Buyers have faced rising network switch prices, resulting primarily from strong demand growth through rising private investment in computers, broadband connectivity and employee rates
Los Angeles, CA (PRWEB) April 11, 2015
Network switche s have a buyer power score of 3.2 out of 5. According to IBISWorld analyst Cameron Roark, this score reflects slightly positive negotiation conditions for buyers, resulting primarily from the minimal supply chain risk, low geographic barriers and marginal buyer switching costs within this market. A wealth of demand for computer-related products and strong competition between suppliers within the network switch supply chain have mitigated the risk of price shocks imposed on buyers. Meanwhile, buyers have strong accessibility to suppliers all over the world due to low geographic barriers, and they can switch suppliers at minimal cost due to low product specialization and short buying lead times. Together, these factors create an environment in which suppliers have a strong incentive to negotiate.
Nonetheless, buyer power is quickly diminishing. As the economy has demonstrated strong growth during the past three years, businesses have grown their resources, stimulating strong employment growth and increased private investment, continues Roark. Meanwhile, the number of broadband connections within the United States has swelled, stimulating increased internet use among enterprises. The rise in employment and internet use has pressured companies to increase the size and efficiency of their computer networks, while mounting resources have provided them the means to do so. Because network switches are a key component in increasing the size and efficiency of a network, network switch demand has risen considerably in response to these drivers. As a result, the competitive pressure on suppliers has been progressively alleviated, driving down buyer power within this market.
Suppliers of network switches include Huawei Technologies Co. Ltd., Hewlett-Packard Development Company LP and Cisco Systems Inc. Although manufacturers will generally obtain lower initial prices, the wholesale market is more competitive, giving buyers more leverage with wholesalers to exchange long-term agreements for discounted prices. Meanwhile, wholesalers, which offer a broader range of products, will generally provide more opportunities for buyers to obtain bundling discounts and spread their shipping costs. Therefore, buyers negotiating with wholesalers should also look for ways in which they can combine purchases to gain additional leverage in the network switch market. For more information, visit IBISWorld’s Network Switches procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of network switches. Switches connect devices together within an internal network through a variant of packet switching to manage data packet traffic. Switches are considered to be more efficient and functional than their counterparts, particularly hubs. They are more efficient because instead of flooding the network with data forwarded through hall ports, only designated ports receive the data. Most devices use Ethernet to communicate data from one device to anther; as such, only electrical devices that have Ethernet slots, such as computers, printers, servers and routers, are capable of communicating through switches. This report excludes routers, modems, hubs and bridges.
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.