$2.$ Use the industry analysis $($Five Forces of Porter model$)$ from exercise $1$ and evaluate

how your corporation can improve its competitive position through each force

according to the generic strategy identified. Provide evidence.

Substitute Products$/$Services

Chevron Corporation can reduce this force by improving the quality, maximizing value for

money and setting effective differentiation basis to dissuade customers from using substitute

product$/$service$.$ For instance, the company$$s refinery upgrades have enabled the production of

higher$-$quality $($Euro V$)$ gasoline that meets stricter emission standards while increasing energy

efficiency, reducing emissions, and lowering operating costs $($Chevron$,2020).$ These all align

with customer$$s shifted interested in sustainability, which reduces the likelihood of switching to

substitute products$/$services$.$

Competition

To strengthen the differentiation basis, the company must raise switching costs by developing

long$-$term customer relationships. Chevron must also invest in research and development

activities to identify new customer segments. Over the last decade, Chevron has $$invested more

than $$1$ billion in CCUS research, development and deployment$($Chevron$,2021).$ Through

Chevron$$s R&D facilities, the company has rapidly developed, screened and deployed materials

technologies that improve equipment performance, lower lifecycle costs and reduce operational

risk; thus, creating a strong competitive advantage.

Suppliers

For this force, developing long$-$term contractual relationships with suppliers from different

regions not only lowers their bargaining power but also allows Chevron Corporation to improve

its supply chain efficiency. As an illustration, Chevron counts with the Supplier Diversity$/$Small

Business Program, which is dedicated to developing and utilizing small, local, and diverse

businesses that help solve their most challenging problems while supporting their commitment to

fostering economic development and supporting local economies $($Chevron$,2020).$

Entry barriers

As Harding $(2014)$ explain, new entrants are less likely to enter a dynamic industry where the

established competitors such as Chevron Corporation keep defining the standards regularly $($p$.$

$32).$ This factor significantly reduces the window of extraordinary profits for the new firms thus

discouraging new potential entrants in the industry. In this case, the Chevron corporation, enjoys

one of the largest leading market positions and continues to capture opportunities to grow market

share of motor gasoline and diesel fuel under the premium Chevron and Texaco brands

$($Chevron$,2020).$ For instance, the company fulfilled the rollout of a loyalty program with a

leading grocery chain. This, coupled with the company$$s growth strategy, has allowed Chevron

to maintain the number one market position on the West Coast.

Buyers

Chevron could combat this force through building loyalty by embedding innovation and offering

excellent customer experience can raise the switching costs, which may reduce the buyers$$

bargaining power. In this case, the bargaining power of the Chevron consumers appears as

potentially low since $$most of the prices and costs involved in the oil industry are fixed by the

$2/9$

government agencies$($Chevron$,2021).$ Moreover, the switching costs to the other companies is

also relatively low, and there is an abundant number of buyers in the market, which reduces the

threat of switching to other competitors$$ products$/$services$.$ Due to this, Chevron may be able to

build a large customer base, improve the diversification of the profit level and reduces risks. The

higher the consumer base, the lower the bargaining power of buyers

create a different one for Campbell Soup Company.