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Introduction

Fossil fuels are one of the major causes of environmental pollution, and their rate of influence

is increasing because their demand increases exponentially over time, as a result of population

growth in the world. In addition, the production of fossil fuels is expensive, which is reflected in

the sales prices of the products. For this reason it is necessary to investigate the creation of new

alternatives that meet the same objective, but are cheaper in their production and do not generate

pollutants to the environment, as is the case of biofuels. The introduction of biofuels opens up a

broad and attractive market where not only scientific and environmental aspects are taken into

account, but also political, social, economic and business aspects.

In Colombia the biofuel industry started some years ago, the biofuels produced in Colombia

are bioethanol that is made from sugar cane and biodiesel mainly made from wax palm.

(National Federation of Biofuels of Colombia, 2015). In the article elaborated by (Velasquez et

al., 2012) a study was carried out on the competitiveness potential that bioethanol has in the

Colombian market oriented from the 5 competitive forces created by Michel Porter, where each

one of these competitive forces was analyzed and detailed separately. The results obtained

through this analysis were as follows: for the item "threats of entry from competitors" it is

expressed that there is a great difficulty when entering the bioethanol production industry, given

that a large financial pillar is necessary, as well as a previous infrastructure in order to be able to

have significant competition in the sector. For the second item "supplier bargaining level" it was

found that there is strong power in production methods and raw materials which generates very
little bargaining power on the part of suppliers. For the third item "consumer/buyer bargaining

level" a reliable and relatively safe commercial bargaining scenario is shown. In the fourth item

"level of threat of substitute products or services" it was found that there is great competition due

to the great variety of products in the market. The Fifth item "level of rivalry between

competitors within" expresses that there is a competitive rivalry and that it is positive as it drives

the development of the industry. And the last item "level of positive government influence"

shows that government policies positively support industry.

Conclusion

In Colombia, the bioethanol industry is attractive and offers a favorable vision for the entry of

new companies given that there is a high demand for both energy and fuels, in addition to the

introduction of new companies will increase competitiveness among them and promote the

development of this industry, In the same way, the high variety of alternative energies such as

conventional ones and the variety of fuels found in the market, be they fossil fuels or biofuel,

increase the development of the industry since the companies belonging to this industry look for

alternatives to accommodate the attacks of the competition. In addition, there is support from the

government that encourages the introduction of new companies and investors.

In this way, the 5 competitive forces model makes it possible to determine the level of

competition that exists in an industry for the purpose of elaborating a business strategy, as well

as helping to determine how attractive that industry is with respect to profitability and investment

opportunities.

Bibliography

National Federation of Biofuels of Colombia. (2015). National Federation of Biofuels of

Colombia. Retrieved September 6, 2019, from http://www.fedebiocombustibles.com/nota-

web-id-2854-titulo-etanol_y_biodiésel_en_colombia.htm

Velasquez, R., Montoya, R., Alonso, I., Restrepo, M., Porter, C. D. M., & Velasquez, A.

R. (2012). Analysis of the competitive potential of bioethanol in Colombia: an approach

from the 5 competitive forces of Michael Poeter.