Sprocket prices are forecast to continue growing through 2017 due to rising input costs and demand
Los Angeles, California (PRWEB) December 27, 2014
Sprockets have a buyer power score of 3.0 out of 5, which indicates a balance of negotiating power between suppliers and buyers. According to IBISWorld market research analyst, Cameron Roark, "The key source of buyer power stems from low market share concentration, a high level of imports and low switching costs." Nevertheless, volatile input costs and price growth restrict buyer power.
Buyers benefit from high competition in the market, which places downward pressure on sprocket prices. "Buyers have many vendors to choose from when procuring sprockets, giving them leverage in price negotiations," says Roark. Nearly half of domestic demand is satisfied by imports, which places pressure on domestic suppliers to engage in price-based competition. Additionally, the US dollar is expected to increase in value over the next three years, which will make imported goods even less expensive. Furthermore, buyers can switch between vendors in the market with little to no switching costs, further strengthening buyer power. Major vendors in the market include ABB Ltd., Emerson Electric Co. and Rexnord Corporation.
However, buyers are exposed to moderate supply chain risk in the market, mostly stemming from upstream steel suppliers. Steel is the largest input cost for sprocket suppliers and has exhibited high levels of volatility over the past three years. Vendors cannot accurately predict the future price of steel, so they have steadily increased sprocket prices to mitigate the risk of input price spikes. Strengthening performance in demand drivers also indicates that demand for sprockets will continue to grow, contributing to rising prices.
Although prices are expected to continue increasing over the three years to 2017, buyers can still use rising imports and competition to leverage better deals with domestic suppliers during price negotiations. Moreover, low volatility in the overall price of sprockets allows buyers to accurately budget for purchases. Buyers may consider entering into long-term contracts to secure lower rates in anticipation of growing sprocket prices. For more information, visit IBISWorld’s Sprockets procurement category market research report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Like IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of sprockets, also known as sprocket-wheels. Sprockets are wheels with teeth, or cogs, located on the rim, which engage with links on a roller chain. Sprockets are typically used where slippage is not permissible. Sprockets are mainly used to transmit rotary motion in bicycles, motorcycles, automobiles, tracked vehicles and industrial machinery. This report does not include hubs or gears.
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.