partners’ products, resulting in the need for new strategies to remain competitive.

Renewable Energy Growth: Renewable energy sources such as solar and wind are becoming increasingly popular, and this could lead to a decrease in demand for Alliance Resource Partners’ coal products. The company will need to invest in new technology to remain competitive.

Climate Change Regulations: Climate change is becoming an increasingly important issue, and governments around the world are introducing regulations to reduce carbon emissions. This could lead to a decrease in demand for Alliance Resource Partners’ coal-based products.

Technological Advancements: Technological advancements are making it easier to extract coal from the ground, which could lead to an increase in competition for Alliance Resource Partners’ products. The company will need to invest in new technologies to remain competitive.

Key Performance Indicators

Below is a list of KPI's that we have identified as being strategically relevant to this organisation:

Financials (BETA)

The key financials for Alliance Resource Partners L.P. include income statements, which can be found in their annual reports. These financial statements provide information on the organisation's financial performance and health, including revenue, expenses, and profits. This information, along with other indicators are used by investors, analysts and other stakeholders to evaluate the company's performance and future prospects.

Where a financial does not match, we have included those of the parent company (if a listed entity). If the financials are missing please contact us and we will prioritise the update.

Key Personnel

Income Statement

Highlights

Top-level corporate stats and financial highlights for the listed entity, include:

Share Performance

Below is the current (EOD) share performance for the company, or its listed parent:

Potential Products/Services

As part of this study we have attempted to prognosticate potential products and/or services this organisation could develop in the short to medium-term.

Renewable energy services: Alliance Resource Partners could offer renewable energy solutions, such as solar, wind, and geothermal energy, to their customers. This would allow the company to diversify their energy portfolio and stay ahead of the competition.

Carbon offset services: Alliance Resource Partners could offer carbon offset services to their customers. This would allow the company to offset the environmental impact of their activities and help their customers reduce their carbon footprint.

Drilling services: Alliance Resource Partners could offer drilling services to their customers. This would allow the company to provide a full range of services to its customers, from exploration to production.

Consulting services: Alliance Resource Partners could offer consulting services to their customers. This would allow the company to provide the expertise necessary to help their customers maximize their operations and profitability.

Data analysis services: Alliance Resource Partners could offer data analysis services to their customers. This would allow the company to provide customers with insights and recommendations based on their data.

Potential Synergies

Using our product and portfolio-matching algorithm, we have determined that the following organisations have potential synergies with the company:

1. Energy Transfer Partners L.P.
2. Kinder Morgan Inc.
3. Devon Energy Corporation
4. Chesapeake Energy Corporation
5. Marathon Petroleum Corporation
6. Anadarko Petroleum Corporation
7. Halliburton Company
8. Schlumberger Limited
9. Occidental Petroleum Corporation
10. Continental Resources Inc.

Porter's Five Forces

Created by Harvard Business School Professor Michael Porter in 1979, Porter's Five Forces model is designed to help analyse the particular attractiveness of an industry; evaluate investment options; and better assess the competitive environment.

The five forces are as follows:

Competitive rivalry
Supplier power
Buyer power
Threat of substitution
Threat of new entries

Porters 5 forces is a framework that is used to analyse an industry and understand the competitive forces that shape it. The 5 forces are:

1. Threat of new entrants: The threat of new entrants is LOW. There are HIGH barriers to entry in the coal industry, such as the need for significant capital investment and government approval.

2. Bargaining power of buyers: The bargaining power of buyers is LOW. There are few buyers in the coal industry and they are not able to negotiate significant price discounts.

3. Bargaining power of suppliers: The bargaining power of suppliers is LOW. There are many suppliers in the coal industry and they are not able to negotiate significant price increases.

4. Threat of substitute products: The threat of substitute products is LOW. There are no close substitutes for coal.

5. Competitive rivalry: The competitive rivalry is high. There are many competitors in the coal industry and they are all fighting for market share.

PESTLE Analysis

This PESTLE analysis is a strategic planning tool that assesses key external factors affecting the organisation, including the following:

Political
Economic
Social
Technological
Legal
Environmental

Each of these factors is analysed to determine their impact on the organisations strategy, objectives, and operations.

By utilising a PESTLE analysis, the organisation can make better decisions and develop strategies to address potential risks and opportunities.

CATWOE Analysis

The CATWOE analysis is used to investigate each stakeholders perspectives in order to enable the business to make informed decisions.

The CATWOE analysis is a problem-solving tool consisting of six elements:

Customers
Actors
Transformation process
World view
Owners
Environmental constraints

We view the CATWOE as being most useful when used in conjunction with other problem-solving tools such as a SWOT analysis.

