Don't be surprised if the share prices of LED manufacturers pop in the coming years. The LED lighting industry -- worth about $4.8 billion in 2012 -- will continue to grow 45% annually until 2019, according to Wintergreen Research. The research firm believes that sliding LED prices and rising environmental concerns will be the key drivers of growth. Which companies stand to benefit from this expected change in light bulb consumption? Let's find out. 

Leveraged growth
Cree (NYSE:WOLF) is one of the leading LED manufacturers in the world. It has played a vital role over recent years in pushing down LED bulb prices to practical price points below $20. Its efforts have in turn sparked the demand for LED bulbs that has stimulated growth in the industry.

Regarding market exposure, in the previous quarter Cree generated about 58% of its overall revenue from the sales of its LED bulbs, with about 9% global market share. The LED maker leads the industry not only by market share, but also in terms of innovation and growth. 

Despite intensifying market competition and sliding LED prices, Cree recently managed to expand its quarterly gross margins by 180 basis points on a year-over-year basis. This margin expansion was driven by its low-cost products and high factory utilization rate. Its LED sales also increased 3% over the same period. 

Management expects its factory utilization rate to remain at elevated levels, which should theoretically translate into sustained cost benefits. Additionally, Cree's LED cost reduction measures, which were just implemented in its previous quarter, should further add to its cost benefits in its next quarter. 

Cree is looking like a great way to tap the expected explosive growth in the global LED lighting industry.

Diversified growth
General Electric (NYSE:GE) is another LED-focused lighting solutions provider. The conglomerate solidified its foothold in the industry by acquiring key LED lighting and fixture companies over the recent years. Its investments in the field, in turn, are driving its top-line growth.

GE's appliance and lighting division posted sales of $1.857 billion in the first quarter of fiscal year 2014, representing about 5.4% of its overall revenue. More importantly, the segment posted a spectacular growth of 33% on a year-over-year basis -- faster than GE's most mature business divisions. 

The conglomerate unveiled six new LED bulbs over the recent months. Management expects these launches to further propel the growth of its lighting division in the next quarter. 

Risk-averse investors looking for diversified growth should therefore consider investing in GE. It has established operations and distribution channels in about 150 countries, which suggests that the LED maker won't have to struggle to find willing buyers. Plus, its diversified operations will result in balanced growth. 

Growth from retail operations
Amid this war of LED manufacturers, Wal-Mart (NYSE:WMT) stands to benefit as well. The retail giant has tied up with China-based lamp vendor TCP to bring LED bulbs to the U.S. at price points below $10. 

Since these bulbs are priced well below equivalent offerings from Cree and GE, Piper Jaffray's Jagadish Iyer concluded last year that OEMs like Cree will lose their competitive edge. Things have changed since then, though. 

After usage, LED Magazine has reported that Wal-Mart's relatively inexpensive LED bulbs have flickering and flashing problems during bulb tests. This could be a simple case of a defective bulb, as the manufacturer has reported a defective rate of less than 0.5% on the a-lamp bulbs. The Motley Fool is further investigating the performance and customer satisfaction of Walmart's bulbs to indicate whether this is a widespread consumer issue or one defective bulb.

Foolish final thoughts
The LED lighting industry has become hyper-competitive over the recent months. In such scenarios, it's rewarding to invest in industrywide leaders. Investors therefore might want to consider investing in GE and Cree to hedge their risks and balance their rewards.

Editors Note: this article previously stated consumers reported flickering light bulbs. This was incorrect, as LED Magazine was the sole reporter of the flickering. The Motley Fool apologizes for and regrets this error.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.