The growing construction sector will be the main source of price increases during the next three years
Los Angeles, CA (PRWEB) November 25, 2014
Buyers of wood floor installation services have a buyer power score of 2.7 out of 5, with scores closer to 5 reflecting strong negotiation power. The wood floor installation market is extremely fragmented, benefiting buyers with the choice of many vendors. The value of residential and nonresidential construction increased during the three years to 2014, as the economy rebounded from the building slump during the recession. In addition, private spending on home improvement grew at a moderate rate. “Rising demand trends decreased buyer negotiation power as more buyers competed for existing suppliers,” says IBISWorld research analyst Kevin Young. “However, low barriers of entry allow suppliers to quickly meet rising demand in the market place, which helps to mitigate price increases by reducing supply shortages.”
Still, some aspects of the market are detrimental to buyer negotiation power. According to Young, “Switching costs can be significant, especially if buyers switch vendors during a project.” Also, the rising price of lumber, which is the main input for wood floor installers, has driven market prices up and cut into supplier profitability, causing suppliers to pass these costs on to consumers in the form of rising prices. However, price growth has been minimal due to a highly competitive and fragmented market with low average profit margins, leading suppliers to engage in fierce price-based competition to attract new buyers. This has benefited buyers by mitigating major price spikes. Low price volatility benefits buyer by allowing them to budget forecasts and project management easier.
Furthermore, buyers benefit from a moderate amount of substitutes, which allows them to opt for alternative products in the event that wood floor prices escalate. Buyers also benefit from low product specialization. The wood floor installation process can be easily learned, as evidenced by the frequency at which new suppliers have entered the market to meet demand spikes. Current major suppliers include Empire Today LLC, Creative Touch Interiors and Spectra Contract Flooring. For more information, visit IBISWorld’s Wood Floor Installation procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of wood floor installation and refinishing services. Small, independent contractors make up the bulk of suppliers that provide wood floor installation and refinishing services, though there are a number of large, commercial contractors operating in the market. While buyers have a large pool of suppliers to choose from, there are also a number of installation systems: the glue-down method, connection system, click system, and tongue and groove systems. All of these are different types of wood floor installation systems. This report excludes the installation of other types of flooring material, such as laminate or vinyl installation services.
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.