Los Angeles, CA (PRWEB) April 24, 2014
Facility safety and risk analysis services have a buyer power score of 3.4 out of 5. Although price growth has been moderate and price volatility has been low, a variety of factors have stifled buyer power in the past three years. In particular, new business growth, increased private investment in industrial machinery and manufacturing structures, and tightening regulations have sent demand for these services upward, says IBISWorld analyst Daniel Krohn. Faced with escalating demand, suppliers have less incentive to negotiate with buyers, thereby diminishing buyer power.
Buyer power is also limited by the market's restricted distribution scope. In-person evaluations continue to be the only suitable distribution channel because the consequences of delivering poor-quality service are severe and may potentially result in substantial fines, civil lawsuits, production shutdown, employee injury or even death. Consequently, buyers are limited to local suppliers of safety and risk analysis; otherwise, they incur substantial costs associated with transporting consultants to their facilities, continues Krohn. In either case, the buyer's ability to negotiate with suppliers is compromised.
Nonetheless, low barriers to entry allow an influx of new vendors to enter the facility safety and risk analysis market, while short project lead times allow buyers to switch suppliers at very little cost. Together, these create a growing competitive advantage for buyers. While demand is forecast to continue to outpace the anticipated rise in competition in the next three years, the escalating threat of competition is forecast to alleviate some of the downward pressure on buyer power and help prevent prices from spiking.
The complexity and size of the buyer's facility will impact the amount of negotiating power they experience. Buyers with larger, more complex facilities will require more specialized service than those with smaller standard facilities, thereby affording them fewer supplier options. Furthermore, buyers with large, complex facilities will often be limited to a time-based price model. Consequently, these buyers will have substantially less leverage when negotiating with suppliers. For more information, visit IBISWorld’s Safety & Risk Analysis procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of facility safety and risk analysis services. These services provide a thorough look at facilities to identify situations and processes that may cause harm, particularly to people. Threats may include natural events, accidents or intentional acts to cause detriment. Facility safety and risk analysis services identify potential hazards within facility operations, evaluate the severity of the hazards and provide suggestions for mitigating risk and preventing harm. These services provide risk assessment for the purposes of improving workplace safety and increasing a company's ability to meet regulatory requirements. Services do not include risk assessment for the purpose of insurance evaluation.
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.