Ongc Porter 5 Forces

Topics: Petroleum, Vertical integration, Supply chain Pages: 2 (404 words) Published: June 18, 2011
5 FORCE MODEL: Threat of new entrants:
Due mostly to the industry that ONGCis in, its hard for there to be many new entrants. The only real threat that might arise would be another government funded Oil and Gas company. The reason for this is that a government would not have as hard a time raising funds and gaining access to resources. This is assuming that the company would be researching and developing on domestic soil. There is really not much of a threat because there are two main barriers to entry that would be stopping potential threats. These would be very high capital requirements as well as access to Cost disadvantages independent of scale. Bargaining Power of Suppliers: ONGC is a vertically integrated company that really deals in all areas from finding the product to refining the product to selling the product. With this being said there is not much to worry about the bargaining power of the suppliers. Bargaining Power of Buyers:

Not too critical for most companies as refining operations are a part of the complete supply chain, with the refining operations supplying the product to the marketing company. The industry that ONGC is a part of is different than many other industries. It is different in the fact that people really cannot go without their product. While over a long period it may be possible to find other fuels it is not really feasible in the short term

Threat of Substitutable Products: Although gas, solar power etc exist as substitutes, none of them are big enough to impact the demand of the petroleum products As stated above there is not a real alternative to oil at this time There is research being done to try and find substitutes.

With the price of oil as high as it is at this time, it is only giving more reason to try and find other fuel sources. This is where the main players in this market must be careful. Intensity of Rivalry among Competitors:

The rivalry in the industry was low till as the industry was tightly...
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