Prices are expected to increase marginally over the next three years.
Los Angeles, CA (PRWEB) October 31, 2013
With a buying power score of 4.3 out of a 5-point scale, buyers of industrial printing services have highly favorable negotiating conditions. Factoring into the score is the stable pricing structure, stable market structure and limited market risk. According to IBISWorld procurement analyst Jesse Chiang, “In the past three years, prices have declined to historical lows as suppliers have had to lower prices to adjust to declining demand from downstream markets”. Market structure also favors buyers as low product specialization coupled with low market share concentration allows buyers to freely choose from a broad base of operators. Lastly, market risk has been minimal, despite declining downstream industries, as existing firms have maintained financial resiliency with diversified operations. Negotiating power is limited, however, by declining profit margins and minimal product substitutes.
The shift in consumer preferences from print to digital has hurt key markets, such as newspaper publishing, magazine publishing, and commercial printing, as consumers have decreased their demand of printed goods. This has limited the market for industrial printing services significantly. “Fortunately for buyers, declining markets have created favorable negotiation conditions”, says Chiang. First, prices have declined to historical lows and are projected to show low volatility. Thus, buyers are not rushed to make hurried purchasing decisions nor are buyers forced to accept unfavorable contract conditions. Instead, buyers can purchase ad-hoc services without risk of substantial price fluctuation.
Negotiating power, however, is limited by declining profit and medium levels of product substitution. Limited profit margins restrict the flexibility suppliers have to offer discounts. Buyers instead will have to adjust volume and breadth of services to negotiate rates. Furthermore, there are no direct substitutes, which hampers the ability of buyers to negotiate. Substitutes for services, such as personal binding machines, have significant drawbacks and produce limited quantities of print service products. This may not be practical for larger buyers of industrial print services. The three largest companies in the market are AlphaGraphics, EarthColor and Franchise Services.
For more information, visit IBISWorld’s Industrial Printing Services procurement research report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld Procurement Report Key Topics
This report is intended to help buyers of industrial printing services. Industrial printing service providers offer prepress and postpress services including printing plate preparation, image services, and bookbinding. These services support traditional printing activities. Operators offer services for various forms of commercial printing including flexographic industrial printing, rotogravure industrial printing, screen industrial printing, offset industrial printing, digital industrial printing, thermal transfer industrial printing, and compact disk duplication and printing. This report does not include commercial printing services, nor does it include industrial printing services that are not offered independent of commercial printing services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.