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 mainly its operations in generating the power, sale of power sector products, distribution, and transportation to different regions. Exelon was founded in Oct-2000. It’s headquartered 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 revenue of the company is US 35.9 billion according to 2018.[3] Its total assets are about US 116.700 billion according to 2017.[4] Exelon’s stock price is 44.54 USD, according to the closing of Dec-04-2019. [1] The company employed more than 33,000 employees according to the company’s report of 2017. [2] It is the largest electric company in the United States by revenue. The company also has its nuclear plant and it’s the largest plant in this sector in the United States.
Threat of New Entrants
The USA is one of the largest producers and consumers of energy in the world. In the United States, energy sector companies are operating in different categories such as production, supply chain, marketing, etc. Exelon is one of them and has a good reputation in the market. Different complex infrastructure 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 automation is another spectrum at which companies are focused to create a competitive advantage for them in the market. It is not only reducing costs but also environmentally friendly, as people don’t have to work in bad conditions. There is another point that needs to be kept in mind, this industry requires a large initial investment to start the operations. Government institutions are regulating this sector that puts pressure on companies to strict environmentally friendly methods of production. 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 this sector. It means threats of new entrant is very low in this market.
Threat of Substitutes
Energy sector companies are using the R&D department to innovate the products, services, and operations. Supply chain, pricing strategy, lower prices through using less costly material can help 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. Using wind energy and solar energy can play a role as a substitute for the traditional energy sector. So all of these factors show that a moderate level of threats for substitutes 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 amount, the Company owns a good reputation in the market. There are few large corporations generating energy and the demand is never reduced. All of these factors show that the buyer is dependent on these organizations and they do not have much bargaining power as an individual in this sector.
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 new innovative technologies. So, 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. It can increase the bargaining power of suppliers. But 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 using the number of methods for generating the product. It means the company is not dependent on a single type of supplier in the industry. [5]
Competitors Rivalry
In this sector as the primary need of the customer is the same and the product is also the same by nature. It shows that competition exists in the market which is led by 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/