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<p align="justify">TransCanada, commonly known as TC Energy, is a major North American energy company based in Calgary, Canada. The company was formed in 1951. The company&#8217;s main concentrated areas are the Canada, United States, and Mexico. The company is a significant midstream company in North America. It builds and operates energy infrastructure. The company operates oil and natural gas pipelines in North America. It includes our 93,300 km network of natural gas pipelines, which supplies more than 25 percent of the clean-burning natural gas consumed daily across North America (TransCanada, 2021). The company owns the Keystone Pipeline, which links the western Canadian crude oil to refineries (TransCanada, 2021). It generates electricity from natural gas and Nuclear energy in Canada and the US. Porter&#8217;s five forces model is a helpful tool to identify threats and opportunities faced by TransCanada in the business world.</p>
<h2 align="justify">Competitive Rivalry in the Market</h2>
<p align="justify">The midstream industry is concentrated in the world. It results in furious rivalry between the companies. The US and Canada are both in the top 10 oil producers of the world (NS Energy, 2020). The majority of the industry is ruled by these companies in North America, including Enbridge, Energy Transfer, Kinder Morgan, and TC Energy. Major midstream companies are relatively equal in size, power, and capabilities (Datamonitor, 2009). TC Energy posted annual revenue of $9.6 b in 2020 (Forbes, 2021). American-based Kinder Morgan posted yearly revenue of $11.7 B in 2020 (Fortune, 2021), while the industry runner Enbridge posted revenue of $37.735 B in 2020 (Fortune, 2021). There is an intense competition by viewing all these factors and considering a global conglomerate in the midstream oil and gas industry.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">The mid-stream industry is under immense pressure to reduce its carbon emission. The industry is the backbone of fossil fuel products. Climate activist is forcing companies to halt those projects. There is a high risk of spillage and damaging the earth. On the other hand, it provides the only viable option to transport products from landlocked to oil and gas fields. Railway, Trucks, and barrages are the only available solution at that scale (Earthworks, 2021). All these solutions pose some threats to climate and human beings. The railway seems to be a viable solution now, but it also poses a threat to human life (BBC, 2018). There isn&#8217;t any solution available at that moment that can replace or disrupt the industry. The threat of substitution is low.</p>
<h2 align="justify">Threat of New Entrants</h2>
<p align="justify">The oil and gas sector is highly regulated. Governing bodies and government regulates the industry. The firms to enter into this industry need to have a solid ability to raise funds, which becomes rather complicated in the presence of substantial sunk costs and high assets (Worthington, 1995). The investor will not get the return he should because of the availability of other resources and a decrease in demand for fossil fuels. World oil demand will plateau in the late 2030s and could by then have begun to decline (Reuters, 2020). The industry is already saturated, and competition is high. Considering the facts mentioned earlier, the threat of new entrants remains low.<br />
Bargaining Power of Buyers</p>
<p align="justify">Buyers can significantly impact a company&#8217;s product and selling decisions. The most substantial power that buyers can exert is to lower prices, impacting the profit potential (Luenendonk, 2019). Oil and gas energy has a complex supply chain, including producers, transporter, marketing companies. The significant buyers of oil and gas industries are oil refiners, state oil companies, and oil trading and distribution companies. Midstream activities include the storage, processing, and transportation of oil and gas products. The companies are responsible for building and developing the infrastructure. It decreases the cost of transportation and provides safety and security. The majority of landlocked oil and gas fields require their services to get their product to market. There is no alternate available, which transportation means can use at that scale, which is irreplaceable for now. All these factors result in minimum leverage to the client. It is to control the quality of certain oil products. The buyer’s only power is getting a better deal.</p>
<h2 align="justify">Bargaining Power of Suppliers</h2>
<p align="justify">The primary supplier of the industry is equipment suppliers. The oil production equipment directly links with the quality of the product, and malfunction in it can cost losses of millions of Dollars (Porter, 1979). The market is concentrated, and there are not many suppliers who can deliver sophisticated products. The quality of the product can directly impact the industry. The end product is the backbone of the global economy. The consumers are also limited, so in this case, both depend upon each other. Industry plays a crucial role in oil and gas exploration, and there isn&#8217;t any other solution. The supplier holds moderate to higher bargaining power in the midstream industry.
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<h2 align="justify">References</h2>
<p align="justify">BBC. (2018). Lac-Megantic: The runaway train that destroyed a town. Available at: https://www.bbc.com/news/world-us-canada-42548824<br />
Earthworks. (2021). Alternatives to Pipelines. Available at: https://www.earthworks.org/issues/alternatives_to_pipelines/<br />
Forbes. (2021). TC Energy. Available at: https://www.forbes.com/companies/tc-energy/?sh=736b316897a1<br />
Fortune. (2021). Enbridge. Available at: https://fortune.com/company/enbridge/global500/<br />
Fortune. (2021). Kinder Morgan. Available at: https://fortune.com/company/kinder-morgan/fortune500/<br />
Luenendonk. M. (2019). Bargaining Power Of Buyers &#8211; Porter’s Five Forces Model. Available at: https://www.cleverism.com/bargaining-power-of-buyers-porters-five-forces-model/<br />
NS Energy. (2020). The top ten largest oil-producing countries in the world. Available at: https://www.nsenergybusiness.com/features/top-oil-producing-countries/<br />
Porter., E. M (1979). How Competitive Forces Shape Strategy. Available at: https://hbr.org/1979/03/how-competitive-forces-shape-strategy<br />
Reuters. (2020). OPEC, in major shift, says oil demand to plateau in late 2030s. Available at: https://www.reuters.com/article/us-oil-opec-outlook-idUSKBN26T24C<br />
TransCanada. (2021). Natural Gas Operations. Available at: https://www.tcenergy.com/operations/natural-gas/<br />
TransCanada. (2021). Oil and Liquids Operations. Available at: https://www.tcenergy.com/operations/oil-and-liquids/<br />
Worthington, P. (1995). Investment, Cash Flow, and Sunk Costs. Available at: The Journal of Industrial Economics 43(1) PP 49-61.</p>
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