Los Angeles, CA (PRWEB) April 16, 2014
Electric AC motors have a buyer power score of 3.4 out of 5. This score indicates that suppliers have slightly more power in negotiations, based on their ability to raise prices on electric AC motors during the three years to 2013. Suppliers increased prices due to rising demand for electric AC motors and the rising costs of inputs, freight and gasoline. “Factors that boosted buyer power include low market share concentration, a low level of product specialization and relatively low switching costs,” says IBISWorld business research analyst Jeffrey Cohen.
The price of electric AC motors has increased during the past three years due to increasing demand among key buying industries and volatility in the price of its primary inputs: steel, aluminum and copper. Rising input prices have increased the cost of manufacturing electric AC motors and suppliers responded by passing off rising costs in the form of higher product prices to buyers. Additionally, because demand for electric AC motors increased during the past three years, suppliers were able to raise prices to expand profit margins. “Greater demand hurts buyers because it limits their ability to negotiate prices,” says Cohen. In addition, because freight costs and the price of gasoline increased during this period, manufacturers passed these costs onto buyers as well, which further reduced buyer negotiation power.
Buyer negotiation power is positively affected by low market share concentration: the top four electric AC motor suppliers make up 17.0% of market share. This means that the market is highly fragmented and therefore, buyers have a wide selection of suppliers that are willing to compete for their business. Also, electric AC motors are typically homogenous products and because there are hundreds of suppliers in the manufacturing and wholesale channels, buyers have a wide selection of suppliers that can fulfill their needs. Additionally, buyers wanting to switch suppliers will experience little difficulty: many suppliers provide these products and have vast experience serving buyers in various industries. Major vendors include Eaton Corporation, General Electric Company, Siemens AG and Regal-Beloit. For more information, visit IBISWorld’s Electric AC Motors procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of electric AC motors. AC motors are used in a wide range of applications, such as automobiles, pumps, fans, conveyors, machine tools, and heating and cooling. This report does not include electric DC motors.
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.