Porter 's Five Forces Framework

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Porter’s Five Forces Framework EnQuest PLC, Oil and Gas Industry Cristina Cebotari BA (Hons) Business Studies with Finance Table of Contents INTRODUCTION 3 1. ABOUT THE MODEL 3 1.1 ADVANTAGES 3 1.2 DISADVANTAGES 4 2. APPLYING PORTER’S FIVE FORCES TO ENQUEST PLC 5 2.1 COMPETITIVE RIVALRY 5 2.2 BARGAINING POWER OF SUPPLIERS 7 2.3 BARGAINING POWER OF BUYERS 8 2.4 THREAT OF ENTRY 9 2.5 THREAT OF SUBSTITUTES 9 CONCLUSION 10 APPENDIX 11 REFERENCES 13 Introduction In this paper I will apply Porter’s Five Forces Framework on the traditional oil and gas upstream industry in the UK. The company of my choice is EnQuest PLC, the largest UK independent oil producer in the UK North Sea. 1. About The Model Porter’s Five Forces model is designed to assess the attractiveness of an industry based on the actual or potential competition through the following five forces: Rivalry Among Existing Competitors; Threat of New Entrants; Bargaining Power of Buyers; Bargaining Power of Suppliers; Threat of Substitute Products or Services (Johnson et al., 2014). The framework is a holistic approach to analysing any industry and is based on the principle that the stronger the five forces are, the less attractive it is to compete. Hence, high threat of new entrants and substitutes combined with high bargaining power of buyers and suppliers diminishes industry profitability (Porter 2008). 1.1 Advantages Historically, the Five Forces Framework has
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