Buyer power is restricted by the medium level of substitutes available in the market
Los Angeles, CA (PRWEB) November 18, 2014
Online file storage services have a buyer power score of 4.2 out of 5, indicating strongly favorable negotiating conditions for buyers. Buyers gain significant power from high market competition, which has been driving significant price decreases in the three years to 2014. High competition and decreasing prices are anticipated to continue in the next three year period, further boosting buyer power. “Buyer power is somewhat restricted by the medium level of substitutes in the market, each of which has significant drawbacks,” according to IBISWorld business research analyst Jesse Chiang.
High market competition has been forcing suppliers in the market to continuously decrease prices. Some vendors in the market, such as Google, have priced services close to their cost. Such companies have sacrificed revenue and profit to attract consumers to their services in the hope that new customers will provide them with valuable marketing information and eventually earn them revenue through purchases of other services and products. This level of competition has forced other operators to significantly decrease prices and offer more services for free to appeal to customers. As a result, the price of online file storage services has been declining precipitously in the three years to 2014. Service prices are anticipated to continue to decrease in the three years to 2017. “High competition and lower prices will continue to raise buyer power during this period,” says Chiang.
Buyer power is restricted by the medium level of substitutes available in the market. While there are numerous alternatives to market services, each of these substitutes has restrictions. Portable storage devices, for example, can store a large amount of documents and cost less than a subscription to online file storage services; however, users must have the storage device and a compatible device reader in order to access files. Due to the limited reach of direct substitutes in the market, buyers are forced to purchase from market vendors even if they do not find negotiating conditions agreeable and buyer power is lowered. Major vendors include Amazon Web Services, Apple Inc., Microsoft Corporation and Dropbox Inc. For more information, visit IBISWorld’s Online File Storage Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of online file storage services. Online file storage services allow buyers to store digital files and documents on the internet, reducing the need for storage on physical devices. This service also enables buyers to access digital files from multiple devices and in any location with an internet connection. This report does not include document archival services, document scanning services, social media sites or picture sharing sites.
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
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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.