Due to high volatility in the price of steel and steady growth from downstream markets, suppliers have been prompted to keep prices on the rise during the last three years
Los Angeles, California (PRWEB) November 03, 2014
IBISWorld calculates a buyer power score of 2.7 for industrial brakes, indicating reduced negotiation power for buyers. IBISWorld market research analyst, Scott Winters, says, "The primary driver behind this lack of buyer power is high demand for industrial brakes." With sales on the rise, suppliers have minimal incentive to compete on price and provide discounts or special offers. Besides these widespread market factors, the buyer's individual application significantly affects buyer power. Buyers with a unique or particularly challenging application will experience lower buyer power, while a standardized application affords buyers more power. However, low price volatility reduces the risk facing buyers because there is little chance of a price spike suddenly hitting the market. Major vendors in the market include Altra Industrial Motion Inc., Eaton Corporation and Emerson Electric.
Demand for industrial equipment is on the rise, as shown by steady improvements in the industrial production index and the value of construction. "As demand for industrial equipment grows, sales of industrial brakes rise in step, giving supplier ample leverage to raise prices," says Winters. A lack of substitutes in the market contributes to low buyer negotiating power by reducing buyers' ability to leverage other options. Furthermore, buyers with specialized applications may face a lack of qualified suppliers in their area, either forcing them to use a less qualified supplier or incur high shipping and transportation costs by using a distant supplier.
However, buyers can still take advantage of a few powerful negotiating tactics when purchasing industrial brakes. Switching costs are moderate but involve mostly time and effort, keeping overall costs low. Stable wages and overhead costs improve supplier stability and reduce the occurrence of price spikes or supply interruptions. This factor in turn allows buyers to enter into long-term contracts with their chosen suppliers, affording them favorable pricing terms. Overall, buyers should purchase industrial brakes now to lock in the current price. For more information, visit IBISWorld’s Industrial Brakes procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of industrial brakes. Industrial braking systems are start/stop systems used in conjunction with hoisting and pulley systems for mining, construction, drilling rigs, elevators and stage, and speaker or scoreboard systems. There are several types of industrial brakes, including drum brakes, disc brakes and electromagnetic brakes. This report does not include industrial clutches or brake/clutch combinations.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
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.