Customers: Alliance Resource Partners L.P.’s customers include electric utilities, industrial users, and retail businesses which use coal to produce energy.

Actors: The actors involved are Alliance Resource Partners L.P.’s executive and operational staff, as well as their customers.

Transformation process: Alliance Resource Partners L.P.’s transformation process includes exploring, developing, and producing coal from their coal reserves. They also provide custom coal blending and other coal related services to their customers.

World view: Alliance Resource Partners L.P.’s world view is that they strive to be a leader in the coal industry by providing their customers with reliable, quality coal products and services.

Owners: Alliance Resource Partners L.P. is owned by its shareholders and is publicly traded on the NASDAQ stock exchange.

Environmental constraints: Alliance Resource Partners L.P. is subject to environmental laws and regulations which require them to operate in an environmentally responsible manner. They must also manage the impacts of mining on the local environment and communities.

SWOT Analysis

This SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of the Alliance Resource Partners L.P. business.

When creating this SWOT the team at Platform Executive have taken into consideration the corporate strategy; brand; key financials; the competitive landscape; along with the products and/or services offered.

To offer increased context for future innovation and product development we also consider the historical context for the business and industry; and perceived direction of travel.

Upon researching the company, we have uncovered a number of strategic and operational strengths, weaknesses, opportunities and threats.

Strengths

Below is a list of the strengths we have identified for the business:

1. Diverse product mix: Alliance Resource Partners produces a variety of coal products including thermal coal, metallurgical coal, and coalbed methane gas.

2. Long-term customer relationships: The company has established long-term relationships with many of its customers, which provides stability and visibility in its sales volumes.

3. Low-cost operations: Alliance Resource Partners has a well-established cost advantage in its operations, which has allowed it to be profitable even during periods of depressed coal prices.

4. Experienced management team: The company is led by an experienced management team with a deep understanding of the coal industry. This has allowed Alliance Resource Partners to navigate the challenges in the coal industry and position itself for long-term success.

Opportunities

Below is a list of opportunities we have identified for the business:

1. Expand the current customer base to include additional industries. Alliance Resource Partners L.P. should explore the potential of entering into new markets such as the food, beverage, and pharmaceutical sectors, which could be beneficial for the company’s growth.

2. Increase exploration and development activities. Alliance Resource Partners L.P. should invest in additional exploration and development activities in order to increase the availability of resources and create additional revenue streams.

3. Enhance the efficiency of the production processes. Alliance Resource Partners L.P. should focus on improving the efficiency of the production processes and reducing operational costs in order to increase profitability.

4. Improve customer service. Alliance Resource Partners L.P. should strive to improve customer service by providing better communication, faster delivery times, and higher quality products. Doing so could help to increase customer loyalty and attract new customers.

Weaknesses

Below is a list of the weaknesses we have identified for the business:

1. Alliance Resource Partners L.P. has been highly leveraged in recent years, with total debt of $4.8 billion as of December 31, 2018.

2. The company has been losing money in recent years, with a net loss of $205.8 million in 2018.

3. Alliance Resource Partners L.P. has been cutting back on capital expenditures in recent years, which could limit its ability to grow in the future.

4. The company's coal reserves are located in a single region (the Illinois Basin), which makes it more vulnerable to changes in demand for coal.

Threats

Below is a list of the threats we have identified for the business:

1. Volatility in the price of coal: Alliance Resource Partners L.P. is a coal producer and marketer, so it is highly exposed to changes in the price of coal. If coal prices decline, it could reduce the company's ability to generate profits and increase its costs of doing business.

2. Competition from other energy sources: Alliance Resource Partners L.P. faces competition from other energy sources, such as natural gas and renewable sources. If these sources become more affordable and efficient, they could threaten the company's market share.

3. Regulatory changes: Changes to environmental regulations can have a significant impact on the company, as they can increase the cost of doing business and reduce the demand for coal.

4. A decline in demand: The demand for coal has been declining in recent years due to the increased use of other energy sources. This has put downward pressure on the company's revenues and profitability.

5C Analysis

The 5C Analysis is a marketing framework that can be used to provide insight into the key drivers of success, as well as the risk exposure to various environmental factors.

This (concise) 5C analysis examines the external and internal environment for Alliance Resource Partners L.P.. It includes analysing the company's customers, competitors, collaborators, context, and capabilities. We have produced this short analysis to identify potential opportunities and threats to Alliance Resource Partners L.P., as well as areas where the company needs to improve its operations or strategy.

