Porter's Five Forces Analysis (born Porter five forces analysis) is a technique for analyzing industries and the development of business strategy, developed by Michael Porter of the Harvard Business School in 1979.
Porter's Five Forces Analysis include:
- threat of substitute products analysis
- threat of new entrants analysis
- market power of suppliers analysis
- market power of consumers analysis
- level of competition analysis
If we rank of the world's oil and gas companies on production characteristics, the top five will take Exxon Mobil Cogr. (USA), Shell (Netherlands), Vritish Petroleum (UK), OAO "Gazprom" (Russia), and Totale (France). However, based only on the direct comparison of performance indicators is not always possible to draw conclusions about the effectiveness of managerial policies, quality and style of leadership, and therefore merits of the competitive behavior of an enterprise. Please be aware that all companies operate in different geological conditions and develop fields with varying degrees of depletion. In addition, it should be noted that competition in the oil and gas industry is set not only in the mining sector, but in the struggle for raw materials as well as for possession of refining capacity.
Given that today the prices of the domestic market for fuel tend to be lower, especially important for companies, the issue of gaining a competitive advantage in this sector of business. In the extraction and processing of oil today in the lead Exxon Mobil Cogr. (More than 18% of the world total), Shell (12,6%) and Vritish Petroleum (9,2%), and in the extraction and processing of natural gas is indisputable OAO "Gazprom"
These TNCs to keep the old and the conquest of new markets using tools such as price competition, a wider range, rhythm and continuity of supply, etc. Companies are showing more and more fierce competition, which primarily lies in the fight for the long-term sources of raw materials. To achieve its goals, the company expanded its branch network by increasing its presence through mergers and acquisitions.
The concentration and centralization of capital, which has now taken on the character of mergers and acquisitions, reflects the natural tendency of the company to occupy a dominant position in the industry, why dwell on this phenomenon.
Competitive strategy of Shell Corp. also aims at comprehensive business expansion. The company seeks to diversify its business, including in his own field of business related industries. In particular, Shell Corp. 30protsentnuyu acquired a stake in Sanada Oil for $ 15.9 million One of the most important projects for entering new markets is the project for the supply of diesel fuel to Japan in the amount of about 30 tons per month. An important area of competitive strategy Shell Corp. is upgrading its network of petrol stations, access to new markets. In regions where Shell Corp. traditionally present, the volume of sales increased in 2025%. Shell Corp agreement. with a group of companies "Rinco" Cooperation and joint management of "Croatian petrochemical company" is an important step in the diversification of its business and gain a stronger position in the production and marketing of petroleum products. This agreement will help the company to gain a foothold in the Chinese and Mongolian markets. The company through its production and sales strategy has the following objectives: the transition to a single share and consolidation of mining assets of subsidiaries, the search for effective markets for petroleum products in the complete renovation and download its refineries, ensuring the rights of shareholders.
According to the information, briefly given above, it is possible to create the Porter’s table:
Coyne, K.P. and Sujit Balakrishnan (1996),Bringing discipline to strategy, The McKinsey Quarterly, No.4.
Porter, M.E. (March/April 1979). "How Competitive Forces Shape Strategy". Harvard Business Review.
Porter, M.E. (1980) Competitive Strategy, Free Press, New York, 1980.
Porter, M.E. (2008) The Five Competitive Forces That Shape Strategy, Harvard business Review, January 2008.
Michael Porter, Nicholas Argyres, Anita M. McGahan, "An Interview with Michael Porter", The Academy of Management Executive