Exelon is one of the leading energy sector companies in North USA. It is doing business in 48 different states of America. The company is doing operations in generating the power, sale of power sector products, distribution, and transportation to different regions. Exelon is founded in Oct-2000. The Headquarter of the company is in Chicago, Illinois, U.S. It is doing business in the Energy sector.
It is a public limited company, listed in NASDAQ stock exchange also known as NASDAQ. Its CEO is Christopher Crane. The total income of the company is US 35.9. [3] According to the annual report 2017, its total assets are about US 116.700 billion. [4] Exelon’s stock price is 44.54 USD, as per the closing of Dec-04-2019. [1] More than 33,000 employees are working in this organization. [2] It is the largest electric company in the United States by revenue. The company also has its nuclear plant which is the largest in this sector in the United States.
Threats of New Entrants
The USA is one of the largest generators and consumers of energy in the world. In the United States, energy sector companies are operating in different divisions such as production, supply chain, marketing, etc. Exelon is one of them and has a good reputation in the market. Different complex base networks of companies are supported by different new products such as grid technology and different technologies such as wind and solar energy.
Every company is innovating its operations and going towards automation. Hence companies are focused to create a competitive advantage in the market. Therefore, we need to keep it in our mind, this industry requires a large initial investment to start the operations. Government institutions are monitoring this sector due to which there is pressure on companies to be environmentally friendly. Similar to its generation plants, a large amount of capital is needed to start an effective supply chain in the market. So, keeping all of these issues into consideration, it is a very difficult task for new entrants to enter because of existing barriers. Therefore threats of new entrant is very low in this market.
Threats of Substitutes
Companies are using the R&D department to innovate products, services, and operations. Supply chain, pricing strategy, lower prices through using less costly material. It helps in offering a cheap product in the market. As the ultimate product is common, new methods can play a role here as threats of substitutes. The use of wind energy and solar energy can play a role as a substitute for the traditional energy sector. Therefore, a moderate level of threats for substitute exists in the current market, where Exelon is doing business.
Bargaining Power of Buyers
Exelon is one of the distinguishable companies in this sector. It is also an American Fortune 100 company, serving almost 10 million customers in the USA. The company is using advanced technologies to generate energy which helps in cheap production. As the buyers are large in volume and the company owns a good reputation in the market. There are few large corporations generating energy and the demand for the product is never decreased. Therefore, the buyer is dependent on these organizations and do not have much bargaining power as an individual in this secto
Bargaining Power of the Suppliers
As per different reports, electricity generation from coal dropped 8% in the first quarter of 2019 as compare to 2018. Coal generated electricity was only 26% of total production in a sector. As companies are moving towards innovation in technologies. Therefore, if the company is dependent on coal and does not have an efficient supply chain. If the company’s performance relay on supplier due to the need for raw material. As a result, the bargaining power of suppliers will increase. Furthermore, when we talk about the company such as Exelon, the bargaining power of suppliers is less because the company is efficient in its operations, and it is also using several methods for generating the product. Hence, the company is not dependent on a single type of supplier in the industry. [5
Competitors Rivalry
The primary need of the customer in this sector is the same. Similarly, the product is also the same by nature. Therefore, competition exists in the market due to innovation in operations by different companies. Regardless of the size of the segment, every company is trying to tackle each other to increase market share and profitability by different strategies.
References
1 Yahoo Finance, 2019, Exelon Corporation (EXC), [online], Available at: https://finance.yahoo.com/quote/Exc?ltr=1
2 Exelon, 2019, ABOUT EXELON, [online], Available at: https://www.exeloncorp.com/company/about-exelon
3 UNITED STATES SECURITIES AND EXCHANGE COMMISSION, 2018, Annual Report, [online], Available at: https://www.sec.gov/Archives/edgar/data/1109357/000162828018001324/exc-20171231x10k.htm
4 UNITED STATES SECURITIES AND EXCHANGE COMMISSION, 2017, Annual Report, [online], Available at: https://www.sec.gov/Archives/edgar/data/1109357/000162828018001324/exc-20171231x10k.htm
5 Benjamin Storrow, 2019, 019 Power-Sector Trends Point to a Continued Rise in U.S. Emissions, [online], Available at: https://www.scientificamerican.com/article/2019-power-sector-trends-point-to-a-continued-rise-in-u-s-emissions/