Analysis of the Engineering Industry

Analysis of the plan exertionExecutive summeryIn the assignment be commencement, the applied science pains is critic on the wholey analyzed by studying its characteristics, identifying and analyzing its key atomic number 18as and its current position and how it is modify by micro and macro environmental elements. All these analysis is through by use analytical tools manage Porters Five Forces framework, PESTEL analysis, Industry manner-Cycle analysis, device drivers of heighten within the persistence, etc.The mechanical assiduity after c befully analyzed, beta future long scenarios have been made demonstrating on how the pains forget act and perform in innovative long margin slope based on the present analysis and trends in that set outicular industry. as well, wizard nearly equally situation has been identified, with relevant reasons, which the industry will intimately likely to face in the future.The entire assignment is based on the engineer industry in Indian commercializes being considered as the animation to conduct appropriate researches.Introduction to the industryThe industry is one of the biggest and most refined in India and besides in the world which provides the latest engine room not only to the fast growing multinational companies but also to the global market. Some of the worlds biggest engineer science science companies largely depend on the self-propelling industry of India. It is a diverse industry with a number of segments, and quite a little be broadly categorized into two segments as fol low-toneds(1) Heavy applied science(2) Light engineeringThe engineering sector is relatively less staccato at the top, as the competencies required are risque, while it is highly fragment at the everyplacethrow end (e.g. un scoreed transformers for the retail segment) and is dominated by undersizeder players.The engineering industry in India diligences a wide flap of harvest-feasts, with heavy engineering good s accounting for bulk of the payoff. Most of the leading players are engaged in the production of heavy engineering goods and mainly produces high-value products using high-end technology. Requirement of high level of capital investment poses as a major entry barrier. Consequently, the small and unorganised firms have a small market presence.The light engineering goods segment, on the otherwise hand, uses medium to low-end technology. approach barrier is low on account of the comparatively lower requirement of capital and technology. This segment is characterized by the dominance of small and unorganized players which manufacture low-value added products.Classification of the engineering Sector in Indiahttp//www.dnb.co.in/ applied science/images/Classification.gifSource http//www.dnb.co.in/Engineering/overview.aspPortors five forces framework pursuit are the external environment of engineering industry by analyzing the Porters 5 forceshttp//2.bp.blogspot.com/_H2CekjGxczE/S05y_FX RRhI/AAAAAAAAAHM/RZqdnnXkpHM/s400/porter.jpgSourcehttphttps://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNfSZbAv9E66v5hR-Q8kByAYJt8PmLSUIZBr98DG5rVJ6BX-f5SBShrHi7ydWL3oQYUylK0UuGpaQAgYnAkutsKYVehyjUMZahV3phmoYHdi0xnjpsg7Uf1OJL_MoMmLpTi-wDBhf5zcMn/s400/porter.jpgThe five forces are as follows1 The terror of impudently entrantsThe threat of new entrants for engineering industry in India it is a very low threat Factors to examine for this threat of new entrant in India is include all barriers to entry into this market such as upfront capital requirements, brand equity (a new firm may have none), legislation and government policies, (safety) ability to dispel the product .2 The bargaining source of buyers/customersCustomers consider both conception and price the engineering companies are attempting to produce engineering products that compete in various price segments. In India bargaining power is lower which is creating a more(prenominal) favorable situation for the engineering industry but not the buyers. The quantity a buyer bribes is usually a good factor in determining this force, even in the eng ineeringwhen buyers only usually purchase one at a time, they still possess considerable power (Car freaks, 2008-10). However, this may be different in other markets.3. The threat of commuteIn Singapore the threat of substitute is high because of the numerous other forms of tran blowation substitutes are available, but none of them offer the utility, convenience, independence, and value afforded by feature cars. Substitutes such as rental cars, Sport bike industry, renting Sport car clubs like Luxe sport club in Singapore Millionaire asia singapore, 2010). (For details please refer Appendix no 4)4 The bargaining power of supplierThe bargaining power of supplier is low in Singapore because of the availability of substitutes and the amount of competition in the sport car industry. Suppliers dont have a great deal of influence in the terms of supplying the sport cars parts. The sport car industry which refers to all the suppliers for the parts, such as tires, components, electronic s, and even the assembly line workers. Some suppliers are small firms who rely on the carmakers, and may only have one carmaker as a client. So this force can be tricky to evaluate in the sport car industry in Singapore market (For details please refer to appendix no 5).5. The warring rivalry within an industryIn Singapore sport car industry competition between existing automobile companies is high because sport car carmakers are engaged in fierce competition. Prices, ad campaigns, and product developments keep them on the edge of innovation and profitability. Margins are low and pressure between rivals is high. This may cause the sport industry earning lower profits when the hail of the competition is high (Car freaks, 2008-10).PESTEL ANALYSISSourcehttp//www.business.gov.sg/NR/rdonlyres/06030A45-6CCF-45BC-8F2C-F2833D5D44B4/6514/entrepreneurguide.pdffountainhead use the PESTEL to analyze the macro-environmental changes and influences on the engineering industryPolitical legal age of the companies like, etc. have their manufacturing plants in India because of cheap labour and low cost of production. But these countries are usually politically unstable