During the process of strategy development it is important to have an appropriate knowledge about external factors.
There are two main approaches to be used to a better knowledge about it. The first one is an analysis of general requirement that consists of six dimensions: political, economic, social, technical or technological, environmental, and legal (so-called PESTEL which is an acronym of these segments) and analysis of the organization’s microenvironment. Porter’s Five-Forces Analysis of Market Structure is one of the most useful tools for these purposes. According to Porter, the likelihood of firms making profits in a given industry depends on five factors: barriers to entry and new entry threats, buyer power, supplier power, threat …show more content…
Gazprom is a leading energy company which is focused on all stages of gas exploration, production and processing. Another area of focus is sales of oil, gas and gas condensate; sales of gas as a vehicle fuel, as well as generation and marketing of heat and electric power. Gazprom’s primary goal is to ensure an efficient, reliable and balanced supply of natural gas, other energy resources and their derivatives to consumers. Gazprom is among Russia’s top four oil producers.
The Company also owns major power-generating assets accounting for some 17 per cent of the total installed capacity of the national energy system. In addition, Gazprom ranks number one in the world in terms of thermal energy generation (Gazprom.com).
Let’s have a look on the results of analysis based on Porter’s Five-Forces Analysis of Market …show more content…
It happens when there are a lot of goods with the same characteristics which are almost undistinguishable from multiple producers or it also happens when the demand is very low and there is a surplus of goods in the market. In such circumstances, buyers are mostly focused on the cheapest price. In gas market, the buyer power is weak, due to huge demand and due to high investments in the mining process. However, on the other hand, there are lots of local and international limitations about fair market value and it should be considered as a game changer.
Supplier power is also rather weak since the main way to transit gas to Europe is a conduit of pipes. It required extremely big investments from Gazprom at the time of its creation, but it allows saving a lot of money now. The only one payment now is for transit of gas through other countries. In addition, it is important to say that there are at least two conduits to Europe which really restricts the abilities of other countries to dictate their conditions and prices for this
There are two main approaches to be used to a better knowledge about it. The first one is an analysis of general requirement that consists of six dimensions: political, economic, social, technical or technological, environmental, and legal (so-called PESTEL which is an acronym of these segments) and analysis of the organization’s microenvironment. Porter’s Five-Forces Analysis of Market Structure is one of the most useful tools for these purposes. According to Porter, the likelihood of firms making profits in a given industry depends on five factors: barriers to entry and new entry threats, buyer power, supplier power, threat …show more content…
Gazprom is a leading energy company which is focused on all stages of gas exploration, production and processing. Another area of focus is sales of oil, gas and gas condensate; sales of gas as a vehicle fuel, as well as generation and marketing of heat and electric power. Gazprom’s primary goal is to ensure an efficient, reliable and balanced supply of natural gas, other energy resources and their derivatives to consumers. Gazprom is among Russia’s top four oil producers.
The Company also owns major power-generating assets accounting for some 17 per cent of the total installed capacity of the national energy system. In addition, Gazprom ranks number one in the world in terms of thermal energy generation (Gazprom.com).
Let’s have a look on the results of analysis based on Porter’s Five-Forces Analysis of Market …show more content…
It happens when there are a lot of goods with the same characteristics which are almost undistinguishable from multiple producers or it also happens when the demand is very low and there is a surplus of goods in the market. In such circumstances, buyers are mostly focused on the cheapest price. In gas market, the buyer power is weak, due to huge demand and due to high investments in the mining process. However, on the other hand, there are lots of local and international limitations about fair market value and it should be considered as a game changer.
Supplier power is also rather weak since the main way to transit gas to Europe is a conduit of pipes. It required extremely big investments from Gazprom at the time of its creation, but it allows saving a lot of money now. The only one payment now is for transit of gas through other countries. In addition, it is important to say that there are at least two conduits to Europe which really restricts the abilities of other countries to dictate their conditions and prices for this