Porter’s Five Forces: Chevron
| Industry force | Strength | Provide a justification for your determination with examples | ||
| High | Medium | Low | ||
| Threat of new entrants | X | The oil energy industry has significant barriers to entry. A firm must invest massively in finance matters before entering the industry. Further, strict compliance requirements are likely to drive away new entrants. Thus, established brands like Chevron are strong enough not to worry about new entries to the market. | ||
| Power of buyers | X | The government determines the petroleum and related products. This makes the bargaining power of buyers low. For the sellers, there are no significant costs of maintaining buyers as they are free to move from one seller to another, and no significant influence is involved regarding the movement. | ||
| Power of suppliers | X | The threat of suppliers is low for Chevron in the oil and petroleum industry. Notably, this is so because the market is characterized by many suppliers (Li et al., 2022). The suppliers compete significantly, lowering their overall power in the market. Companies like Chevron rely on numerous suppliers, and a decision to be one supplier is unlikely to impact their operations. | ||
| Power of substitutes | X | The threat of substitutes is high for Chevron. Notably, this is due to the many competitors in the market that attempt to sell varying products, unlike Chevron. Further, the wake of renewable energy efforts has seen increased substitutes such as solar products and electric vehicles. Notably, these are a potential threat to Chevron’s products. | ||
| Rivalry among competitors | X | Rivalry between firms is considered to be medium. Notably, this is so because the government highly influences the petroleum and gas sector, and companies have minimal influence on the prices (Guo et al., 2022). Also, the presence of many buyers assures each company a relatively fair share in the market. | ||
| Complementors | X | Chevron enjoys complementary force from car manufacturers. This is so because car manufacturers and Chevron share the same buyers. As car manufacturers switch to electric vehicles, Chevron is pushed into a risky position. However, the output for electric cars remains low, thus making the threat medium. | ||
References:Guo, J., Long, S., & Luo, W. (2022). Nonlinear effects of climate policy uncertainty and financial Speculation on the global prices of oil and gas. International Review of Financial Analysis, 83, 102286. Li, M., Trencher, G., & Asuka, J. (2022). The clean energy claims of BP, Chevron, ExxonMobil and Shell: A mismatch between discourse, actions and investments. PloS one, 17(2), e0263596. |
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Question 
Porter’s Five Forces: Chevron
Porter’s Five Forces – Chevron
Complete the table below. For the company you’ve decided to assess (Chevron) in week 1, determine the strength of each of Porter’s Five Forces and of the complementors.
Justify your determination with examples.