During the past three years, economic recovery has contributed to an increase in private investment in industrial machinery and equipment from key buyers; as a result, demand for packaging machines has risen, causing suppliers to raise prices
Los Angeles, CA (PRWEB) March 13, 2015
Packaging machines have a buyer power score of 3.0 out of 5, indicating that neither buyers nor suppliers have a distinct advantage in price negotiations. Low market share concentration and low price volatility have had a positive impact on buyer power, while the low availability of substitutes has cut into buyer power during the past three years.
Low market share concentration contributes to high price-based competition among suppliers, which boosts buyer power. Because suppliers are fighting to gain market share, vendors are more willing to negotiate lower prices to attract customers. Buyers have also benefited from the low level of price volatility during the past three years. “Buyers do not have to worry about huge spikes in prices, and suppliers are more willing to negotiate a lower price over a multiyear contract knowing that prices will not jump significantly during the time frame,” according to IBISWorld business research analyst Jeffrey Cohen. While the moderate level of product specialization does not directly improve buyer power, many types of packaging machines are still standardized. Because there are an estimated 1,000 suppliers that operate in the market, buyers that seek to purchase standardized packaging machines will have many suppliers to choose from. Additionally, buyers will have added leverage when negotiating price. The top manufacturers that operate in this market are Bosch Packaging Technology, Nordson Corporation and Gebo Cermex. Buyers can benefit from working with these manufacturers due to their well-established nature and experience with successfully delivering packaging machines.
However, the low availability of substitutes hampers buyer power by limiting buyers' leverage during the negotiation process. Although buyers can have their employees perform the functions of packaging machines, this will significantly reduce the buyers' productivity. Consequently, there are no direct substitutes available, which limits buyer power. “Because prices are forecast to rise in the next three years, buyers are encouraged to purchase packing machines now to avoid paying more in the future,” Cohen says. For more information, visit IBISWorld’s Packaging Machines procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of packaging machines. Packaging machines are designed to insert objects into containers, such as boxes, plastic packages, bags, pouches, cartons, bottles and tubs. Suppliers of packaging machines include manufacturers and wholesalers. The primary buyers of packaging machines are food producers, beverage producers, pharmaceutical manufacturers and household product manufacturers. Flexible intermediate bulk containers are excluded from the scope of this report.
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.