<p style="text-align: justify;">Pacific Gas and Electric Company (PG&;E) is an American Public limited firm. It has been dealing in the natural gas and electricity industry, providing services to almost 5.2 million households in certain areas of US states. These states include two-thirds of California, Northern Santa Barbra County, nearly in Nevada and Oregon State. Dealings in the natural gas and electricity industry. The organization was founded in 1905, and the location headquarter is based in San Francisco, California.</p>
<p style="text-align: justify;">As of 2020, the organization has made a plausible revenue of 18.463 million US dollars. The company employees areestimated at 24,000 (PG&;E, 2020). The observation of the global natural gas and electrical business would allow Porter&#8217;s evaluation of five forces to maintain prospective strategies to better comprehend the organization&#8217;s situation.</p>
<h2 style="text-align: justify;">Competitive Rivalry in The Market</h2>
<p style="text-align: justify;">Competitive rivalries in the natural gas and electricity industry are significant, as natural gas and electricity are the requirements for the world today since so many states and industries rely on natural energy for manufacturing and production. As a result of this rise, the market for gas and electricity production and exploration has been captivated by significant firms and institutions. The United States is well located and becomes a crucial provider in its region, leading to strong competition between existing firms.</p>
<p style="text-align: justify;">The industry&#8217;s major competitors in the industry are Florida Power &; Light Co, Southern California Edison Co, Georgia Power Co, and Virginia Electric. The firm is trying to increase the retail sales in the US with the figure of 7.89 billion US dollars, while at the same time, other firms sales show the figure of 11.09, 9.22, 7.99 and 7.93 billion US dollars (Statista, 2020). The presence of these large companies in the industry thereby increases the competitiveness of the environment.</p>
<h2 style="text-align: justify;">Threat of Substitutes</h2>
<p style="text-align: justify;">There is a moderate to high threat of replacement in the natural gas and energy industries as there are many resources available with the development of renewable energy resources, such as solar, nuclear and wind energy. These alternative sources are necessary due to their performance, consistency, efficiency and innovation and integrated expenditures.</p>
<p style="text-align: justify;">Renewable energy expansion and utilization are linked to climate factors such as sunshine access and low humidity, rendering alternative energy sources somewhat to geographical limitations (Taha, 2018). A replacement product or service threat is strong when it provides a value proposition that distinguishes itself from current industry alternatives. The risk of gas and electricity replacements is moderate.</p>
<h2 style="text-align: justify;">The Threat of New Entrants</h2>
<p style="text-align: justify;">The threat posed by new enterprises in the gas and electricity industries is low, given that the electricity and gas industries operate around the world and the entry barriers to keep these companies away from the sector are strong enough. Furthermore, it is difficult for new firms to capture market share in the presence of existing players.</p>
<p style="text-align: justify;">In addition, capital requirement confines the firms to a certain limit which create hurdles in operations. With the financial hurdles aside, companies must stand up to government laws, control of resources and economies of scale enjoyed by large companies (Weller et al., 2015). Therefore, the newcomers have minimized room.</p>
<h2 style="text-align: justify;">Bargaining Power of Buyers</h2>
<p style="text-align: justify;">The Bargaining power of customers in the case of the natural gas and electricity industry is low to moderate because firms producing such resources are typically a tough lot. In the long term, this put pressure on the consumers and influences the profitability of the firms. With the availability of different firms in the industry, consumers can avail themselves of services from any one of them.</p>
<p style="text-align: justify;">However, a spike in natural gas prices has a global impact on the gas industry&#8217;s economics, affecting customers all around the world. Clients must pay for big suppliers&#8217; higher prices and high switching costs (Vigolo and Cassia, 2014). With this strategy in mind, the ability of customers to trade is strong.</p>
<h2 style="text-align: justify;">Bargaining Power of Suppliers</h2>
<p style="text-align: justify;">The power of natural gas and electricity suppliers to negotiate is moderate. The Electrical utility firms mostly produce and distribute the natural gas demand. The margins of the corporation may drop on the market for firms with the dominating position. Powerful service providers are using their negotiation power to charge specific prices from companies operating in the sphere of electricity services.</p>
<p style="text-align: justify;">In addition, the economy becomes dependant on such big firms, leaving them in a strong position (Yusuf et al., 2014). Therefore, the negotiating leverage of suppliers is moderate in the context of the natural gas and electricity sector.</p>
<h2 style="text-align: justify;">References</h2>
<p style="text-align: left;">PG&;E, 2020. PG&;E Corporation &#8211; Financials &#8211; Annual Reports and Proxy Statements. [online] Investor.pgecorp.com. Available at: https://investor.pgecorp.com/financials/annual-reports-and-proxy-statements/default.aspx.<br />
Statista, 2020. Utilities based on US electric retail sales 2019 | Statista. [online] Statista. Available at: https://www.statista.com/statistics/790785/us-utilities-based-on-electric-retail-sales/.<br />
Taha, TMAM, 2018. Competitive Analysis of the Global Oil and Gas Industry using Porter&#8217;s Five Forces Model.<br />
Vigolo, V. and Cassia, F., 2014. SMEs’ switching behavior in the natural gas market. The TQM Journal, 26(3), pp.300-307.<br />
Weller, S.D., Johanning, L., Davies, P. and Banfield, S.J., 2015. Synthetic mooring ropes for marine renewable energy applications. Renewable energy, 83, pp.1268-1278.<br />
Yusuf, Y.Y., Gunasekaran, A., Musa, A., Dauda, M., El-Berishy, N.M. and Cang, S., 2014. A relational study of supply chain agility, competitiveness and business performance in the oil and gas industry. International Journal of Production Economics, 147, pp.531-543.</p>