The freeze-drying equipment market is profitable, both for existing players as well as new entrants. A substantial level of rivalry is observed among the existing manufacturers in the market. Our analysis revealed that market players have adopted different strategies and innovative research and development techniques to expand their business and secure their position in the global freeze-drying equipment market. In recent years, strategic movements by major players included product launches, approvals, and expansions, which have been used as market penetration strategies and a means to reduce competition.
The growth of market vendors is dependent on market conditions, government support, and industry development. Thus, vendors should focus on geographical expansion and product improvement. It has also been predicted that improvement of the global economic scenario, combined with efforts to enhance infrastructure, can fuel market growth, making it an ideal time to launch new products and increase the market presence.
Vendors with better technical and financial resources could develop innovative products. Therefore, vendors must develop new technologies to stay abreast of emerging techniques that could affect the continuing competitiveness of their product lines in the market.
Tofflon is a long-standing player in the global freeze-drying equipment market. The company holds a significant position as it constitutes a strong distribution network and aims to capture maximum space in the market in the coming years. Tofflon has a product line constituting laboratory freeze dryer, production freeze dryers, pilot freeze dryers, and freeze dryers for mass production, having applications in several industries including pharmaceutical, food processing, biotechnology, and others.
Industria Macchine Automatiche S.P.A. has robust industry experience. High customer satisfaction level, exceptional performance in new markets, and a strong product portfolio add to the company’s competitive advantage. The company also has a strong clientele and is well established in the industry. Also, it is continuously involved in seminars, conferences, and trade fairs in several countries to generate awareness about its products.
Azbil Telstar, S.L.U. is a prominent player with a widespread distribution channel throughout the world. The company employs a strategy of maintaining the quality of the products, which helps the company in maintaining its market position. Also, the company is focused on increasing its market share by continuous product launches in the freeze-drying equipment market.
SP Scientific is one of the prominent players focused on sustaining its footprint in the freeze-drying equipment market by following expansion and product launch strategies. In January 2019, the company launched LyoConstellation S10, S20, and S30, a series of advanced freeze dryers. The company is focused on product extensions and the introduction of newer models to expand its target audience in this industry.
Other players operating in the freeze-drying equipment market are SP Scientific, GEA Group Aktiengesellschaft, Hosokawa Micron B.V., OPTIMA Packaging Group GmbH, and several other freeze-drying equipment manufacturers.
Threat of New Entrants
The threat of new entrants is moderate in the global freeze-drying equipment market. Any equipment manufacturing company trying to enter the market is required to accept or abide by the mandatory regulatory standards. However, the budget required for research and development of a product is low as compared to other industrial equipment. Freeze-drying equipment is specialized and manufactured for use in various pharmaceutical manufacturing and food processing, and R&D activities. Moreover, the majority of the customers are using products of trusted sellers. The customers are likely to prefer established brands over new market players due to quality concerns and to maintain the quality of the final product, which does not comfort the new entrants to enter the market easily.
Bargaining Power of Suppliers
The suppliers in the global freeze-drying equipment market are finished goods manufacturers and suppliers. There are various suppliers present in the global freeze-drying equipment market. The switching cost of these suppliers is moderate due to the high competition, and also the customers are slightly inclined towards branded products. The suppliers are likely to enter into long term partnerships with research institutes and pharmaceutical manufacturers. However, low-quality products are likely to damage the quality of the final product, and it can cause adverse effects on the ongoing research process. Hence, customers are selective about suppliers. Due to this, the overall bargaining power of suppliers in the global freeze-drying equipment market is low.
Threat of Substitutes
The threat of substitutes in the global freeze-drying equipment market is low. Freeze-drying equipment is used in the development and manufacturing of pharmaceutical products. Freeze-drying technique is an advanced version of conventional drying methods such as microwave vacuum drying, tray drying, vacuum drying, fluidized bed drying, and rotary drying which are used for a long period. The majority of the customer base is comfortable with conventional drying equipment. Also, freeze dryers require specific gases such as HFC cooling gases and are not considered ecofriendly. Conventional drying methods are easy to carry out, cost-effective, and suitable for large scale manufacturing, hence, favored by customers which increases the threat of substitutes. However, the increasing research and development activities and demand for specific and efficient freeze dryers which is likely to decrease the threat of substitutes to the freeze-drying equipment. Also, the high degree of product differentiation decreases the threat of substitutes.
Bargaining Power of Buyers
The bargaining power of buyers is moderate in the global freeze-drying equipment market. The number of buyers is more as compared to the number of freeze-drying equipment manufacturing companies. However, the freeze-drying equipment is specialized and plays an important role in pharmaceutical product manufacturing, and the buyers of the freeze-drying equipment are moderately inclined towards quality products manufactured by trusted companies. The products are manufactured for food processing and pharmaceutical manufacturing, there are various substitutes available in the market in front of buyers. Also, most of the buyers are pharmaceutical companies, food processing companies, and research organizations; they are likely to enter into the long-term agreements with the freeze-drying equipment manufacturers for uninterrupted service. Moreover, they can exert pressure on the manufacturers due to the low switching cost and intense rivalry in the market, which is responsible for the increased bargaining power of buyers.
Intensity of Rivalry
The rivalry in the global freeze-drying equipment market is moderate to high. The availability of substitutes and a large number of customers increases the intensity of rivalry in the market. The market is growing with a prominent growth rate and likely to provide opportunities for major players to expand their geographical boundaries which will initiate tough competition between major players to capture maximum market share in the emerging markets. Major players are trying to develop products under their own as a part of vertical integration. Players are engaged in developing a process to lower their manufacturing and logistics costs to increase profitability and to overcome the competition. Moreover, they are also developing advanced products for differentiating their brand from their competitors.
