Demand and prices for meteorological services will continue to rise because advancing technology and improved accuracy have expanded applicability to new markets
Los Angeles, CA (PRWEB) December 11, 2014
Meteorological services have a buyer power score of 2.8 out of 5. This score reflects a mixed level of negotiating power for buyers. “Buyers benefit from high competition among suppliers, falling switching costs and low supply chain risk, but rising demand from multiple sectors and volatile external drivers reduce buyer power significantly,” according to IBISWorld business research analyst Keiko Cadby.
Merger and acquisition (M&A) activity is high, which increases market share concentration and slowly reduces supplier options for buyers. Along with this trend, larger firms have included value-added services such as risk management consulting and insurance advisory services to their inventory as means to bolster their breadth of client offerings. This further increases the intensity of competition among suppliers, which can mitigate prices as firms compete for clientele. Profit margins are high and are expected to grow as weather forecasting duties become increasingly dependent on computer analysis and less dependent on human labor. “As service providers earn some wiggle room to discount prices, opportunities arise for buyers to negotiate lower service prices,” says Cadby.
Demand for meteorological services has been increasing as businesses from multiple sectors realize the applicability of weather and environmental condition forecasts with their products, personnel and operations. The frequency of severe weather is a significant demand driver for meteorological services because advanced warnings and current conditions become invaluable in situations where danger, damages and delays can be prevented.
Nevertheless, other factors in the purchasing process work in favor of the buyer. For example, a low total cost of ownership help buyers budget for their needs, and low supply chain risk reduces factors that may destabilize a service provider's financials. Buyers can enter longer term agreements with less risk of contract disruption, as well as nurture relationships that may garner better discounts over time. In situations where buyers want to switch service providers, rising standardization and improved accuracy of meteorological services help buyers reduce switching costs because service quality will vary less among competitors. Major vendors include the Weather Channel LLC, AccuWeather Inc., Earth Networks Inc. and Fugro NV. For more information, visit IBISWorld’s meteorological Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of meteorological services. Contractors provide forecasts of future weather activity for individuals, businesses and government organizations, which include atmospheric data collection and processing for weather observations that may affect aviation, shipping and the public. This report excludes other services that involve weather observation such as atmospheric research and environmental remediation 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.