The LED lighting and fixtures based industry is an emerging industry that has only recently grown to a significant size. The patented nature of the technology and the protected formulas for the component ratios in the LED lighting makes the threat of new entrants minimal for the next few years at least. This is because the barriers to entry in the industry are relatively high as the technology is highly protected through patents and licenses by those companies that are already operating in the industry. However technology innovation in the industry can lead to some limited new entrants entering the market.
The bargain power of the suppliers is considerably high in the market for LED lighting and fixtures. This is because the technology used for manufacturing the LED lighting is complex and specialized in nature which requires specific components. These components are available through a limited number of suppliers making their power relatively high in the market. Similarly for the distributors of the LED lighting and fixtures, the manufacturers who provide them with the LED lighting technology and fixtures have a higher bargain power as they are the suppliers of the distributors for LED lighting technology and fixtures.