In any product or system development phase, testing and measurement of critical components is considered a crucial part. Since few decades, test and measurement space has seen significant amount of consolidation. The demand for test and measurement equipment from various sectors is rising exponentially. For instance, in the automotive industry, this equipment is used to address trends related to connected cars and autonomous driving. Moreover, as the data centers have moved to higher transmission speeds and new standards, the demand for electronic test equipment, especially high-speed digital test equipment have increased significantly. Furthermore, extensive ongoing research on 5G technologies is fueling the growth of test and measurement equipment market and is expected to continue growing at the same rate over the forecast period. Thus, due to intense competition and growing demand, there is intense pressure on manufacturers to meet the demands of complicated and advanced test design process.
ROHDE&SCHWARZ, Anritsu, VIAVI Solutions Inc, National Instruments and Teledyne Technologies Incorporated are among the major players holding a prominent position in the global market. These players are focusing on expanding and enhancing their product offerings to remain competitive and expand their customer base. Furthermore, these players are focusing on partnerships and collaborations to expand their business to strengthen their market position.
ROHDE&SCHWARZ designs, manufactures, and market products related to information and communication technology and security technology. The company delivers precise and reliable test and measurement equipment to aerospace & defense, automotive as well as to mobile network testing, spectrum management & monitoring, and wireless communications markets. The company aims at developing new products by investing in research and development in order to enhance its product portfolio and widen its offerings. It also engages in partnerships and collaborations for global expansion and improving its market position.
Anritsu is also one of the prominent players in the global test and equipment market. The company develops, manufactures, and sells measuring instruments and systems for a variety of communications applications. The company’s focus is to build business structure, make investments in various businesses to raise productivity, and optimize business processes. Moreover, the company also focuses on cost competitiveness to maintain its global position.
VIAVI Solutions Inc specializes in providing network testing, monitoring, and assurance solutions to communications service providers and enterprises. The company provides a wide range of test and measurement products, solutions, and services. Moreover, the company focuses on acquisitions and mergers to expand the customer base by innovating customer-based solutions; this helps the company strengthen its global presence.
National Instruments under its electronic test and instrumentation category offers oscilloscopes, digital instruments, frequency counters, switches, power supply and loads, digital multimeters, and waveform generators among others. The company aims at increasing its global presence by serving various markets via a robust marketing and distribution network. Strategic partnerships with other corporations and product launches are the key strategies implemented by the company to maintain its market position.
Teledyne Technologies has introduced test and measurement modules based on its leading mixed signal integrated circuit (IC) technology. For the global test and measurement market, the company and its consolidated business units design and deliver advanced microwave technologies and services in the area of amplifiers, circuit board & packaging, components, integrated assemblies & custom solutions, traveling wave tubes (TWTs). It has entered into several partnerships and acquisitions to broaden its market reach and therefore, expand its customer base.
Fortive is a diversified technology company. Fortive sells test & measurement products through its subsidiary Tektronix. Tektronix provides innovations in automotive testing, Internet of Things (IoT), data centers, power applications which are growth engines of electronic test & measurement equipment market. The company provides oscilloscopes, signal, spectrum, and modulation analyzers, video test and monitoring equipment, Keithley Instruments & Products, Keithley Semiconductor Test Systems. Another subsidiary of Fortive was Danaher which has completed the spin-off of its test and measurement group to Fortive.
Fluke Corporation (Fluke) designs and distributes electronic test and measurement instrument and systems. Fluke is a subsidiary of Fortive Corporation. It provides digital voltmeters, electronic counters, digital thermometers, data loggers, PC-based data acquisition systems and software for the scientific, educational, government, and industrial markets. Raytek, Ircon, and Datapaq are Fluke Process Instruments which are providing new advancements in test & measurement market that benefit to customer.
Keysight Technologies, Inc. provides electronic test and design solutions to communication and electronic industries. The company’s strategy is to provide customers high-speed, high-accuracy probe, and optical scanning inspection measurement tools and help them in reducing the cost of test which will directly have a good impact on company’s revenue.
Spectris engages in the manufacturing, development, and supply of measuring instruments and controls. The test & measurement segment offers test, measurement and analysis equipment, software, and services for product design optimization, microseismic monitoring, manufacturing control, and environmental noise monitoring. The company’s main strategy is to focus on high-growth markets in which significant trends are on demand. The other strategy is to keep simplified portfolio so that customers can easily match their requirements with the company’s products.
Although these players hold strong position in the global test and equipment market, other players including Spectris, IKM Instrutek AS and EXFO Inc. also have a considerable presence in the global test and equipment market. These players focus on collaborating with other businesses with strong market presence to expand their market reach, thus diversifying their product portfolio.
Michael Porter’s five forces model gives a framework that models the global test and measurement equipment market, which is influenced by five forces. The strategic business managers, trying to create an edge over competitive firms in the global test and measurement equipment market can utilize this model to better comprehend the industry connection in which their firm operates. The components of each of the forces and the degree of impact of each component in the context of the global test and measurement equipment market have been broken down and analyzed
Threat of New Entrants
The global test and measurement equipment market witnesses the presence of several established players from Asia, Europe and the US. The initial cost required for establishing manufacturing facilities in the test and measurement equipment market is moderate. Furthermore, the cost of integrating/manufacturing the components with raw materials is less since this fall under the discrete manufacturing process. Moreover, favorable government regulations further lower the barriers of entry for the new players. Therefore, new entrants are expected to pose a moderate threat to the existing players due to less potential in the African and South American region.
Bargaining Power of Suppliers
There are various global and local players present in the test and measurement equipment market, which includes Bosch Rexroth, National Instruments, and Infineon Technologies AG. The raw materials required to produce electronic components have low differentiation as they are generally supplied by a fixed number of material suppliers globally. Due to the presence of a large number of raw material suppliers outside Europe and South America, the manufacturers procure the material from outside the region, as a result, the bargaining power of suppliers becomes high. Furthermore, the cost of switching suppliers for the manufacturers is high due to limited number of regional and local suppliers. Thus, the suppliers of the test and measurement equipment are expected to have high bargaining power during the forecast period.
Threat of Substitutes
Currently, the test and measurement equipment are being highly utilized across various industries such as aerospace, aviation, telecommunication, and electronics. The wide scope of these equipment for various applications is likely to fuel their adoption in the forecast period. Moreover, close replacements for the testing equipment are not available in the market at present. Furthermore, the end users of test and measurement equipment mostly rely on traditional systems. Therefore the threat of the substitutes is likely to be low in the upcoming years.
Bargaining Power of Buyers
The buyers in the test and measurement equipment market comprise distributors and end-user industries such as aerospace, aviation, telecommunication, electronics, and semiconductor. Since most of the suppliers are established outside Europe, the local and regional distributors hold low power over the prices. Furthermore, the developing countries do not have highly mature end-use industries, and the technical expertise of the manufacturers is less. This further increases the cost of switching from one supplier to another. Since the manufacturers rely mostly on global players, the brand loyalty is moderate. Therefore, the bargaining power of the buyers is expected to be low during the forecast period.
Intensity of Rivalry
The players in the global test and measurement equipment market are expected to witness a moderate degree of rivalry during the forecast period. This is because the products provided by the suppliers offer moderate differentiation, which results in high brand loyalty among the buyers. Moreover, the limited presence of local players in the market makes the rivalry moderate.
