Renewed industrial activity and rising consumer spending will fuel growth in market prices in the next three years.
Los Angeles, CA (PRWEB) April 30, 2015
Paperboard and packaging papers have a buyer power score of 3.0 out of 5. This score reflects modestly favorable negotiating conditions for buyers. Buyers benefit from a high number of substitutes, low specialization and low switching costs, which allow buyers to choose from a large number of suppliers when purchasing paperboard and packaging papers. However, negotiating power is limited by the rapidly increasing price of paperboard and packaging papers. “The mounting prices of these products force buyers to quickly engage in contracts because prices are expected to increase significantly over time,” says IBISWorld procurement analyst Jesse Chiang.
Low product specialization and low switching costs increase buyer negotiating power in the paperboard and packaging papers market. Manufacturing and distributing paperboard does not require specialized machinery or knowledge. Consequently, there are many operators in the market from which buyers can choose. Also, paperboard grades are commoditized among companies, ensuring that quality varies minimally between operators. “Market products also differ minimally in functionality, limiting potential learning costs,” adds Chiang. “With minimal risks in switching between operators, buyers can select from suppliers on a variety of factors, including price and level of service.” Low specialization also means that buyers can choose between a wide variety of buyers that offer different capabilities and service advantages. Buyers also benefit from the high number of substitutes, which buyers can use as leverage in negotiations with suppliers.
Buyer power is largely limited by the rapidly increasing price of paperboard. In the three years to 2015, the price of paperboard and packaging papers has drastically increased in response to rising demand for paperboard. Growing demand for paperboard has allowed suppliers to increase prices and boost profit margins without risking significant losses in demand. Prices are expected to continue growing during the three years to 2018, which will hurt buyers. Surging prices will force buyers to engage in contracts to lock in prices and to seek discounts by leveraging a larger total value for lower per unit costs. For more information, visit IBISWorld’s Paperboard & Packaging Papers procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of paperboard and packaging papers. Paperboard and packaging papers are made from layered paper and include bleached and unbleached paperboard, boxboard, containerboard, packaging paper and fiberboard, which are used as primary materials for conversion into finished packaging products. This report excludes tissue, laminated paper and finished packaging products such as cardboard boxes.
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
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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.