The price of ice and snow surface treatment will increase due to rising demand from local and state governments
Los Angeles, CA (PRWEB) December 05, 2014
The buyer power score for ice and snow treatments is 3.2 out of 5, indicating slightly favorable negotiating conditions for buyers. Buyers gain significant leverage from low product specialization and low switching costs. “Consequently, buyers have the ability to choose from numerous skilled operators and select from the operators on a variety of factors,” according to IBISWorld business research analyst Jesse Chiang. However, buyer power is limited by significant price volatility, which has been fueled by rising input costs and growing demand for market products.
There are numerous experienced suppliers in the market because manufacturing and distributing market products does not require specialized knowledge or expertise. Products in the market are fairly commoditized, differing minimally in quality and functionality between suppliers. Thus, there is low specialization in the market. This allows for buyers to choose suppliers based on a variety of alternative factors, such as level of service or price. Buyers also benefit from low switching costs. This allows for buyers to switch between operators without significant restrictive expenses. “Thus, buyers can either threaten to switch to a lower price supplier to obtain a better price from the current supplier, or the buyer can simply source from the supplier with the lower price” says Chiang.
The high level of price volatility has limited buyer power in the three years to 2014. Price volatility has been high due to volatile input costs and surging demand for ice and snow surface treatments. Volatile price growth hurts buyers because it makes it more difficult for buyers to project costs and forces buyers to engage in contracts to reduce the risk of drastically escalating costs. Worse yet for buyers, price volatility can be high within a given year. During winter seasons there are often shortages for ice and snow surface treatments, forcing buyers to pay prices that are far above the typical price for market products. Buyers can mitigate such risks by engaging in contracts to reduce the risk of volatility and to ensure that they have enough ice and snow surfaces treatments. Major vendors include Cargill Inc., Compass Minerals International Inc., Morton Salt and United Salt Corporation. For more information, visit IBISWorld’s Ice & Snow Surface Treatments procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of ice and snow surface treatments. This includes chemical and inert spreading that induces freezing point depression and helps remove ice and snow on the ground. Ice and snow surface treatments include rock salt, sodium chloride, calcium chloride and magnesium chloride.
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.