CNPC Strategy and Competitive Analysis in Mozambique Gas

CNPC Strategic Planning for Mozambique Natural Gas

According to Porter’s Five Forces, the degree of competition in an industry depends on five fundamental competitive forces. Determining the totality of these forces generates the industry's ultimate profit potential, measured by long-term returns on invested capital. However, not all companies operating in the industry have the same potential for return. Corporations differ in their potential for profit insofar as they are more or less apt to manage the ensemble of forces that characterise the industry. When a market presents an agent that orders all industries along a supply chain, the introduction of competition is hampered. In the case of the Mozambique natural gas industry, CNPC has shown interest in forming a partnership with the Mozambique government.

Theoretical Framework of Porter’s Model

This theoretical revision presents the main elements of Porter's Five Forces model, which allows for the identification of essential structural characteristics and the determination of the competitive forces that shape the industry.

The Evolution of Business Strategy

According to Horwath (1997), the term strategy originated in the military environment before evolving into the business sector. Strategic thinking, as defined by managers, precedes strategic planning, aiming at the creation of a sustainable competitive advantage.

The concept of strategy contains common factors despite the different ways they are addressed. McMahan (2004) highlights the importance of organisations adapting to changes in the surrounding environment. It is necessary to have a long-term vision, which implies proactivity and anticipating changes by implementing an innovative strategy that meets the needs of the sector's evolution.

Key Components of Competitive Analysis

• a) Competitiveness analysis: Allows the company to identify the type of competitive advantage for its development; it aims at analysing the forces that provide competitive strengths and weaknesses that should be addressed.
• b) Analysis of the undertaking's situation: Evaluates the position occupied by goods or a market concerning sales and market shares in the long run, across various geographical areas.
• c) Analysis of priority competitors: Identifies direct or priority competitors for each product-market.
• d) Analysis of distribution penetration: Evaluates partnerships that possess negotiating power in the marketing process.
• e) Analysis of communication strength and quality: Identifies the means used, which can be decisive in competitive differentiation.
• f) Price policy analysis: Defines pricing according to the established strategy and the competitive landscape.