Porter Analysis Electricity Industry

In: Business and Management

Submitted By toyeolat
Words 1719
Pages 7
Regulated Electricity Utility Industry
The electric utility industry generates, transmits and delivers electrical power to consumers, businesses and governments. Today there are three primary business structures in the regulated electrical utility industry—public companies owned by shareholders, municipally owned companies, and those owned and operated by the federal government. Shareholder owned companies are the largest group, providing half of all electricity in the United States.
Burning fossil fuels to power steam turbines produces over half of electricity consumed today.1 Other generation methods include harvesting the power of nuclear reactions to power turbines and, increasingly, renewable methods such as wind or water-powered generation. Unlike most manufactured products electricity cannot be stored, so a complex and delicate fabric of transmission systems (know as the power grid) exists to deliver power when and where it is needed. Many firms involved in the generation of power are also involved in its transmission and sale to end-users, making vertical integration commonplace within the industry. This end-to-end integration, as well as end users’ dependence on electricity, has led to historically strict government control of the industry. The most significant piece of regulation in the last century was known as the Public Utility Holding Company Act of 1935 also known as PUHCA. The act had a profound effect on the regulated electrical industry. First, and most importantly, it set limits on the rates that electricity and natural gas companies could charge payers. Secondly, it restricted the ownership structure of firms involved in the electrical utility industry, preventing non-utilities from owning interest in regulated businesses. Third, it formalized the jurisdiction that federal, through the Securities and Exchange Commission, and state…...

Similar Documents

Porter Analysis

...Porter's five forces analysis is a framework for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven to normal profit. Three of Porter's five forces refer to competition from external sources. The remainder are internal threats. Porter referred to these forces as the micro environment, to contrast it with the more general term macro environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a business unit to re-assess the marketplace given the overall change in industry information. The overall industry attractiveness does not imply that every firm in the industry will return the same profitability. Firms are able to apply their core competencies, business model or network to achieve a profit above the industry average. A clear example of this is the airline industry. As an industry, profitability is low and yet individual...

Words: 381 - Pages: 2

5 Porters of Airline Industry

...5 porters of airline industry Threat of New Entrants is low   The airline industry is so saturated that there is hardly space for a newcomer even to squeeze its way in. The main concern for this is the cost of entry. The airline industry is one of the most expensive industries, due to the cost of buying and leasing aircrafts, safety and security measures, customer service and manpower. Another major barrier to entry is the brand name of existing airlines and it is really difficult to lure customers out of their existing brands. Power of Suppliers is low. The airline suppliers are mainly aircraft manufacturers, airports, fuel companies and there isn't a lot of cutthroat competition among suppliers. Also, the likelihood of a supplier integrating vertically is rare. Power of Buyers is medium to and increasing The cost involved with switching airplanes is decreasing as customers can access internet easily to compare and buy air tickets online nowadays. With emerge of budget airlines like Jetstar and AirAsia, more customers including travel agents and individuals prefer to take the budget airlines rather than full service airlines Availability of Substitutes is low For international airlines, the threat is quite low as airline is the only way for travelling to long destinations. Eg   from Australia to USA. For national airlines, the threat might be a little higher than international carriers as passengers can use ground travel like train or bus as substitute. By......

Words: 317 - Pages: 2

Porter 5 Forces Analysis of Computer Industry

... The FICCI-KPMG Indian Media and Entertainment Industry Report 2013 published a record 16% growth over the previous The report also states that the games industry in India will grow at a 22% CAGR to cross Rs. 4000 crore ($776m) by 2017. That means the video games industry in India will almost triple itself in 5 years.year, to Rs.1500 crore (Rs. 15 billion / $277 million). Sweet numbers. The console segment will overall grow at a rate of 19% CAGR, to reach Rs. 1900 crore ($351m) by 2017. The report is yet to take in other future factors such as the possible success/failure of PS4 and the upcoming Xbox. On the other hand, the Internet & Mobile Association of India estimates that 50% of India’s mobile users have access to gaming content on their devices. These numbers are expected to rise amid increased penetration of smartphones and tablets. Mobile gaming revenues in India typically have come through telecom operator partnerships, but this is expected to change by 2014, the report states, when sources such as app-stores and online marketplaces will dominate mobile revenues. This despite the fact that operators are now offering up to 70% revenue share to game publishers. As expected, the big challenge for game publishers is monetisation, as a chunk of mobile game revenue in India comes from ad-funded free-to-play games. This also might be due to the fact of limited high-speed connectivity of smartphones and tablets alike, and limited access to credit cards. On a......

