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<p align="justify">EATON is a multinational power management company with operational headquarter in Beachwood, Ohio, United States. The company was founded in 1911 in the United States by Joseph Oriel Eaton II. It has more than 92,000 employees globally and doing business in more than 175 countries (EATON, 2021). EATON has a primary two business sectors, electrical and industrial. The company provides critical support to critical infrastructure in the world. Its products serve airplanes, hospitals, data centers, vehicles, and electric grids. EATON is moving toward sustainability &; heavily investing in it. The company has pledged to reduce its landfill waster to Zero Percent by 2030. Porter&#8217;s five forces model is used to oversee threats and Opportunities the company is exposed to.</p>
<h2 align="justify">Competitive Rivalry in the Market</h2>
<p align="justify">The electric equipment industry has grown invariably and is one of the important proponents of growth. It is a crucial part of today&#8217;s industrial revolution. The industry is at the forefront of every industrial process and played a significant role in it. Products are tested against critical benchmarks of efficiency by the consumer. The industry is comprised of multinational companies operating across the globe. The most significant competitors of the EATON are General Electric and Schneider. Schneider has earned $2.48 billion in profit in the last fiscal year; it is ranked 413 in Fortune 500 companies (Fortune, 2021). On the other hand, General Electric has posted $95.214 billion in revenue (Fortune, 2021). EATON has published an annual income of $17.761 Billion (Macrotrends, 2021). The competitive rivalry is high due to the presence of multinational companies with specialized entities.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">Threats of substitutes are high when there are alternatives available in the market. These alternatives are of better quality and at a better price. There are many firms available in markets, and the switching cost is moderate among competitors. Consumers nowadays prefer eco-friendly products. Sustainability and efficiency is a benchmark for the consumer. Very few companies in the market are providing products based on those high standards. Eaton is evolving using the Internet of things to understand data better and incorporate it in its products (EATON, 2021). The company can reduce the threat of substitution by adapting the technology. All these factors result in low-level threats.</p>
<h2 align="justify">The Threat of New Entrants</h2>
<p align="justify">The barriers to entry are low where it is easy to set up a business in said industry. The cost of starting up a business is low, or the cost of capital is low compared to the return on capital. The electrical equipment industry is highly specialized in nature. The capital is not the only deterrent; the established companies are multinational and have significant resources. The new entrants must be an innovative products to disrupt the industry frontrunner. The industry is highly innovative, and companies have to spend a considerable amount on research to produce efficient products. The companies have exclusive contracts with the distributor with massive distribution channels, which provide them direct excess to the consumer. All these factors deter the new aspirant from pursuing business in this industry. Thus, the threat of new entrants is low.</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">Buyer can exert power if the products it purchases from the industry are standard or undifferentiated. The buyers, sure that they can always find alternative suppliers, may play one company against another (Porter, 1979). The buyers have few options available in the market, and the switching cost is moderate among different providers. The deciding factor for any consumer is cost and efficiency. In electrical equipment and industrial equipment, efficiency leads to price, and the product must be efficient, reliable, and safe. Then buyers associate with brands, and they tend to stick with sit despite moderate switching cost. The companies try their best to hold onto customers by leveraging customer loyalty and their market presence. Considering all the factors mentioned above, buyers have moderate bargaining power.</p>
<h2>Bargaining Power of Supplier</h2>
<p align="justify">The major suppliers in the electrical equipment industry are providers of raw materials. The raw material used in the industry is of various types. The suppliers can exercise high bargaining power if few suppliers are there, and they are offering a specialized product. The supplier can reduce its profit if there are many buyers of its products (Martin, 2019). These companies have multinational operational bases and have suppliers in different parts of the world. That gave them an edge over suppliers as they have multiple suppliers to choose from. In the electric equipment industry, the quality of raw material has a lot of weight. If the material is of good quality, it can significantly increase efficiency; otherwise, it can hamper it. Few companies have vertically integrated supply chains, or they have exclusive buying contracts with suppliers. These companies leverage their financial resources. By analyzing all the facts mentioned above, suppliers hold moderate bargaining power.</p>
<h2>References</h2>
<p>EATON. (2021). About Us. Available at: https://www.eaton.com/us/en-us/company/about-us.html<br />
EATON. (2021). R &; D Innovation. Available at: https://www.eaton.com/fr/en-gb/company/sustainability/shareholder-value/research-development-innovation.html#:~:text=Eaton%20in%202016%20invested%20%24589,billion%20in%20research%20and%20development.<br />
Fortune. (2021). General Electric. Available at: https://fortune.com/company/general-electric/fortune500/<br />
Fortune. (2021). Schneider Electric. Available at: https://fortune.com/company/schneider-electric/global500/<br />
Macrotrends. (2021). Eaton Revenue 2006-2021. Available at: https://www.macrotrends.net/stocks/charts/ETN/eaton/revenue<br />
Martin., M (2019) How Porter&#8217;s Five Forces Can Help Small Businesses Analyze the Competition. Available at: https://www.businessnewsdaily.com/5446-porters-five-forces.html<br />
Porter., E. M (1979) How Competitive Forces Shape Strategy. Available at: https://hbr.org/1979/03/how-competitive-forces-shape-strategy</p>
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