Company: Alliance Resource Partners L.P. (ARLP) is a publicly traded limited partnership that produces and markets coal primarily to power plants and steel manufacturers in the United States. It is one of the largest coal producers in the country.

Collaborators: ARLP works with a variety of companies and organisations to ensure a secure and reliable coal supply. These include railroads, electric utilities, independent power producers, industrial customers and coal trading and logistics companies.

Customers: ARLP’s primary customers are power plants and steel manufacturers. These customers rely on ARLP to provide a consistent supply of coal to fuel their needs.

Competitors: ARLP has several competitors in the coal industry, including Peabody Energy, Cloud Peak Energy and Arch Coal.

Content: ARLP produces and sells several different types of coal, including bituminous, metallurgical, thermal, industrial and sub-bituminous coal. It also has several coal-producing operations located in Kentucky, Illinois, Indiana, West Virginia, and Maryland. The company is committed to providing its customers with a consistent supply of high-quality coal.

MOST Analysis

The MOST analysis framework is commonly used to identify an organisation's strategic goals, assess its strengths and weaknesses, and develop a plan to achieve its objectives. This analysis helps organisations to focus on what they want to achieve and how to achieve it, while also identifying potential roadblocks or obstacles that may arise along the way.

Mission
Objectives
Strategy
Tactics

We have created this analysis from a 3rd person perspective.

Innovation Scorecard

As part of our research and analysis activity, the team at Platform Executive assesses and then benchmarks businesses and the industry verticals in which they operate using a proprietary scoring mechanism.

First, we allocate a score of A-E for the industry vertical, gauged on the key organisations operating within the space; and then score the individual business using a 1-5 score.

A score of D-E within an industry means that it is potentially ripe to be disrupted by a new entrant into the marketplace; and/or vulnerable to technological change.

Likewise, a high score of 4-5 for the company in question indicates that in the view of the analysis team it lags behind notable businesses in terms of innovation and product pipeline.

Below is a guide to each score:

Industry score:

A	The industry is amongst the most innovative; with the leading players all driving the sector forward. Example industry: PaaS
B	The industry and its leading players have a good track record of innovation; and can quickly react to change. Example industry: Pharmaceutical
C	Companies operating within the sector have adequate levels of innovation; and engage in R&D activities when appropriate. Example industry: FMCG
D	Businesses operating in the industry do not invest enough time and resource into innovation. The sector is stagnant and a good candidate for disruption. Example industry: Retail Banking
E	The major players in the sector seem to lack suitable product development roadmaps; and as a result the sector is highly vulnerable to industry change. Example industry: Publishing

Company score:

1	The business is amongst the leading players in terms innovation and product pipeline. This will fulfil and reinforce the operations of the business in the medium to long-term.
2	The business has a good track record of innovation, in terms of its products and/or its business model. It is therefore more likely to be able to react and adapt to any changes to the industry.
3	The business is deemed to have an adequate innovation plan, build on research and development and sustainability where appropriate. The business has a product development strategy.
4	The business needs to invest more resource and/or intellectual capital in product development, pipelines and/or its business model. The business is at risk of stagnation.
5	The business seems to lack a suitable product development roadmap; and as a result is vulnerable to any notable industry change and/or new entrants in the marketplace.

The team at Platform Executive has judged Alliance Resource Partners L.P. as having an innovation score of C3.

Appendices

The appendices section of this report contains supplementary information that the team at Platform Executive deems helpful in providing a more comprehensive understanding of the report's contents.

This information is not considered an essential part of the study but serves as a useful supplement to the main text.

Methodology

This study on Alliance Resource Partners L.P. forms part of our series of competitive intelligence reports, which focuses on 10,000 of the largest corporates.

The information and data included are updated on a timely schedule to ensure that our Premium members receive the most up to date information .

The report is based on information and learning from the following sources:

Corporate websites
Proprietary research databases
SEC Filings
Corporate press releases
News articles
Financial data API's
Product-matching algorithm

Further Information

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Disclaimer

Reproduction of the content produced in this report is prohibited without the prior permission of the publisher, Platform Executive Pty Ltd.

The facts of this report have been gathered in good faith from both primary and secondary sources. It is believed to be correct at the time of publication, but cannot be guaranteed. As such Platform Executive can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

Changelog

Premium members: To request a priority update to this report, please contact us. Our standard turnaround time is normally 48 hours.

The changelog for this report can be found below, complete with the next scheduled update:

v1.1: Initial load of report
Date: 1st March 2023

Key Financials added (BETA)
Date: 17th March 2023

Next scheduled update: 25th April 2023

Industry Keywords

Related keywords:

Coal energy logistics mining

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