During the three years to 2017, the price of cooking and warming equipment is forecast to increase further due to continued rising demand among downstream markets
Los Angeles, CA (PRWEB) December 26, 2014
Cooking and warming equipment has a buyer power score of 3.1 out of 5. This score reflects slightly positive negotiation conditions for buyers, stemming from a low level of product specialization, low switching costs and a low level of price volatility. “However, buyer power is reduced by the low availability of substitutes for cooking and warming equipment and high volatility in the world price of steel and aluminum, key inputs in the production process of this equipment,” according to IBISWorld business research analyst Jeffrey Cohen.
The low level of product specialization positively impacts buyer power because many suppliers are capable of providing buyers with cooking and warming equipment of similar quality. Therefore, when purchasing standard pieces of equipment, buyers have a larger pool of suppliers from which to choose. This factor increases price-based competition among suppliers vying for a greater share of the market. Switching costs are also low, which boosts buyer power by making it easier for buyers to find a new supplier if their current supplier is not providing them with a satisfactory level of service. Because buyers can easily switch suppliers, they can use this as leverage during the negotiation process to receive a more competitive price. “Furthermore, a low level of price volatility positively impacts buyer power because it improves buyers' ability to budget accurately for future purchases,” says Cohen.
However, some market conditions hurt buyer power. For instance, there are no direct substitutes for cooking and warming equipment as a product group. Therefore, buyers do not have the option of selecting alternative products from competing suppliers, which gives buyers less leverage during the negotiation process. Further reducing buyer power during the past three years was high volatility in the world price of steel and aluminum, which prompted suppliers to increase the price of cooking and warming equipment to protect profit margins. Major vendors include Hobart Corporation, Clark Associates Inc., and Edward Don & Company. For more information, visit IBISWorld’s Cooking & Warming Equipment procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of cooking and warming equipment. Cooking equipment includes appliances used to prepare food, such as fryers, ovens, grills, rotisseries, kettles and steamers. Equipment used to warm foods includes microwaves, toaster ovens, toasters and warmers. Suppliers of cooking and warming equipment include manufacturers, distributors and retailers. The primary types of buyers of cooking and warming equipment are restaurants, hotels, healthcare facilities, educational institutions and supermarkets. This report excludes food refrigeration, storage and concession equipment, smoking machinery and food cutting machinery.
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.