Engine (3519) and Turbine (3511) Industry Analysis
These two very close sub industries encompass producers of devices that that turn the energy of fuel into the mechanical energy of rotation. The engine group includes the production of diesel engines of different sizes that are used to power generators, vessels, military vehicles and tractors, as well as the production of parts. It does not include aircraft and non-diesel automotive engines. The turbine group includes the production of gas, steam and hydraulic turbines for generators, certain types of vehicles (tanks), and vessels. It also includes the production of turbine powered generators. The industry is very labor and capital intense as a result all the major players being large corporations; for instance, Westinghouse Electric, GE, Foster Wheeler, Cooper Cameron are among the turbine producers and Caterpillar and Navistar International are among the major engines producers. All firms on this field invest heavily in R&D work and facilities. The industry can be divided into several segments such as engines and turbines used for the mechanical drive of land vehicles and vessels, and for electrical power generation. Each group can be further segmented by production cycle and class (size) of product. For instance, the production cycle of large turbines for power plants differ greatly from the production cycle of small gas turbines for tanks.
Bargaining Power of Suppliers
Suppliers of the industry can be divided into two major categories: suppliers of raw materials and suppliers of production equipment. The power of suppliers of raw materials is insignificant as most of the raw materials such as steel, aluminum alloys, copper, and other products of metallurgy, are quite generic and can be purchased from multiple sources. The vertical integration of a particular firm in the industry makes a lot of difference. For instance, turbine props, rotors and diesel crankshafts are built from special...