Prices are forecast to continue rising as input costs rebound and demand continues to grow
Los Angeles, CA (PRWEB) July 07, 2014
Purchasers of seismic monitoring equipment have a buyer power score of 2.7 out of 5, which indicates moderate buyer power in the market. According to IBISWorld procurement analyst Keiko Cadby, “while the high level of product specialization and high price driver volatility cuts into buyer power, moderate switching costs and negligible vendor financial risk facilitate purchasing conditions and improve buyer power.” Also, the rising level of import penetration has intensified price-based competition in the market, favoring buyers. As a result, buyers have some wiggle room to gain leverage during negotiations.
High market share concentration has hurt buyer power because of the limited number of seismic monitoring equipment suppliers available. Buyers are encouraged to elicit multiple bids for their seismic monitoring equipment needs, but may be negotiating with companies that have a great deal of control over the market. As such, the supplier's willingness to discount is hindered by the low availability of substitutes and high product specialization, both factors that increase the rarity of qualified suppliers. “Buyers can increase buyer power by limiting their customized purchases and seeking smaller vendors that are more competitive for business,” says Cadby.
Despite high price driver volatility, the overall price volatility for seismic monitoring equipment is low. Prices for seismic monitoring equipment have been rising steadily as demand from oil and gas companies grows with the domestic oil production rate. Although rising prices typically decrease buyer power, the low volatility allows buyers and suppliers to properly budget for future purchases without risk of sudden price hikes or drops. Low price volatility often accompanies low vendor financial risk, which also benefits buyer power due to the likelihood that the supplier will remain in business for the long term. As a result, multiyear contracts give the buyer time to develop a supply relationship with the vendor and allow for improved negotiability by locking in prices for future purchases. The top four vendors in the market are Compagnie Generale de Geophysique, ION Geophysical, Amphenol, and Geospace Technologies.
For more information, visit IBISWorld’s Seismic Monitoring Equipment procurement category market research report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Like IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of seismic equipment, which can detect geophysical movements and characteristics. Such equipment is used for oil and gas exploration, scientific research, ongoing monitoring and marine-based research. Types of seismic equipment include analog sensors, geophones, impulse sources and magnetic systems, as well as positioning equipment, seismographs and accelerographs. This report does not include seismic equipment parts, acoustic vibration equipment or rudimentary classroom seismic demonstration equipment.
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.