<p align="justify">The Lukoil company is a multinational energy production company of Russia. Its headquarter is in Moscow. The company is specializing in extraction of businesses, sale of petroleum, transport, production, production of natural gas, and also petroleum products. The company is one of the biggest oil and gas company in Russia and working on global level. The company is improving its performances and quality of life in more than 100 countries across the world by supplying their products, heat and power (Lukoil, 2019).</p>
<p align="justify">Porter five force analysis helps the company in analyzing the industry and competition level through various factors. T helps in evaluating the opportunities and threats for the companies by considering different factors in the industry. Lukoil can use it for in-depth analysis. Here is the detailed Porter five forces analysis of Lukoil;</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">The Bargaining power of the buyers of Lukoil is low. The major buyers of the Lukoil are car and government owners. The product differentiation is low which makes consumers to stick to the brand as there are less competitors and consumer have to buy. The Lukoil’s market share is around 17% and has contracts with the government because of petrol stations. In the oil industry, prices are also set by government and hence, consumers have little control over prices. It is necessary for the company to increase the consumer base in order to maintain the brand image and profitability (Sudymoose, 2016).</p>
<h2 align="justify">Bargaining Power of Suppliers</h2>
<p align="justify">The suppliers bargaining power is high in the oil industry and so for Lukoil. They have great influence over prices, as they have strong grip on the production fields, and market of oil suppliers. They greatly influence the prices set for crude oil. Lukoil is having the benefit in this case as it has subsidiary in almost all the oil producing economies. Lukoil also work hard to maintain good supplier relationship, in order to have effective and efficient supply chain. It is necessary for Lukoil as suppliers in the oil and gas industry are limited and completely aware about their positions in the industry (Phillip, 2016).</p>
<h2 align="justify">Threats of New Entrants</h2>
<p align="justify">Threats from the new entrants are low in for Lukoil in Russia as the company is dominating in the industry. However, on a global level, there is a threat from new entrants, as many firms enter in this industry by analysing the profitability. However, there are limited entry barriers which are very strict and difficult for the new entrants to achieve, like rules and regulations, government involvement for the supply of oil, government intervention in setting prices, limited economies of scales, attracting the consumer base, and competing with big giants in the market (Pitatzis, 2016).</p>
<h2 align="justify">Threats from the Substitute Products</h2>
<p align="justify">Threats from the substitute products are low, as Lukoil is already dominating the Russian market, which gives it the edge over competitors. At this moment, consumers are unable to switch on other sources. Renewable sources of energies are introduced in very few European countries. The alternatives are solar power, wind power, and coal. Despite of this fact, the demand of oil increases every year by 10%. This makes the substitute products threats as a weak force, but still Lukoil should also look forward for other sources of energy (Studymoose, 2016).</p>
<h2 align="justify">Rivalry of Existing Players</h2>
<p align="justify">Lukoil is facing competition from both international and local companies like Rosneft, American oil companies, etc. These companies are able to make strong brand image and hence it is necessary for the companies to increase innovation to maintain the consumer base. Industry is dominating with big giants, thus, reducing the competition level from small companies. Prices are set according to the industry analysis, and switching costs are high for consumers, so it is necessary for Lukoil to maintain the consumer base and should attract more consumers (Phillip, 2016).</p>
<h2 align="justify">References</h2>
<p style="text-align: left;" align="left">Phillip, D. 2016. Lukoil case analysis. [Online], Available at: <a href="http://ctg1coosecurity.blogspot.com/2016/02/lukoil-case-analysis.html">http://ctg1coosecurity.blogspot.com/2016/02/lukoil-case-analysis.html</a>, [Accessed on: 22nd November, 2019].<br />
Pitatzis, A. 2016. Porter’s Five Forces Model for Oil and Gas Industry. [Online], Available at: <a href="https://energyroutes.eu/2016/05/23/porters-five-forces-model-for-oil-and-gas-industry/">https://energyroutes.eu/2016/05/23/porters-five-forces-model-for-oil-and-gas-industry/</a>, [Accessed on: 22nd November, 2019].<br />
StudyMoose. 2016. Pestle, Porter and SWOT analysis of Lukoil. [Online]. Available at: <a href="https://studymoose.com/pestle-porter-and-swot-analysis-of-lukoil-essay">https://studymoose.com/pestle-porter-and-swot-analysis-of-lukoil-essay</a>, [Accessed on: 22nd November, 2019]</p>