Words: 654 - Pages: 3

Porters Analysis

...Porter's 5 Force Analysis Rivalry (High) Rivalry within the Canadian Airlines Industry is relatively high although WestJet and Air Canada are the two largest companies. This is due to various reasons which include difficulties in exiting the company,high levels of demand and price competition. The demand for the industry is huge and its a billion dollar market which airline companies want to control. The Airlines Industry is highly saturated on domestic and international levels which creates high rivarlries. Companies compete through prices, offering various products and customer service. Market Share is created in this market through price competition, so when major company decreases their price many competitors must price match in order to keep the rivalry strong. Also, exiting the industry is highly difficult due to sunk costs and losses during the liquidation process. Buyer Power (High) Buyer Power for this industry is high due to the large number of airlines in the industry. Most consumers are price sensitive which will force most competitors to adapt. This can be done through lowering prices and/or offering different products such as first class, paid in-flight cafe, limo services, etc., to maintain market share. Due to high price sensitivity and the buyers power to switch, many lower class airlines can avidly compete against larger airlines. Buyers can pick and choose which airlines to fly with and that is becoming easier with their ability to quickly compare......

Words: 602 - Pages: 3

Porter Five Forces Analysis

...3/9/13 Porter five forces analysis - Wikipedia, the free encyclopedia Porter five forces analysis From Wikipedia, the free encyclopedia Porter five forces analysis is a framework for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven to normal profit. Three of Porter's five forces refer to competition from external sources. The remainder are internal threats. A graphical representation of Porter's Five Forces Porter referred to these forces as the micro environment, to contrast it with the more general term macro environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a business unit to re-assess the marketplace given the overall change in industry information. The overall industry attractiveness does not imply that every firm in the industry will return the same profitability. Firms are able to apply......

Words: 1892 - Pages: 8

Porter Five Forces in the Robotics Industry

...Robotics Industry Iryna Varniaga University of Maryland University College Fall 2013 Turnitin score: 25% Porter’s Five Forces in the Robotics Industry “Porter’s five forces”: Introduction. “Porter’s five forces” is widely applied in today’s business world. Harvard Professor Michael E. Porter’s first HBR article “How competitive forces shape strategy” was published in 1979. It became revolutionary in the field of strategy. Porter’s subsequent work has brought big changes to the study of competitive strategy for corporations, regions, and nations. With assistance from his colleagues from Harvard Business School, Porter continues to update and extend his classic work, providing practical guidance for users of the framework (Porter 2008, Editor’s Note). According to Porter, dealing with competition is the main task of the strategist. But managers often think of competition too narrowly. Instead of considering just the current competitors, Porter suggested including four other competitive forces as well. They are customers, suppliers, potential entrants, and substitute products. All these five forces result in extended rivalry that defines an industry structure and the nature of competition within an industry. Although the configuration of five forces differs by industry, the underlying drivers of profitability are the same. The strongest competitive forces define the profitability of an industry and are very important to strategy formulation (Porter,......

Words: 1731 - Pages: 7

Aldi Porter Analysis

...provided so far in the unit. The reference list does not count towards the word limit. On iLearn you can find the Aldi case. This assignment, as well as the group assignment, is based on this case. It is also advisable to consult the marking criteria on iLearn. Question 1 The information in the case (Aldi) is not sufficient for making an informed and complete industry analysis based on Porter’s five forces. Nevertheless, it provides much information that would inform such an analysis. Discuss the US supermarket industry based on Porter’s five forces. Note that some analysts may separate, for example, supermarkets and large discount retailers. Thus be careful to identify the industry and the actors. Give clear examples of actors in each category (competitors, customers, suppliers, substitutes, and potential entrants). Identify which information you find relevant to a Porter’s-five-forces analysis and what implications that information would have for the different forces (for example if it indicates strong or weak forces or strengthening or weakening forces). Make an overall assessment of the US supermarket industry. In addition to the explicit information in the case, you are encouraged to make reasonable assumptions (provided that you state them) based on your general knowledge and information from our discussions in the lectures. That is you may analyse the forces based on sound evidence, arguments and general knowledge. Remember that it is very important to be......

