Los Angeles, CA (PRWEB) June 10, 2014
Batteries have a buyer power score of 3.6 out of 5, which indicates that buyers have more negotiating power than suppliers in this market. Buyers benefit primarily from low market share concentration. “Thousands of vendors in the market at every point in the supply chain compete for business due to the low barriers to entry,” says IBISWorld procurement analyst Cameron Roark. The market is mainly divided into a small number of large suppliers generating a significant portion of total sales and a large number of small suppliers generating the majority of total sales. Low market concentration forces vendors to compete on the bases of price, customer service and quality assurance, all of which benefit the buyer.
While competition has placed downward pressure on prices, rising downstream demand has been driving marginal price growth during the three years to 2014, slightly detracting from buyer negotiation power. Strong and consistent performance in the industrial production index (IPI), the trade-weighted index (TWI) and consumer spending have all driven sales for alkaline batteries. “The ubiquitous nature of batteries coupled with the expansive existing supply chain makes the purchasing process of alkaline batteries easy, fast and convenient,” says Roark. At the same time, some input costs have been rising, such as the price of nonferrous metals that are used in the production of alkaline batteries. Additionally, vendors and the supply chain both exhibit a moderate level of risk. This risk exposes buyers to price fluctuations, which can occur at any level in the supply chain.
Buyers can leverage the availability of other vendors, low specialization and low switching costs to improve their rates. Typically, buyers can negotiate with vendors to secure discount prices when purchasing in bulk, especially with large vendors that have higher average profit margins than smaller vendors. Price performance is stable in the market, meaning that buyers are not pressured to enter into contracts. However, entering into contracts can further reduce prices per unit and provide additional quality products or services. Major vendors in this market include Batteries Plus, Battery Alliance Inc., Battery Technology Inc. and DC Battery Specialists.
For more information, visit IBISWorld’s Batteries procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of nonrechargeable and rechargeable alkaline batteries. Alkaline batteries are commonly found in everyday portable devices, including MP3 players, digital cameras, pagers and CD players. This report excludes system-powering and industrial batteries, such as lead-acid, nickel-iron, nickel-hydrogen and thermal batteries.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
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.