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Porter's Five Forces
Eva Iwaszewski
MGT/576 – Opportunity Evaluation and Value Creation
Dr. Louay Chebib
December 4, 2023
Industry force
Strength
Provide a justifying your
determination with examples
High
Medium
Low
Threat of new entrants
x
I believe the threat of new entrants is
2
Industry force
Strength
Provide a justifying your
determination with examples
low due to the high barriers to entry. The oil and gas industry requires significant upfront capital investment, making it difficult for new entrants to establish themselves in the market. For example, a new oil company enters the industry, there
are high startup costs which mean that very few companies even attempt to enter the sector. This lowers potential competition from the
start. Proprietary technology forces even those with high startup capital to face an immediate operating disadvantage upon entering the sector.
Power of buyers
x
I believe the power of buyers is low due to the essential nature of the products and services offered by other oil companies. For example, Exxon Mobil, is another oil and gas company that are crucial inputs in various industries, which include transportation, manufacturing, and energy production.
Power of suppliers
x
I believe the power of suppliers is of moderate strength and that the threat substitute products are still, far off, and less credible in the short run, it is
also observed that the industry has high barriers to entry, Finally, the study revealed that there are both intensive rivalry and evidence for collaboration among existing players in the oil and gas industry.
Power of substitutes
x
I believe the power of substitutes is moderate due to the limited number of buyers: In the energy industry, buyers are often large industrial entities or governments. Their relatively small number and limited alternatives for sourcing energy can reduce their individual bargaining
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