Government Regulation And Mining Safety, Health Standards And Environmental Regulations

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Threats included government regulation and mining safety, health standards and environmental regulations. There were many citations and violation fines charged against Massey. Low prices from foreign coal companies pose a threat. The on-going high cost of production and maintenance of equipment is a big cost. The shift of demand to other cleaner resources such as green technologies posed a growing threat as well. The worker conditions are also a threat because they were potentially dangerous and there is a high rate of accidents. This caused the treat of fines and the potential shut down of the mine.
Next I will expand on Porters Five Forces for the coal industry. The five forces include competition from rival sellers, potential new …show more content…

Fortunately for the coal industry, threat of new entrants is moderately low due to several barriers of entry. There is a high capital and fundamentals of the industry needed to be able to fruitfully compete. There are substantial beginning investments in the necessary groundwork. The cost of equipment, resources and labor are extremely high. There is a narrow quantity of natural resources which has a restricted capacity and decreasing supply. The industry has a competitive real-estate-intensive nature and the property for mining is highly valued and expensive. To enter you must have knowledge and capabilities to lessen the impact on the environment and be aware of the regulations from the law to protect the environment.
Substitute products are moderate and include natural gas and renewable energy as alternate products. Renewable energy demand is mounting and natural gas use is rising yearly. There is also continual research and exploration in other energy producing technologies such as wind and solar power. Buyers have moderate to low bargaining power because the industry can pass high prices due to the need, demand, and the limited supply of natural resources in the world. There are not substitutes at the same price availability in large quantities at this point. This increases the need of buyers and reduces their bargaining power. Furthermore a considerable number of the industry has long-term contracts, which

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