The threat of substitutes

Connection terminal is the main substitute of connection equipment. For the high-end market, the connector is almost not threatened by the alternative products. The connector itself is developed from the terminal, and the purpose is to plug and unplug conveniently and quickly without error. In the middle and low-end market, connectors are more vulnerable to the threat of substitutes. When buyers bear the cost pressure, they will choose connectors with low quality and low price.

The bargaining power of the buyer.

The buyers of connectors are the manufacturers of products and equipment, and the buyers are concentrated: the products purchased by the buyers from the industry account for about 10% of the total cost; the standardization degree of the buyers from the industry is increasing; the profitability of the buyers is declining; the buyers have the ability to carry out backward integration; the information of both sides is more transparent; therefore, the belt pin pin all these make the connector more competitive The bargaining power of buyers is getting stronger and stronger.

Ability to negotiate with suppliers.

There are suppliers of raw materials, such as aluminum, silver, gold, etc. The results show that the seller industry is more centralized and standardized; the transaction volume of the buyer is very large; the degree of product differentiation is very small; the cost of changing production to the seller is relatively small; the possibility of forward integration is relatively small; the information of both sides is quite transparent; generally speaking, the bargaining power of the seller is weak, and the existing enterprises can still maintain considerable profit space.

The threat of newcomers

Product differentiation advantage and scale economy are barriers to entry, but there are no special requirements for sales channel, capital demand, switching cost, cost advantage, etc. However, the vitality of pin and bus connector market and the high growth potential of communication industry in railway, energy, machinery and other industries are attracting more and more new users.