and can score hindrance for the companies.EconomicEconomic slowdown such as the late recession can have negative partake on production and sales of the engineering companies. excessively other sparing factors like the economic policies of European Union member countries make it tougher for the industry participants to penetrate the engineering market.Socio-culturalThe social and cultural restraints and obligations directly affect the buying pattern of people, the brand loyalty, female share of the market, etc. also the companies now-a-days thrive to keep up with corporate social responsibility to maintain their Public relegation status. scientificThe technology keeps ever-changing and varying from place to place. Techonology plays a vital part in the engineering industry. The engineering manufacturing compa nies have to keep abreast with the changing technology so as not to give a free-enterprise(a) edge to competitors by speeding up their change of products and functioning ability.environmentalMany industry participants have become aware of environmental hazards and are putting in efforts to do their bit for environment and the society with activities likeLegalCompanies in the engineering industry in India face some legal matters usually pertaining to labour wages, working conditions, etc. or that of deoxidise manufacturing and copying of products or ones related to trade agreement.Structural drivers of change for Engineering industryI have identified some of the drivers of changes that have impact on the engineering industry.The following are the structural drivers which bring nigh changes in the industryTechnologyTechnology is the most vital driver of change in engineering industry. Introduction of internet has sky-rocketed the sales for the companies. Also it helps the RD depa rtments to come out with new engineering products quickly and efficiently.Industry driverlamborghini_headquarters_italySourcehttp//www.egmcartech.com/wpcontent/uploads/2008/05/lamborghini_headquarters_italy.jpgRelated and supporting industries are extremely important because engineering product manufacturers live and die by creative and innovative number engineering (Automotive industry, 2010). India offers support to other industries such as, steel, rubber, petroleum, oil gas, transportation industries. Indias infrastructural facilities helps to frame-up a engineering industry in form of power supply, machinery, capital, rude materials and labour which will raise foreign direct investments have conduct to the rapid growth in terms of engineering goods production and exports (European foundation, 2004).Mergers and Take-overs-t=1usg=__vO8BPfXSsu76pCVOchvBejU2hUg=Source http//www.vr-fullerton.com/images/223069.jpgOne of the most significant drivers of growth in the engineering in dustry is the trend of mergers and acquisitions. Such buyouts and mergers enable manufactures to build up their technology and service scale up to the mark, the two factors essential to gain competitive edge. Outsourcing of design and engineering functions, leading to growth in companies offers high value-added Services.Life cycle model for the industryCUsersVishikadDesktoplife cycle.bmpSource Adopted from (Johnson et al., 2008)The Engineering industry as per the life cycle model shown above is presently at the Shakeout stage for the following reasonsThe buyers are becoming more discriminating of their purchases due to brand loyalty and performance according to their own preferences taste.Also as far as the competitive conditions are concerned, the major engineering products manufactures have started innovations and sales promotion activities to attract more and more buyers towards companys product range.The engineering companies also attempt to shakeout their industry rivals by acquisition or merger processes with other engineering manufactures. This way they can have their monopoly over the engineering markets as well as minimising the competition within the engineering sector.Scenarios for Long term future of the industryThe following scenarios based on the research on Indias engineering industry that indicates the possible long term future of the industry(1) Scenario Increase in sales, product diversification sophisticated RDThe attitude of selling the products into engineering market is changing day by day. Engineering companies trying to relate with the customer directly. This will do by opening up showroom or signing contracts with large MNCS like Also the engineering product makers will focus on ripe(p) RD whereby, they not only focus onperticular group of buyers. Also the companies are diversifying their products more too international engineering product manufactures.This scenario will benefit the industry in the following mannerIt will help engineering companies to connect with their buyers and thus understand their likes, dislikes and expectations, preferences about companies offering.The companies can get direct feedback on their products so that they can improve on overall performance of the company..Most possible ScenarioThe most likely scenario applicable in the future is the 3rd scenario. Following are the reasons supporting my conclusionThe companies can alter their engineering products, design as per the customer reaction to their previous products. This can be done by feedbacks and data collected which wont be lost or manipulated as itll directly go to the company.The companies are already starting to do intense and advanced RD to introduce new technological aspects The customers are forever keen on trying out new exciting products and the disaster of such products is very rare.Also the Engineering industry is growing at a rapid pace. All other industries are now trying to sell their products at retail pri ces which is the same the Engineering industry is exit to do in the future.ConclusionIn India the future of engineering industry seems encouraging. In terms of the expected surge in global bring and rise in foreign investments. Several trends such as highly-developed markets, globalization, technology advances, regulation and environmental consideration, and market fragmentation and product diversification will result in the rapid growth of this Engineering industry in India.