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  • Porter's Five Forces Analysis of the Power Generation Industry

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    Rahul Durgia
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    Porter's five forces analysis of the power generation industry finds that: 1) Threat of substitutes is medium as different power sources can generate electricity but coal remains core; 2) Supplier power is high as coal demand outstrips supply and importing is expensive; 3) Threat of new entrants is high due to the industry being capital intensive and requiring complex regulatory approvals.

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    Porter's five forces analysis of the power generation industry finds that: 1) Threat of substitutes is medium as different power sources can generate electricity but coal remains core; 2) Supplier power is high as coal demand outstrips supply and importing is expensive; 3) Threat of new entrants is high due to the industry being capital intensive and requiring complex regulatory approvals.

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    16 views2 pages

    Porter's Five Forces Analysis of the Power Generation Industry

    Uploaded by

    Rahul Durgia
    Porter's five forces analysis of the power generation industry finds that: 1) Threat of substitutes is medium as different power sources can generate electricity but coal remains core; 2) Supplier power is high as coal demand outstrips supply and importing is expensive; 3) Threat of new entrants is high due to the industry being capital intensive and requiring complex regulatory approvals.

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    Porters five forces analysis:

    1. Availability of substitutes: Power does not have substitute but have different sources to generate. Coal being core raw material for thermal power plant which is scarce in nature. Moreover demand overtake suppliy.This make them to chase others sources of power genaration which includes nuclear sources, hydro sources and renewable sources. Therefore threat of substitute is medium. 2. Supplier power: Since Coal is scarce and demand is outstriping than supply. Moreover importing coal become expensive so supplier has high power. 3. Treat to new entrants: Due to hugh capital intensive industry and complex regulatory approval which creates barrier for entering in sector. 4. Buyer power: Industrial consumer demand is for power is high which gives them low barganing power and for retail consumers government regulates the price so company stands in good position , so therefore buyer power is medium. 5. Investment capicity:

    Plants, equipment and machinery requires huge investment moreover regulatory approval and licence from government is quite expensive so capital capacity is medium to high

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