Los Angeles, CA (PRWEB) May 27, 2014
The buyer power score for traffic signs is 3.9 out of 5, indicating a medium level of buyer power in the market. Moderate buyer power means buyers and suppliers have an equal amount of leverage during negotiations. According to IBISWorld analyst Kayley Freshman-Caffrey, buyer power for traffic signs is influenced primarily by the availability of substitutes, supply chain and vendor risk, product specialization, and market share concentration present in the market.
A low availability of substitutes characterizes the market, because traffic signs are legally mandated and therefore cannot be replaced by other products. Low availability of substitutes reduces the buyer's ability to negotiate lower prices by leveraging the availability of alternative goods. As a result, the low availability of substitutes has a dampening effect on buyer power. Additionally, moderate supply chain and vendor risk challenges buyer power, continues Freshman-Caffrey. Moderate supply chain and vendor risk increases the chance that the fulfillment of a buyer's order will be disrupted due to the bankruptcy of their supplier or a member of their supplier's supply chain. Buyers can reduce this risk by dealing only with suppliers who have diversified their supply chain and instituted sound financial policies.
On the other hand, the low degree of product specialization for traffic signs aids buyer power. Traffic signs are standardized as a result of regulations governing their appearance and consistency and, therefore, are the same from one supplier to the next. This standardization is beneficial for buyers because it gives them a wider variety of suppliers to choose from, which they can leverage during negotiations. Major suppliers include Champion America, SmartSign and Sign-A-Rama. Low market share concentration also helps buyer power by leading suppliers to compete intensely to gain the favor of buyers, resulting in lower prices. Overall, the positive effects of low product specialization and low market share concentration mitigate the negative impacts of the low availability of substitutes and moderate vendor and supply chain risk to give buyers a moderate amount of power. For more information, visit IBISWorld’s Traffic Signs procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of traffic signs, including directional signs, parking signs, pedestrian signs, speed limit signs and road warning signs. This report does not cover variable message signage, traffic signals or signs used for purposes unrelated to traffic.
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.