Words: 758 - Pages: 4

Porter Analysis for Pharmaceutical Industry in Palestine

...Porter’s Analysis: Pharmaceutical Industry | Submitted to Dr. Grace Khoury | By: Asem Masri. Student No. 1125420 | 11/6/2014 | 1. Contents Introduction 1 Porter’s Five Forces Analysis 1 Threat of new entrants 1 Rivalry among existing firms 2 Threat of substitute products 2 Bargaining power of buyers 3 Bargaining power of suppliers 4 Relative Power of other stakeholders 4 Conclusion 5 References 5 Introduction The pharmaceutical industry in Palestine is one of the most profitable industries, with the Palestinian companies owning 55% and 30% market share of the private and public sectors respectively, and high potential of growth even more, in a market estimated at around USD 100 million. All these companies mostly reproduce generics that are seen as commodities rather than differentiated, and highly depend on preferred agreements with pharmacies, doctors, hospitals and medical centers to serve both as their marketing and distribution channels. All operating firms in the industry are publicly traded companies, are highly controlled and regulated, depend heavily on technology and require vast financial resources. Because of the large size , high complexity and vast financial requirements of the industry, it won’t be a straight forward task to decide on whether this industry is attractive to enter or not, without performing proper STEEP and industry analysis. In this case, we will focus on performing pharmaceutical industry analysis using......

Words: 1927 - Pages: 8

Porters National Diamond Analysis

...Part 1: Porters National Diamond Analysis 1. Introduction The purpose of this report is to evaluate the attractiveness of Peruvian wine industry. In this report, we will discover the overall competitiveness and investment attractiveness of Peruvian wine industry. Porter’s National Diamond Analysis will be used as a tool to identify the opportunities and threats of Peruvian wine industry. Two-market entry strategy will be identified and recommended. The advantages and limitations of both strategies will also be discussed in this report. Peru is located in the west of South America, and has borders with Ecuador, Colombia, Brazil, Bolivia and Chile (peru.travel) Wine industry from Peru was brought from Spain after its conquest. (Ayala) 1. 2. Factor conditions 1. 2.1. Physical resources Peru soils are nearly level to steep. They are on drumlins and sloping to steep areas of glaciated uplands. Slope ranges from 0 to 35 percent. The soils formed in dense, loamy glacial till of Wisconsin age that is derived mainly from mica schist, granite, and phyllite. Peru soils are moderately well drained. Permeability is moderate in the solum and moderately slow or slow in the substratum. The climate is humid and cool temperate. Mean annual rainfall ranges from 30 to 50 inches and mean annual air temperature ranges from 40 to 47 degrees Fahrenheit. The frost-free season ranges from 90 to 160 days.(National Cooperative Soil Survey , 2013) The high relief and steep slopes of the streams...

Words: 3878 - Pages: 16

Porter Airlines Strategic Analysis

...Executive Summary Porter Airlines, a short-haul commercial airliner established in 2002, have enjoyed significant and steady growth since inception. The concern now is to devise a solution that will allow Porter to continue its controlled expansion strategy, as it has been so successful and integral to the growth of the company over the past several years. Situation Analysis Porter Airlines operates in a fiercely competitive airline industry, where competitors compete based on price, service, and comfort of passengers, and frequently engages in predatory practices to squeeze out smaller players in the market. The performance of the company depends on external environment factors, such as economic factors of oil and fare prices that will influence margins, or political factors impacting the future bridge and accessibility improvements to the city center airport. Porter’s competitive advantage is linked to the convenience of the Toronto City Center Airport, such as proximity to business core and expedited security and check-in times. Additionally, a critical success factor for Porter is to maintain the commercial exclusivity on the airport, to take advantage of cost savings as a result of being the owner, tenant, and operator. Competitive advantage is also a result of operating a single class of aircraft that has significant cost and operational efficiencies. Alternatives and Recommendation ------------------------------------------------- Several alternatives were......

Words: 3097 - Pages: 13

Porter Analysis

...Porter’s Analysis Porter’s analysis frequently used to identify an industry’s structure in order to determine corporate strategy and helps determine an industry’s weaknesses and strengths. Porter’s model can be applied to any segment of the economy to search for profitability and attractiveness. The five forces identified are industry rivalry, threat of entry, bargaining power of suppliers, bargaining power of buyers and threat of substitutes. These forces determine an industry structure and the level of competition in that industry. The stronger competitive forces in the industry are the less profitable it is. An industry with low barriers to enter, having few buyers and suppliers but many substitute products and competitors will be seen as very competitive and thus, not so attractive due to its low profitability. Rivalry among existing competitors or our industry rivalry – this force is the major determinant on how competitive and profitable an industry is. In competitive industry, firms have to compete aggressively for a market share, which results in low profits. Threat of new entry – this force determines how easy (or not) it is to enter a particular industry. If an industry is profitable and there are few barriers to enter, rivalry soon intensifies. When more organizations compete for the same market share, profits start to fall. It is essential for existing organizations to create high barriers to enter to deter new entrants. Bargaining power of......

