3D Printing Porter s Five Forces Analys Essay
3D Printing Porter s Five Forces Analys
Existence of barriers to entry are low Few new firms can enter and non-performing firms can exit easily 3D printing will lower barriers to market entry and will enable innovative start-ups to target the market using crowd-funding.. Free R&D also dramatically lowers the barriers to entry. Capital requirements – Lower costs of technology equipment. First, AM reduces the capital required to achieve economies of scale. Second, it increases flexibility and reduces the capital required to achieve scope.. Government policy – Although 3D printing opens up new practical challenges, protection of 3D designs and objects under intellectual property, the policy questions about 3D printers are not well-defined. Access to distribution channels –easy access to software used for 3d printing. Direct interaction between local consumer/client and producer. 3D printing hubs are building up a 3d society channels. Industry revenue – According to Wohlers Report 2014, the worldwide 3D printing industry is now expected to grow from $3.07 billion in revenue in 2013 to $12.8 billion by 2018, and exceed $21 billion in worldwide revenue by 2020
Threat of substitute products or services
There are not many substitutes for 3D printing, if anything 3D printing is a substitute for physical models. However, 3D printing may have substitution products such as projectors or holograms in the future. Buyers may eventually look for a more temporary and relative price performance of substitute –may select cheaper alternatives such as regular printing or do it yourself modeling.
Bargaining power of customers (buyers)
Customers will gain tremendous power, as well B2B customers as B2C customers Buyer information availability – being able to manufacture by themselves or to source parts and products, even services, among new competitors. Force down price- Cost will be the driving force behind buyer bargaining power as existing channels and substitutes may be alternates to emerging 3D printing .Buyer concentration will be great as the opportunity to create or replicate inanimate 3D objects may be done relatively easily and inexpensively Demand for higher quality products Buyers in 3D printing marketplace may exert pressure on suppliers and vendors to supply higher quality at lower cost. Bargaining power of suppliers
Limited number of suppliers –In the case of 3D printing, early bargaining power of suppliers will be strong as there may be many buyers of the technology and a limited number of suppliers. Growing market for materials- Suppliers in marketplace may impact buyers through lower quality, higher cost, or limited availability of products . Considering that a great segment of people today want to own and use 3D printers, one is likely to profit by selling 3D supplies like new manufacturing techniques equipment, specific software and specific material vendors.
Intensity of competitive rivalry
As with any new technology, 3D printing will encounter competition among vendors and across all tiers of quality. As the product becomes easier to duplicate and manufacture and as equipment costs go down, the number of competitors will increase.. Main competitors – “3D systems” and “Stratasys”- 3DSystems and Stratasys, leaders of the 3D printing manufacturing market, have managed to counter the threat of competition by acquiring strategic companies early in their life cycle. The two leaders’ priority is to accelerate market share, marketing and R&D while accepting temporary earnings reductions, to strengthen their marketplace leadership and reduce current and potential competition.
They want to capitalize on the the first mover advantage. New competitors are entering the market The major technology players for traditional 2 dimensional printers have yet to engage heavily in the 3D printer market. It is feasible that the major technology players (HP, Canon, Xerox…etc.) will allow the market to mature and select the most superior technology, purchase that technology, and cultivate its growth through their existing distribution channels. The market has accelerated fast and is currently making huge progress, but 3D Printing has much more to offer and the nature of competition has the ability to change everything.