Abstract
As global trade expands and technological progress is being made in developing countries, manufacturers of boilers and heat exchangers in the United States (US) are facing increasing import competition while industry profitability is competed away from industry rivals, market entrants, as well as by the growing number of available choices for buyers, and by suppliers with larger clientele and differentiated products and services. The forces that influence profitability in this industry is an essential part of strategic planning for any boiler and heat exchanger manufacturer that aims to control competition risk and optimize profitability. This research aims to break down and analyze the influences that industry manufacturers, market entrants, purchasers, component and raw material suppliers, foreign imports, technological advances, government policies, industry organizations, and future trends have on the profitability of industry players. While it was found that the level of competition in the industry is moderate, rapid advances in technology, increasingly stringent government policies on emission standards and boiler and heat exchanger efficiencies, as well as growing import competition may catalyze industry competition in the near future. The use of Porter’s five forces in this analysis suggests the need to consider the significance of technology and the challenges posed by imports through increasing globalization, as these factors could substantially change and disrupt the industry by reducing barriers to entry and by raising the threat of substitutes. As a result, the boiler and heat exchanger manufacturing landscape in the US could become much more competitive, which in turn, could diminish returns for industry operators. This could also change the structure of the industry with the inception of industry players that offer differentiated products and services. The question for industry groups and policy-makers is to what extent should these five forces be influenced, since the degree of support for or of counteraction to these forces will guide the future competitiveness and marketization of the boiler and heat exchanger manufacturing industry in the US.
Highlights
As global trade expands and technological progress is being made in developing countries, manufacturers of boilers and heat exchangers in the US are facing increasing import competition while industry profitability is competed away from industry rivals, market entrants, as well as by the growing number of available choices for buyers, and by suppliers with larger clientele and differentiated products and services
With the expansion of global trade and the technological progress made in countries with lower labor costs, manufacturers of boilers and heat exchangers in the US are facing ever growing import competition while simultaneously facing competition from industry rivals and market entrants
This research has set out to analyze the competitive situation of the boiler and heat exchanger manufacturing industry in the US through the application of Porter’s Five Forces framework
Summary
With the expansion of global trade and the technological progress made in countries with lower labor costs, manufacturers of boilers and heat exchangers in the US are facing ever growing import competition while simultaneously facing competition from industry rivals and market entrants. By determining the industry's 'structure' and its attractiveness, the five forces can help set an agenda for action on various critical issues such as the specific strategy to deploy in order to mitigate excessive rivalry in the industry (Whittington et al 2020) This understanding allows for further analysis of individual manufacturers in terms of their particular valuechain advantage and strategically attractive competitive position. This research commences with a preamble on why Porter’s Five Forces framework was chosen as the method of conducting this research This is followed by an outline of Porter’s Five Forces and a further analysis of each one applied in the context of the boiler and heat exchanger manufacturing industry in the US. It will proceed with the impact of technology, government policies, and current economic trends on the industry
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