Words: 378 - Pages: 2

Porter Analysis

...made by consumers. B. Ford’s business unit strategy would be differentiation. It states that Ford is focused on three strategic priorities including accelerating the pace of progress for their One Ford plan (one team, one plan, one goal), delivering product excellence with passion, and driving innovation in each part of their business. They fee, they are innovative and risk takers to a comfortable level. They consider themselves a technological leader and are always looking ahead and developing affordable, accessible solutions to help meet the needs of future transportation industry. C. Porter’s Five Forces Analysis Ford holds weekly business plan review meetings to review all elements of the business with senior management representing all business units. There are special review processes, scorecard reviews and general risk assessments done on a regular basis as well. New entrants This industry has a very high barrier to entry mark. There are substantial fixed costs, existing brand names, and dealership models nearly impossible to mimic, as with Ford, are highly recognizable and hard to compete against. Ford does not view new entrants as a threat when assessing their business risks. Substitute products Public transportation may be viewed as a substitute for their product and as oil prices rise and fall, as well as fuel costs, the threat of this substitute increases and decreases. These complications have made Ford’s innovation and technology leadership more......

Words: 901 - Pages: 4

Porter Analysis

...Threat of new Entrants – Low The Consumer Technology Industry sets difficulties for new entrants to the market; therefore it suffers relative low threat of new entrants on to compete with market share. This type of industry sets a hard entry barrier for new consumers to compete with existing and well established companies such as Apple Inc., Dell Computers and Sony, who operate with use economies of scale and product differentiation to compete between each other. The technology industry is a difficult industry to penetrate if one is looking to start a small business. It requires great amount of capital invested for manufacturing, research and development and high labor force to operate the machine in order to increase production, on a goal to matching production of bigger firms. Companies like Apple Inc., Dell and Sony take advantage of multinational resources and transfer production to other countries where they are able to achieve greater production amount, for a lower cost, and also where labor is relevantly lower than in the United States. The advantage of this is reaching a lower cost of goods once it hits the market, promoting competition and higher returns for these mega companies. In order to achieve economies of scale, a great amount of capital requirement in necessary. These large corporations run on great amount of self-operated and man-operated machinery that requires great investment to be built, operated, and serviced. Also to design the machinery a......

Words: 1728 - Pages: 7

Industry Analysis of the Pharmaceutical Industry

...Corporate Development Strategies Faculty 02 – Economics and Business Administration Johann Wolfgang Goethe-University Frankfurt Industry analysis of the pharmaceutical industry Written assignment Submitted by: Heiko Kreuz, 4897736, s5706079@stud.uni-frankfurt.de Janine Seelinger, 4896818, s1010710@stud.uni-frankfurt.de Dana Winkler, 4497800, s1099437@stud.uni-frankfurt.de Supervisor: Prof. Dr. Lars Schweizer November 6, 2015 Table of contents 1 Introduction...........................................................................................................................1 2 Theoretical framework of Porter’s Five Forces ........................................................1 3 Industry analysis by means of Porter’s Five Forces ................................................2 3.1 Competitive rivalry ................................................................................................... 2 3.2 Bargaining power of suppliers.................................................................................. 2 3.3 Bargaining power of buyers ..................................................................................... 2 3.4 Threat of substitutes ................................................................................................. 3 3.5 Threat of new entrants .............................................................................................. 3 3.6 The regulators ............................

Words: 1934 - Pages: 8

Porter Five Forces Analysis

...Porter's five forces analysis is a framework for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven to normal profit. Three of Porter's five forces refer to competition from external sources. The remainder are internal threats. Porter referred to these forces as the micro environment, to contrast it with the more general term macro environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a business unit to re-assess the marketplace given the overall change in industry information. The overall industry attractiveness does not imply that every firm in the industry will return the same profitability. Firms are able to apply their core competencies, business model or network to achieve a profit above the industry average. A clear example of this is the airline industry. As an industry, profitability is low and yet......

Words: 298 - Pages: 2

IRYU-Team Medical Dragon S04E06 WEB x264-WaLMaRT [eztv] | Iron Fist | 28-11-2018, 16:48