Despite mildly rising demand, slow growth in raw material prices and a high level of competition among suppliers will keep growth in office desk prices slow through 2018.
Los Angeles, CA (PRWEB) April 28, 2015
Office desks have a buyer power score of 3.6 out of 5, reflecting favorable market conditions for buyers. Slow price growth, low market share concentration, minimal product specialization and low switching costs have helped boost buyers' negotiation power. “There is a low level of market share concentration among office desk suppliers due largely to the standardization of products from provider to provider,” says IBISWorld procurement analyst Michelle Hovanetz. “Although office desks can be customized slightly according to color or other basic features, an overall low level of specialization allows buyers to purchase from a large number of suppliers offering comparable products.” These market conditions ultimately give buyers greater purchasing power and result in significant price-based competition, indicating no single supplier has a commanding share of the market. Consequently, price growth has been slow during the past three years.
Although some buyers enter multiyear contracts with suppliers, low switching costs allow buyers to purchase office desks on an ad hoc basis. “Low switching costs provide greater flexibility and ability to negotiate with suppliers, allowing buyers to avoid long-term contracts and change suppliers as they see fit without fear of price shocks,” adds Hovanetz. As a result, low switching costs encourage suppliers to negotiate to keep their customers because there is no assurance they will retain customers from purchase to purchase.
During the past three years, the rising prices of raw material inputs, such as lumber and plastic, have been pressuring purchasing costs for office desk manufacturers up. However, high competition among suppliers has helped slow this price growth. Despite volatility in raw material prices, volatility in the price of office desks has been low during the past three years. Significant price-based competition allows office desk manufacturers and wholesalers desks to maintain slim average profit margins in an effort to contend with rising input costs. This trend contributes to a moderate bankruptcy risk among suppliers, which puts buyers at slight risk of supply disruptions. Still, buyer power remains in buyers' favor due to the market's wide selection of suppliers. For more information, visit IBISWorld’s Office Desks 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 office desks, which are designed to provide a working, writing and computing surface in an office environment. Office desks are most commonly made of solid wood, veneer, laminate, plastic or steel and can be purchased via manufacturers, wholesalers and retailers. This report excludes furniture intended for household use.
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.