Threat of new entrants
The application of investment casting is high among the end-use industries due to its excellent properties such as durability and precision, which are important in the manufacturing of complicated parts including fittings, bearings, and others. The growth of the end-use industries such as aerospace, automotive, and general industries is projected to fuel the growth of the global market in the coming years. The global investment casting market is expected to witness healthy growth during the review period. However, the high initial and labor costs increase the final price of the investment casted products, which may hinder the entry of new players.
The global market comprises a large number of participants, where the tier-1 players hold a share of over 30%, which is expected to act as a barrier in the entry of new players. Similarly, the increase in the price of raw materials in the recent past, requirement of high capital to establish a production unit, and government regulations associated with the production of investment casted products are also expected to hamper the entry of new players.
New entrants bring in new capacity, willingness to gain market share and often substantial resources. Taking all the past and present global market trends, forces, and scenarios into consideration, the threat of new entrants to the existing players is expected to be low to moderate.
Segment rivalry
The global investment casting market is likely to witness moderate to high intensity of rivalry as it is fragmented with a large presence of tier-1 and tier-2 players, where the tier-1 players hold the major share. Furthermore, high differential pricing of investment casted products for various application increases the rivalry. Besides, the presence of alternative process is expected to intensify the rivalry.
Threat of substitutes
The threat of substitutes in the global market is high in the current scenario, as there is a number of potential substitutes available for metal casting in the global market. The limitation of investment casting in the manufacturing of large components and high-volume parts has increased the adoption of alternatives such sand casting and 3D printing technology. Sand casting is majorly used as a substitute of investment casting in the manufacturing of automobile and industrial parts, as it is comparatively economical and requires less time.
However, the high cost associated with the production process serves as a con for the latter metals. Thus, over time with the ongoing research and development, alternatives for investment casting process are expected to emerge, which will further increase the threat of substitutes.
Bargaining power of suppliers
The bargaining power of suppliers of investment casted products is estimated to be moderate as there are many suppliers with a wide distribution network in the global market. The products find a wide range of applications in the aerospace, automotive, and manufacturing industries. The production cost of investment casted products varies according to its application and variation in raw materials such as aluminum, iron, and bronze. The investment casting process is expensive as compared to other metal casting process such as sand-casting, which impact the selling price of the finished product. Similarly, the time-based switching cost is expected to hamper the bargaining power of suppliers. However, the high demand for the product is expected to increase the bargaining power of suppliers during the forecast period.
Bargaining power of buyers
The bargaining power of buyers is estimated to be high. This is due to the large concentration of buyers of investment casted products, particularly from the aerospace, industrial, and automotive industries. Besides, the high switching cost increases the bargaining power of buyers, due to a large number of suppliers. Additionally, the availability of the product in the market by various suppliers in several forms, shapes, and sizes, is also projected to boost the bargaining power of buyers. However, long-term contracts with suppliers are expected to hinder the switching process, as the buyers are required to deal with the same suppliers and agree to their terms and conditions.
