Participants Compete on Prices in an Aggressive Weighing Equipment Market, Says Frost & Sullivan

SAN JOSE, Calif., June 3 -- Price has become the differentiating factor in a mature and intensely competitive weighing equipment market where there are no apparent differences in product designs.

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Manufacturers focus on cost-reducing activities, passing over the need to develop new products and technologies.

New analysis from Frost & Sullivan (http://www.frost.com/ ), U.S. Weighing Equipment Markets, reveals that this industry generated revenues totaling $589.3 million in 2002. Total market revenues are expected to reach $663.4 million in 2009.

With most end-user markets being saturated, manufacturers are looking at new areas such as pharmaceuticals and food and beverages in order to increase revenues. Replacement demand, has also somewhat eased the lack of demand created by the economic downturn.

"Manufacturers have to introduce products that are more accurate, reliable, and durable than the older machines," says Frost & Sullivan Research Analyst Alok Tiku.

Several mergers and acquisitions that have sustained the profitability of this business have cushioned unfavorable outcomes of commodification and low growth. Consolidations have helped increase market shares and enlarge product portfolios.

"Apart from gaining access to unexplored markets and extending distribution channels to improve end-user segmentations, alliances between large companies have obstructed competition from smaller enterprises," says Tiku. "Nevertheless, these minor businesses can survive by focusing on their core competencies and catering to niche markets."

The spate of collaborations has improved the overall vitality of the consolidated organization in an expended market. Participants are also providing services other than the initial sale and installation of equipment to retain customers.

"The challenge for the manufacturers lies in providing services for end users and still acquire profits," says Tiku. "Companies have to think up new marketing strategies and enhance support for their equipment in a marketplace that sells identical products."

With greater standardization of technology, pressures on margins may increase since every manufacturer would be focusing on enhancing services.

"By providing increased warranty of sales, personnel-intensive training, and rapid repair services, manufacturers can hope for future success," adds Tiku.

Frost & Sullivan is a global leader in strategic growth consulting. This ongoing growth opportunity analysis is part of the Machinery Monitor Service, which also includes market insights on Robotic Automation: Industry Impact Research Service and European Packaging Machinery Markets. Frost & Sullivan also offers custom growth consulting to a variety of national and international companies. Interviews are available to the press.

                     U.S. Weighing Equipment Markets
                                   A403

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   Danielle White
   Media Relations Executive
   P: 210.247.2403
   F: 210.348.1003
   E: dwhite@frost.com
   www.frost.com

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