Methanex 5 Forces Amended
Porter’s Five Forces:
Portal Forces
Description/Analysis
Threat of New Entry
Threat of new entry is said to be low; due to the capital requirements needed to establish and manufacture, and other financial obligations associated, presenting high barriers for a new market entrance.
Bargaining Power of Suppliers
The suppliers’ power is high. This comes at the back of the scarcity and rareness of the natural resources used in the production of Methane’s unique product.
Threat of Substitutes
No existing substitute product is currently in the market, that’s why it is safe to say that the threat of substitutes is low. Also, the product is cost-effective.
Bargaining Power of Buyers
Bargaining power of buyers is low, being the market leader in the supply of the methanol global customers, therefore:
1. Methanex prices were set in the industry as the standard for contract price rates (benchmark)
2. It published the Methanex Non-discounted reference price (MNDRP) which was adopted by news outlets and industry reports firms as the general benchmark price for methanol contract prices
3. After the success of MNDRP, the company posted the Methanex European contract price (MEPCP) and Methanex Asian posted contract price (MAPCP)
Internal Rivalry
The internal rivalry is low because other competitors, within the methanol industry, produce other chemicals. Methanex is dedicated to produce methanol, that edged the company to be the main dominant in the market or otherwise it will be a competitive industry. Methanex’s market share is relatively high and will continue to expand and gain market share over the competitors.
Portal Forces
Description/Analysis
Threat of New Entry
Threat of new entry is said to be low; due to the capital requirements needed to establish and manufacture, and other financial obligations associated, presenting high barriers for a new market entrance.
Bargaining Power of Suppliers
The suppliers’ power is high. This comes at the back of the scarcity and rareness of the natural resources used in the production of Methane’s unique product.
Threat of Substitutes
No existing substitute product is currently in the market, that’s why it is safe to say that the threat of substitutes is low. Also, the product is cost-effective.
Bargaining Power of Buyers
Bargaining power of buyers is low, being the market leader in the supply of the methanol global customers, therefore:
1. Methanex prices were set in the industry as the standard for contract price rates (benchmark)
2. It published the Methanex Non-discounted reference price (MNDRP) which was adopted by news outlets and industry reports firms as the general benchmark price for methanol contract prices
3. After the success of MNDRP, the company posted the Methanex European contract price (MEPCP) and Methanex Asian posted contract price (MAPCP)
Internal Rivalry
The internal rivalry is low because other competitors, within the methanol industry, produce other chemicals. Methanex is dedicated to produce methanol, that edged the company to be the main dominant in the market or otherwise it will be a competitive industry. Methanex’s market share is relatively high and will continue to expand and gain market share over the competitors.