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THE GLOBAL NUCLEAR REACTOR INDUSTY
Industry overview
During the first ten years after its commercial introduction in 1956, the growth of nuclear power production was exponential, as would be expected for a new energy source. It then slowed down progressively to 10.9% a year by 1990, and has continued downwards to 1.8% a year in 2005 . It is however expected to rise again in the years to come , mainly because of the rise of the electricity demand worldwide (particularly in rapidly-developing countries), the awareness of the importance of energy security and the need to limit carbon emissions due to concern about global warming.
Degree of rivalry
In spite of a growing market, competition is fierce between the few nuclear reactor vendors and the industry is seeing an acceleration of international mergers and acquisitions as it is increasingly crossing national boundaries in a race to achieve critical mass in a high technology industry with high fixed costs and exit barriers. In 2006, three top level business alliances were created in the nuclear industry, combining the six companies which dominate the global market (Figure 1). Hence, the (CR)4 has recently increased to 0.6 .
In addition to that, nuclear power plants orders are long term contracts and customers are not likely to switch from one vendor to another. The combinations of these factors create a moderate level of rivalry even though the upcoming years will be critical to the major players who will have to demonstrate their capacity to their customers’ expectations in terms of cost competitiveness and safety requirements.
Bargaining power of suppliers
Nuclear reactor manufacture ...