Premier oil company Essay Example | Topics and Well Written Essays - 1000 words

Premier oil company - Essay Example This paper will use the Porter’s forces to analyze Premier Oil environment. Force One: Buyer Bargaining Power The negotiating power of purchasers for Premier Oil is fairly moderate but projected to increase due to high demand from emerging nations in Africa and Asia and their energy demands will have to be met. Crude oil, therefore, is extremely crucial as these emerging nations use a projected 20% of energy supplied from oil. Intrinsically, in the present day world, oil has grown more into a commodity rather than a necessity owing to the underscoring of greener, alternate energy such as hydrogen-cell power-driven vehicles (Financial Times 2013). Force Two: Threat of Substitutes The lure of alternate energy has inflicted a bigger problem to the crude oil business today than it has ever had. Alternatives for bio-fuel or hydrogen cell driven vehicles are easily available to the people. Even nowadays, homes are fitted with solar-energy panels plus they are subsidized by governmen t subventions to counterbalance the huge startup costs required. The implications of automobile to the environment have rendered to the innovation of ‘bridge technologies’ or techno-fixes. This is because crude oil products such petroleum when used in automobile they release harmful gases into the environment. The availability of these techno-fixes is to offer an alternative for petroleum; such include hydrogen gas as energy. In respect to industrial life cycle, these techno-fixes represent the decline phase in which the industry may be supplemented by a new substitutes. However, while oil is even now a main energy fabricator, the premier oil company must study and develop fresh product, which can contend with these options. This is crucial for sustainability as well as for the productivity and development of the firm (History 2009). Force Three: Supplier Power The suppliers’ bargaining influence is low owing to the many corporations, which are frontrunnerswithin the oil business. The multinational companies, which entirely regulate the integration system forward and backward, power the immense bargaining influence of suppliers. The oligarchy system operates in favor of oil corporations, which provide distinct and exclusive products, which are ‘green friendly’ too to the surroundings. This alternative or ‘green friendly’ energy also poses a risk to the market-share since it generates future rivals to obtain market-share through their eco-friendly alternatives. Lastly, the multinational companies like premier oil hold a well-recognized brand image, which generates customer loyalty as well as similar familiarities for the contractors (Financial Times 2013). In respect to industrial life cycle, the phase where a company has established the dominant design is the innovation phase. Premier oil is always striving to acquire innovations and technologies to meet the consumer needs. Force Four: Rivalry amid Existing Busines ses The competitiveness within the business is very great and the bantam room for growth goes unmerited. The total number of other multinational oil companies vertically incorporated throughout diverse regions from the continent to