Business Strategy

Porter's Five Forces Model Industry Structure

Threat of new entrants: MEDIUM 

Starting up a gas company has a high risk as well as a high start up cost. To have a successful gas dispensary business you must take into consideration the competition that is presented. There is a lot of gas companies that Elizabethtown Gas has to compete with. ETG has to compete with rival prices as well as efficiency. Starting up a gas company has a very high start up cost which is also something that would need to be taken into consideration.

Bargaining power of customers: WEAK

Customers are not able to supply themselves with their own gas. wouldn’t be able to supply gas to their own homes unless they own a gas company. As stated above, starting your own gas company is very risky therefore, customers do not have much room for bargaining. 

Threat of substitutes:WEAK

Although there are substitutes for using gas in your home, they are usually more costly and not as efficient. The substitutes for gas include electric heating and solar. Both of these options are more costly than using gas. Electric heating can be extremely expensive if being used all through the winter time. This can also not be as efficient if there is a power outage in your area. Solar power heating is also very expensive and is not as dependable. 

Bargaining power of suppliers: MEDIUM

Elizabethtown Gas company uses a parent company, AGL Resources. ETG could possibly venture out and use other suppliers if needed. Although it is possible for the company to venture out, it is a lot easier to use the parent company. Using a parent company lets ETG have a direct supply. It is easy to depend on one specific supplier to supply your product. It is possible for the company to seek different suppliers but these companies do not have loyalty to ETG whereas the parent company does. 

Rivalry: WEAK
There are many other third party suppliers who provide natural gas in the same territory as Elizabethtown Gas. These different marketers have their own Natural Gas company. ETG does not make profit off of Natural Gas, they sell gas for the same price it is purchased. The company purchases by bulk and in the summer to store for the winter. ETG tries to provide customers with the most affordable prices. In the summer is it the best time to purchase natural gas since it is at its cheapest price. Since ETG owns all pipelines within it's territory and meters at premises, even if a customer goes to another marketer, the customer will still have to pay for maintenance of the meter and the transportation of gas going through the pipelines. Essentially a customer would have 2 bills. 

Porter's Competitive Strategies

Focused/Differentiation Strategy

-Serves 4.5 million customers across 7 states

-Partner with numerous third-party

-Entities (builders, realtors, plumbers, mechanical contractors, architects and engineer) to market the benefits of natural gas appliances

-Identify potential retention options early in the process for those customers who might consider converting to alternative fuels

-Serves 620,000 energy customers and 1.1 million service contracts across 17 states

-Performance driven by market leading position in Georgia as well as our June 2013 acquisition of approximately 33,000 residential and commercial relationships

-Make decisions as to termination, extension, or negotiation of contracts each year

-Selling natural gas service to residential commercial and industrial customers

-Providing customer service and billing customers for gas service

-Offering online customer information about natural gas and gas-fueled products

-Maintaining the gas pipeline infrastructure

-Responding to and repairing gas leaks

-Meet the gas supply delivery date requirement of their customers in the winter period