Five Force analysis of Crane manufacturing Company

Topics: Manufacturing, Industry, Chemical industry Pages: 5 (1181 words) Published: July 31, 2014
Name:- Rakesh Patil.
Roll No:- PGEMP43/A/29.

Apply the five forces analysis to a selected product market/division and assess the attractiveness of that industry. Compare the attractiveness of the industry five years back versus today.

I work for ElectroMech Material Handling Systems India Pvt Ltd which is one of the largest manufacturer of workshop duty Cranes in India. For the five force analysis I have selected Cranes used in the hazardous area termed as Explosion protected cranes.

These hoists and cranes are suitable for hazardous atmosphere for both Gas (Zone 1, Zone 2) and Dust (Zone 21, Zone 22) which are also certified according to ATEX. This association gives our customers an access to the global technology, local expertise and most efficient solutions and service. The highest-reliability products from STAHL Crane Systems which are proven worldwide are backed in India by the industry expertise, nationwide network and acclaimed service support of ElectroMech.

Market Definition:-
We largely pay our attention for selling these cranes to the Petro-Chemical refineries & Mining business, because this sector gives us the maximum revenues for this product. There are many different kind of cranes that are required in this type of industries such as Monorail hoists, Single girders Cranes, Double girder Cranes & Goliath Cranes depending upon the application for which it is required. Also most of the companies which buy this kind of product are a part of a Multi-million dollar group & the have a spread of industries in various geographical locations around the globe.

Bargaining Power of the Buyer:-
Bargaining power of the buyer is very high because of the fact that the groups that setup these petrochemical refineries can be counted on fingers & there are large No. of Crane manufacturing companies that willing to supply these cranes to these groups. Normally these cranes are used for the maintenance of equipments that are used in the petrochemical industry so within the industry a good word from the maintenance department plays a vital role & this word of mouth is passed on to their head offices where the commercial discussions take place. For the maintenance department Safety is first priority, so if your equipment is safe & easy to operate you have a good chance of getting the order. Second point is your equipment should me maintenance free & should not need any attention from the maintenance people. If a crane manufacturing company is in the good books of the maintenance department there is an better chance of getting the order.

Bargaining Power of the supplier:-
There are different kinds of suppliers to a crane manufacturing Industry. There are suppliers for motors, Gearboxes, Brakes, Electricals Panels. However the most important suppliers are the steel manufacturers. The biggest suppliers for steel come from China where labor & production cost is very low. For most of the steel suppliers Crane industry is not a primary market, they target markets such as Automobile, Ship building & infrastructure where the quantum is high. Hence the bargaining power of the steel supplier is high. Also for the gearbox suppliers the primary market is not crane industry they target markets such as steel plants, shipbuilding industry. Hence the bargaining power of the gearbox supplier is also high. Also the cable & the Variable frequency drive suppliers have a high bargaining power

Substitutes and Complements:-
There are not immediate substitutes to Cranes ,but in some of the cranes where the cranes it to be used once in a while may be when the crane is used only once or twice in a span of 2-3 years the substitute can be Mobile cranes which can be rented for doing the work. Many a times this is not possible in case of Petro-Chemical industry as the layout of the project is such that Mobile canes cannot reach the components to be handled and hence there is not option to an Electric...
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