Porter's Five Forces Model

Electrical Products
MADHUR BATHLA MBA (SECTION B) 20020476
 INDUSTRY ANALYSIS
• The electrical equipment market in India has been monitored by
Technavio, which operates in the electrical components and equipment
sector.

• Some of the major players in the electrical equipment market include ABB
Ltd., Bharat Heavy Electricals Ltd., CG Power and Industrial Solutions
Ltd., EMCO Ltd., Fuji Electric Co. Ltd., Larsen and Toubro Ltd.,
Schneider Electric SE, Siemens AG, TD Power Systems Pvt. Ltd., and
Toshiba Energy Systems & Solutions Corp.

• The electrical equipment market size in India is expected to grow by

USD 33.74 billion and record a CAGR of 9% during 2021-2025.

• Since the cables sector accounted for the greatest market share in the base
year, electrical equipment market vendors should concentrate on capturing
business possibilities from this segment.

• The market's expansion has been aided by a rise in the number of

residential and commercial construction projects. Threats from
cyberattacks in the power generating business, on the other hand, might
stifle market expansion.
Rivalry Amongst Existing Customers
• There are numerous competitors in the electrical industry,
for eg, in Cable & Wire products (fragmented, large no. of
domestic players) – Polycab, Finolex, CCI, Universal
Cables etc.

• Price pressure is exerted by a large number of competitors

in each product category.

• Competitors in the international market have established

brands & international certifications.

• To gain market share, each company employs a distinct

strategy; for example, one player innovates while another
diversifies, heightening the sector's competition.
Threat of Substitute Products or Services
• In the electrical and lighting sectors, there is a good deal
of threat of substitute products.

• New technology, increased R&D, energy efficiency, and

climate change all provide significant challenges to
industry players.

• In the lighting sector, LED bulbs may have a negative

impact on CFL/GLS lamp sales.

• In the electrical industry, state-of-the-art automation

goods (such as drivers, PLCs, and so on) are displacing
traditional electrical items such as contactors/relays,
switches, and so on.
Threat of New Entrants
• Due to the following causes, the sector has high entry
barriers, Technology, capital required and profit margins
being quite low, particularly in comparison to the
substantial margins earned by downstream channel
partners.

• The industry has an Oligopolistic market structure, i.e, few

players control the majority of the market.

• Existing market participants have a channel network in

place, which serves as an effective entrance barrier for new
entrants.

• Quality Standards: Almost every country has its own set of

technology standards, which are mostly based on
international standards. These criteria hinder not just new
entrants, but also international companies from obtaining
permits.
Bargaining Power of Buyers
• In general, the electrical industry has a very diversified
customer base, resulting in minimal buyer negotiating
power, however major chains have some bargaining
power in lighting.

• Buyers have a medium to high price sensitivity. Due to

the fact that buyers are typically price sensitive, this
results in an increase in buyer power.

• Feedback and recommendations may be found on the

internet. Buyer power has increased as a result of the
internet era, therefore, keeping customers more
informed.

• The cost of switching buyers is low, resulting in an

increase in buyer power.
Bargaining Power of Suppliers
• Since there are so many suppliers on the market,
suppliers hardly have bargaining power.

• Furthermore, there is no or very little switching cost,

hence, the supply power is limited.

• Impacts of inputs on cost: Since businesses in this

industry cannot dramatically distinguish on pricing in
order to remain competitive by altering inputs such as
input technology or other raw materials, this also leads
to a reduction in supplier power.

• Backward integration is becoming more common in the

industry, significantly lowering suppliers' bargaining
power.
Thank You