China Energy Industry - Porter’s Five Forces Strategy Analysis

The People’s Republic of China is often referred to as the home of the Red Dragon which in oriental terms is considered to be auspicious and an indicator of prosperity and a storehouse of wealth. The PRC was not always aware of its self reliant resources till the time it moved ahead of the Russian dependence and extracted its own resources wherein it has produced energy from oil and progressed to capitalizing on its other natural resources like gas, coal and nuclear energy as well.

The PRC however has also faced environmental concerns and in addressing the same has invested in considerable policy change measures as well as the required technological support for developing clean efficient and sustainable energy from renewable sources.

The Chinese oil consumption is a major factor in the global markets and in order to correct the net import balances, the PRC policy is oriented towards developing alternate sources of power from nuclear or other sustainable energy sources. The demands of the industry leading to higher energy requirements are areas wherein the government effort has been directed towards meeting the WTO objectives as well as entering the world table as a nation that is progressive and equally in sync with the environment.

Aruvian's R'search analyzes The China Energy Industry in Michael Porter’s Five Forces Analysis. It uses concepts developed in Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Porter referred to these forces as the microenvironment, to contrast it with the more general term macro-environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace.