The global laminated veneer lumber (LVL) market is characterized by a moderate number of players that operate at global and regional levels. The players adopt strategies such as mergers & acquisitions, product development, and expansion to improve their position in the global market. High competition, rapid changes in technology, and availability of integrated solutions by industry participants are the key factors that restrict the market growth. Vendors compete in terms of cost, product quality, and reliability. It is vital for these players to offer cost-effective and superior products and services to succeed in the competitive market environment.
The growth of market vendors depends on market conditions, government support, and industry development. Thus, they should focus on improving their products and expanding their market presence. Weyerhaeuser (US), Metsa Group (Metsa Woods) (Finland), Louisana Pacific Corporation (US), Boise Cascade (US) held nearly 38.70% of the market share in 2018.
Modern Lumber Technology (Russia), Nelson Pine Industries Limited (New Zealand), Murphy Company (US), Brisco Manufacturing Ltd. (US)are some of the other key players operating in the laminated veneer lumber (LVL) market.
The leading players, as mentioned above, are dominating the market due to their enhanced product portfolios, vast industry experience, and wide geographic reach. These players may strengthen their presence in the market through expansion and acquisitions during the forecast period. Players with access to better technologies can develop unique and innovative products, which could render the competitor’s offerings, obsolete. The competitive environment in the market is likely to intensify further due to the increasing number of expansions.
Michael Porter’s Five Forces model is a framework to study the global laminated veneer lumber market. Strategic business managers, trying to gain an edge over competitive firms in the global laminated veneer lumber market, can utilize this model to better comprehend the industry, in which the company operates. The components of each of the forces and the degree of impact of each force in the context of the global laminated veneer lumber market have been broken down and analyzed. Threat of New Entrants
The threat of new entrants denotes the impact of new players trying to enter the market. The laminated veneer lumber manufacturers, trying to enter the market, require moderate capital to set up manufacturing facilities and procure raw materials and the technological complexity involved in manufacturing laminated veneer lumber is low. However, there is a presence of established players in the market, which makes the entry of new players difficult. Thus, the threat of new entrants in the laminated veneer lumber market is expected to be moderate during the forecast period. Bargaining Power of Suppliers
The bargaining power of suppliers refers to the degree of influence that input providers exert over the market dynamics. The concentration of suppliers in the laminated veneer lumber market is high, which decreases their bargaining power. Since most laminated veneer lumber manufacturers tend to enter into long-term agreements with suppliers in order to ensure uninterrupted supply of raw materials, the supplier switching cost is high, which raises the bargaining power of suppliers. Therefore, the bargaining power of suppliers in the laminated veneer lumber market is expected to be moderate during the forecast period. Bargaining Power of Buyers
The buyers of laminated veneer lumber use them in headers, beams, rim board, edge-forming material, and other application areas. Since there are various application areas of laminated veneer lumber, the concentration of buyers is high, which lowers their bargaining power. The switching cost incurred by these buyers is moderate due to the unorganized nature of the market. The impact of brand recognition on the market is low due to the easy availability of products and the low product differentiation. Hence, the bargaining power of buyers in the laminated veneer lumber market is expected to be moderate during the forecast period. Threat of Substitutes
The threat of substitutes refers to the effect of substitute products on the laminated veneer lumber market. There are various products such as glulam and cross timber laminates (CTL), which have various applications and could be used as substitutes for laminated veneer lumber. Despite the availability of substitutes, laminated veneer lumber is cost-effective and are widely used for various purposes. Thus, the threat of substitutes in the global laminated veneer lumber market is expected to be moderate during the forecast period. Rivalry
The laminated veneer lumber industry is witnessing moderate growth. The rising demand for laminated veneer lumber leads to a high competition among the existing players in the global market. Most of the companies in the market are focused on providing quality products at competitive prices. The competition between the market players has increased owing to the presence of several companies, who have managed to enter the industry, owing to the moderate entry barriers. The existing players are planning to expand their capacities and presence through acquisitions and other investments. Thus, the competition among the existing market players is expected to increase. Hence, the intensity of rivalry in the market is expected to be high during the forecast period.
