Case good prices have grown steadily due to a rising number of businesses, greater corporate profit and more activity in the nonresidential construction sector
Los Angeles, California (PRWEB) October 12, 2014
Case goods have a buyer power score of 3.0 out of 5, reflecting moderate negotiating power for buyers. IBISWorld market research analyst, Kiera Outlaw says, "Case good price movements are dependent on corporate profit levels, the number of businesses and the value of private nonresidential construction." These drivers grew at moderate rates during the past three years as the economy rebounded after the recession, which led to stronger demand and higher prices for case goods. Prices are expected to continue trending upward during the next three years as business conditions improve and demand for storage furniture products increases. Major vendors in the market include Ashley Furniture Industries Inc., Furniture Brands International Inc., and Steelcase Inc.
Rising lumber costs have also contributed to higher case good prices. "Although case goods can also be manufactured from metal components, a greater share of these products are made from wood," says Outlaw. As a result, increasing lumber prices forced suppliers with already-low profit margins to pass on cost increases to buyers in the form of higher prices, hurting buyer power. In addition, buyers had fewer opportunities to negotiate for more favorable prices due to these low profit margins being squeezed further.
Despite these factors, buyer power is bolstered by low price volatility and high market fragmentation. Low price volatility provides buyers with more certainty regarding the amount and direction of price movements, which enables buyers to obtain more favorable contract terms. Moreover, the highly fragmented network of case good suppliers makes it easier for buyers to find favorable deals. Low market share concentration also helps minimize switching costs, with buyers enjoying a vast network of suppliers to choose from that are capable of satisfying their requirements. Nevertheless, buyers are vulnerable to a risky supply chain with volatile input costs, such as steel and lumber. As a result, large-volume and frequent buyers should mitigate the risk of expected price increases by engaging in long-term contracts and locking in current prices. For more information, visit IBISWorld’s Case Goods procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of case goods. Case goods are furniture designed for storage, such as desks, credenzas, drawer sets and other storage and organization furniture. Case goods are predominantly made from metal and wood, although plastic case goods are also available. Market products are distributed by manufacturers, wholesalers and retailers, and are used in offices, at industrial sites and other commercial environments.
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
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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.