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Quadrise Fuels International Plc Porter Five Forces Analysis
Strategic Management Essays, Term Papers & Presentations
Porter Five Forces Analysis is a strategic management tool to analyze industry and understand underlying levers of profitability in a given industry. Quadrise Fuels International Plc managers can use Porter Five Forces to understand how the five competitive forces influence profitability and develop a strategy for enhancing Quadrise Fuels International Plc competitive advantage and long term profitability in Oil & Gas industry.
Brief overview of Quadrise Fuels International Plc
Quadrise Fuels International Plc is one of the leading firms in the Oil & Gas. Over the years Quadrise Fuels International Plc has redefined the ways of doing business in Oil & Gas. Quadrise Fuels International Plc is listed at London Stock Exchange (LSE) and have a market cap $ 33.09 million (USD).
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What are Porter Five (5) Forces
In his revolutionary article in Harvard Business Review (HBR) - "Five Forces that Shape Strategy", Michael Porter observed five forces that have significant impact on a firm's profitability in its industry. These five forces analysis today in business world is also known as -Porter Five Forces Analysis. The Porter Five (5) Forces are -
- Threat of New Entrants
- Bargaining Power of Suppliers
- Bargaining Power of Buyers
- Threat from Substitute Products
- Rivalry among the existing players.
Porter Five Forces is a holistic strategy framework that took strategic decision away from just analyzing the present competition. Porter Five Forces focuses on - how Quadrise Fuels International Plc can build a sustainable competitive advantage in Oil & Gas industry. Managers at Quadrise Fuels International Plc can not only use Porter Five Forces to develop a strategic position with in Oil & Gas industry but also can explore profitable opportunities in whole Oil & Gas sector.
Quadrise Fuels International Plc Porter Five (5) Forces Analysis for Oil & Gas Industry
Threats of New Entrants
New entrants in Oil & Gas brings innovation, new ways of doing things and put pressure on Quadrise Fuels International Plc through lower pricing strategy, reducing costs, and providing new value propositions to the customers. Quadrise Fuels International Plc has to manage all these challenges and build effective barriers to safeguard its competitive edge.
How Quadrise Fuels International Plc can tackle the Threats of New Entrants
- By innovating new products and services. New products not only brings new customers to the fold but also give old customer a reason to buy Quadrise Fuels International Plc ‘s products.
- By building economies of scale so that it can lower the fixed cost per unit.
- Building capacities and spending money on research and development. New entrants are less likely to enter a dynamic industry where the established players such as Quadrise Fuels International Plc keep defining the standards regularly. It significantly reduces the window of extraordinary profits for the new firms thus discourage new players in the industry.
Bargaining Power of Suppliers
All most all the companies in the Oil & Gas industry buy their raw material from numerous suppliers. Suppliers in dominant position can decrease the margins Quadrise Fuels International Plc can earn in the market. Powerful suppliers in Oil & Gas sector use their negotiating power to extract higher prices from the firms in Oil & Gas field. The overall impact of higher supplier bargaining power is that it lowers the overall profitability of Oil & Gas.
How Quadrise Fuels International Plc can tackle Bargaining Power of the Suppliers
- By building efficient supply chain with multiple suppliers.
- Developing dedicated suppliers whose business depends upon the firm. One of the lessons Quadrise Fuels International Plc can learn from Wal-Mart and Nike is how these companies developed third party manufacturers whose business solely depends on them thus creating a scenario where these third party manufacturers have significantly less bargaining power compare to Wal-Mart and Nike.
Bargaining Power of Buyers
Buyers are often a demanding lot. They want to buy the best offerings available by paying the minimum price as possible. This put pressure on Quadrise Fuels International Plc profitability in the long run. The smaller and more powerful the customer base is of Quadrise Fuels International Plc the higher the bargaining power of the customers and higher their ability to seek increasing discounts and offers.
How Quadrise Fuels International Plc can tackle the Bargaining Power of Buyers
- By rapidly innovating new products. Customers often seek discounts and offerings on established products so if Quadrise Fuels International Plc keep on coming up with new products then it can limit the bargaining power of buyers.
- New products will also reduce the defection of existing customers of Quadrise Fuels International Plc to its competitors.
Threats of Substitute Products or Services
How Quadrise Fuels International Plc can tackle the Treat of Substitute Products / Services
- By being service oriented rather than just product oriented.
- By understanding the core need of the customer rather than what the customer is buying.
- By increasing the switching cost for the customers.
Rivalry among the Existing Competitors
If the rivalry among the existing players in an industry is intense then it will drive down prices and decrease the overall profitability of the industry. Quadrise Fuels International Plc operates in a very competitive Oil & Gas industry. This competition does take toll on the overall long term profitability of the organization.
How Quadrise Fuels International Plc can tackle Intense Rivalry among the Existing Competitors in Oil & Gas industry
- By building a sustainable differentiation
- By building scale so that it can compete better
Implications of Porter Five Forces on Quadrise Fuels International Plc
By analyzing all the five competitive forces Quadrise Fuels International Plc strategists can gain a complete picture of what impacts the profitability of the organization in Oil & Gas industry. They can identify game changing trends early on and can swiftly respond to exploit the emerging opportunity. By understanding the Porter Five Forces in great detail Quadrise Fuels International Plc 's managers can shape those forces in their favor.
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