What are the market threats facing board-to-board connectors?
Board-to-board connectors and headers and headers are common electronic components with a wide range of applications. Board-to-board connectors mainly face the following threats:
1. Threat of new entrants
Barriers to entry mainly exist in the difference advantages of board-to-board connectors and economies of scale, while there are no special requirements in terms of sales channels, capital requirements, switching costs, and cost advantages. However, the high growth potential of connectors in communications, railways, energy, industry, etc. is attracting more and more new entrants.
2. The threat of substitutes
The main alternative to connectors is terminal blocks. In the connector market, board-to-board connectors are not threatened by alternatives, because connectors are developed from terminal blocks for convenient, fast, error-free plugging and unplugging of cables. In the low-end market, connectors are more threatened by substitutes. When buyers are under cost pressure, they will choose terminals of average quality and cheap.
3. The threat of buyers
The buyer of the connector is a product and equipment supplier, and the concentration of the buyer is high: the product purchased by the buyer from the industry accounts for about 10% of its total cost; the standardization degree of the buyer from the industry is increasing: the profitability of the buyer There is a decreasing trend; the buyer has the ability to carry out backward integration; the information of both parties is more transparent; so all this makes the buyer's bargaining power higher and higher.
4. Threats from suppliers
Connector suppliers are suppliers of aluminum, copper, silver, gold, etc.; suppliers of raw materials such as engineering plastics. The concentration and standardization of the seller's industry are high; the transaction volume of buying houses is very large; the degree of product differentiation is very small; the cost of switching sellers is relatively small; the possibility of forward integration is not large; the information of both parties is quite transparent; in general In other words, the bargaining power of the seller is relatively low, and existing companies can still maintain considerable profit margins between the buyer and the seller.