As construction activity grows, demand and prices for locks and security hardware will rise
Los Angeles, CA (PRWEB) June 07, 2014
Buyers of locks and security hardware have a buyer power score of 2.9 out of 5. The higher than average score indicates that buyers have more leverage during the purchasing process. Demand for products is tied to an improving economy that prompts more building construction and greater car sales. According to IBISWorld procurement analyst Aileen Weiss, “this demand enables suppliers to raise product prices.” A low product specialization and numerous vendors to select from help in the negotiation process. However, buyer power is limited by few substitutes and a medium market share concentration, which provides top suppliers with more power.
A low product specialization benefits buyers. Both simple and advanced locks and security hardware are relatively standardized and mass-produced, making them easier for buyers to find and purchase. A large selection of vendors also benefits buyer power. Though the market share concentration is moderate, competition is high among suppliers. “Suppliers therefore create a wider distribution network and offer improved technological features to attract new buyers,” says Weiss. The standardized nature of locks also means that different firms are likely to carry similar products, which makes it easier for buyers to switch suppliers.
Though moderately high, buyer power is limited by a low level of substitute goods. Buyers have few realistic product or service options to switch to. The medium market share concentration also hinders buyer power. The largest suppliers are very powerful, making it more difficult for new and emerging firms to compete with the top vendors. To leverage negotiation power, buyers may pit similar size vendors against one another to secure lower prices, though buyers should compare the product offerings and customer service from an array of firms to understand what others are offering in the market.
Heightened national security will continue to generate high demand for different types of locks and encourage more purchases. To avoid fluctuating input costs and higher prices, buyers should make purchases now and secure prices with long-term contracts. Finally, buyers should evaluate the capabilities of different locks and security hardware to ensure the appropriate product is purchased. The top four vendors in the market are Stanley Black & Decker, Fortune Brands Home & Security, Ingersoll Rand and Assa Abloy.
For more information, visit IBISWorld’s Locks and Security Hardware procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of locks and security hardware. Locks include electronic or mechanical clasps that are released by a physical object (such as a key, keycard, radio frequency identification card, security token or fingerprint) or confidential information (such as a key code, password or combination). This report excludes lock accessories, surveillance and detection equipment and alarm systems.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
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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.