The industrial controller market is characterized by the presence of many global, regional, and local players. The market is competitive, with all the players competing to gain maximum market share. Government policies supporting the adoption of industrial automation and increasing demand for industrial automation in manufacturing industries are key factors that drive the market growth. High implementation cost restraints the growth of industrial controllers market however, growth in industrial robots and adoption of industry 4.0 across industries will create opportunity for the market’s growth.
According to Wantstats analysis, the growth of the industrial controller market is dependent on market conditions. The key vendors in the market are National Instruments Corporation, Ascon Tecnologic, Siemens Ag, Mitsubishi Electric, General Electric, Omron Corporation, Red Lion Controls (spectris plc), B&R Industrial Automation Gmbh (ABB Ltd), Schneider Electric, Abb Limited, Honeywell International Inc., Rockwell Automation, Emerson Electric Corporation, Yokogawa Electric Corporation, and Kawasaki Heavy Industries, Ltd.
These companies are focusing on enhancing their products with the integration of improved technologies. Moreover, these companies are prominent providers of industrial controller and compete in the industrial controller market to increase their geographic presence, expand their customer base, and form strategic partnerships.
The top 5 players in the industrial controller market are Siemens AG, ABB Ltd., Rockwell Automation, Schneider Electric, and Honeywell International.
Siemens is continuously expanding its product portfolio with significant investments in research and development. The company is focused on enhancing its service offerings and expanding its global presence through mergers & acquisitions to strengthen its expertise in technology. These strategic acquisitions also help Siemens to strengthen its presence in the competitive market. Currently, the company aims at expanding its business in China, however, it faces strict government rules and regulations.
ABB focuses on creating superior value for all the stakeholders. The purpose of ABB to operate in – The ABB Way- is the foundation to implement the strategy. It follows the purpose of holding a strong position in Electrification, Robotics, Motion, and Process Automation. It focuses on sustainability in everything, and the employees aim to enhance the performance of the market-leading and empower businesses to new levels. Together, the company comes with a strong brand, common values, and governance framework and aims to become a more focused, successful, and value-creating company.
Rockwell Automation primarily follows an organic growth strategy. The company is focusing on expanding its product portfolio to compete in the dynamic technology market and achieve a strong market presence. The company aims to achieve inorganic growth and is continuously acquiring companies, strengthening its technology differentiation, domain expertise, and market presence.
Schneider Electric is focused on organic growth by providing world-class services and software. The company plans to accelerate the growth of its profitable businesses by improving its systems and equipment. Digitization forms the core of its key strategy; it aims at supporting the digital transformation for its customers and strategic partners. The company is investing in R&D to modernize its existing facilities in key industries to maintain its market position.
The key strategy of Honeywell is aimed at organic growth. The company constantly focuses on innovations and R&D to ensure a strong market presence and product portfolio. It is also focused on tapping into new regional markets and segments. The company aims to expand its regional presence and customer base through collaborations and partnerships.
Threat of New Entrants
New entrants in the diversified industrial controllers market bring innovation and new ways of doing things and put pressure on the existing market players through their pricing strategies by reducing costs and providing new value propositions to customers. Companies providing industrial controllers need to manage all these challenges and build effective barriers to safeguard their competitive edge.
The economies of scale are difficult to achieve in the industrial controllers industry, making it easier for those producing in bulk to have a cost advantage. It also makes the production process costlier for new entrants. The industry's capital requirement is high, making it difficult for new entrants to set up their businesses. Capital expenditure is also high because of the high research & development costs. Thus, the threat of new entrants in the global industrial controllers market is expected to be moderate during the forecast period.
Bargaining Power of Suppliers
The suppliers for the industrial controllers market comprise Programmable Logic Controllers (Plc), Distributed Control Systems (Dcs), and Supervisory Control And Data Acquisition (Scada). The system integrators perform horizontal integration of these suppliers with the software /platform developers. This integration is subject to long-term agreement between suppliers and integrators, which increases the cost of switching from one supplier to another.
The products that these suppliers provide are standardized, less differentiated, and have low switching costs, allowing buyers to switch suppliers. The suppliers do not contend with other products in the industrial controllers market. This means that there are no substitutes for the final products and solutions other than the ones that the suppliers provide. The government policies regarding industrial controllers require strict licensing and legal requirements to be fulfilled before a company can start selling. The differentiation among the price of the component is moderate. Thus, the overall bargaining power of suppliers in the global industrial controllers market is expected to be high during the forecast period.
Threat of Substitutes
There are very few to no substitutes available for industrial controllers. There are very few substitutes available that are produced by low profit-earning industries. This means that there is a limit on the maximum profit that a firm can earn in the industrial controllers market. The few substitutes available are of high quality but are way more expensive. Comparatively, firms producing within the industry sell at a lower price than substitutes with adequate qualities. This means that buyers are less likely to switch to substitutes. There is low availability of close substitute in the market, also the buyer propensity to competitive product is low. Thus, the threat of substitutes is expected to have a low impact on the global industrial controllers market during the forecast period.
Bargaining Power of Buyers
The number of suppliers in the industry is more than the number of firms producing the products. This means that the buyers have a few firms to choose from and hence, do not have much control over prices, thereby making the bargaining power of buyers a weaker force in the industry. The product differentiation within the industrial controllers market is high, which means that the buyers are not able to find alternate firms producing a particular product. The buyers in the industrial controllers market are Automotive, Manufacturing, Oil & Gas, Energy & Utilities, Water And Wastewater, Food Processing & Beverage, Aerospace & Aviation, and Others. The cost of procuring at this stage is high, limiting the actual concentration of buyers across regions. Moreover, due to moderate brand identity, the bargaining power of buyers is moderate.
Intensity of Rivalry
The number of competitors operating in the industrial controllers market is low. Most of these are also large enterprises. Very few competitors have a large market share. This means that these players will engage in competitive actions to gain a better market position and become market leaders, making the rivalry among existing firms a stronger force within the industry. The industry is growing every year and is expected to continue to do this for a few years. Positive industry growth means that competitors are more likely to engage in competitive actions to gain a larger market share. This makes the competition among existing firms high within the industry.
The existing players in the industrial controllers market compete based on industry expertise, geographical presence, and product offerings. It has become challenging for new players to compete with the established key players and provide users with better and advanced services. Such factors are expected to create a high intensity of rivalry among the global industrial controllers market players during the forecast period.
