I am quite new to latex and I would like to know how to draw the following network diagram from a Markov Chain. Thank you. 
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Welcome to TeX.SE! We are happy to help! Please provide the source code that you have tried. In the case you have no idea, please refer to this to get you started. Then, update your question in case you are stuck. – M. Al Jumaily Jul 18 '19 at 18:18
Just for a starting point.
\documentclass[margin=3mm]{standalone}
\usepackage{tikz}
\usetikzlibrary{shapes,positioning}
\begin{document}
\tikzset{ell/.style={ellipse,draw,minimum height=0.65cm,minimum width=1cm,inner sep=0.25cm}}
\begin{tikzpicture}[>=stealth]
\node[ell] (e1)at (0,0) {\color{blue}$SOC1$};
\node[ell] (e2)at (5,2) {\color{blue}$SOC2$};
\node[ell] (e4)at (5,5) {\color{blue}$SOC4$};
\node[ell] (e3)at (-5,3) {\color{blue}$SOC3$};
\node[ell] (e5)at (-1,7) {\color{blue}$SOC5$};
\draw [->] (e4) to [out=-20,in=20]node[right]{\color{red}$p^{\phi} (0)$} (e2);
\draw [->] (e2) to [out=-20,in=-40,looseness=5]node[right]{\color{red}$p^{\phi} (1)$} (e2);
\draw [->] (e2) to [out=-90,in=-30]node[right=2mm]{\color{red}$p^{\phi} (0)$} (e1);
\draw [->] (e1) to [out=0,in=240]node[right=2mm]{\color{red}$p^{\phi} (1)$} (e2);
\draw [->] (e2) to [out=190,in=-30]node[below]{\color{red}$p^{\phi} (2)$} (e3);
\end{tikzpicture}
\end{document}
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