Commercial Condensing Units Procurement Category Market Research Report from IBISWorld has Been Updated

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Commercial condensing units have a buyer power score of 2.9 out of 5, which indicates that buyers have moderate leverage in negotiations; this score is due in part to low market concentration, low product specialization, growing demand and a high total cost of ownership. For these reasons and to help procurement professionals make better buying decisions faster, business intelligence firm IBISWorld has updated a report on the procurement of Commercial Condensing Units in its growing collection of procurement category market research reports.

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Significant growth in nonresidential construction has driven demand increases for commercial condensing units, pressuring prices upward; however, manufacturers’ metal purchase costs have declined, mitigating recent price growth

Commercial condensing units have a buyer power score of 2.9 out of 5, which indicates that buyers have moderate leverage in negotiations. Buyers benefit from the market's large number of suppliers. The market’s four largest firms are Wasco, Ingersoll Rand, United Technologies and Johnson Controls; in total, these firms generate about 20.1% of market sales. Thousands of heating, ventilation and air conditioning (HVAC) contractors, most of which are small operations, sell commercial condensing units. This market structure increases buyers' choices and heightens price-based competition. Some buyers can also purchase condensing units from upstream wholesalers and manufacturers, which allows them to avoid the markups that contractors apply. Buyers should note that manufacturers are restrictive in their sales and generally require their customers to have licensed HVAC technicians on staff to ensure that condensers are installed properly.

Buyer power is also elevated by the market's relatively low level of specialization. Condensing units come in a variety of configurations, which eliminates the need to customize products. Instead, new units are integrated into buyers' air conditioning systems in their stock form. This characteristic makes condensing units with similar specs interchangeable, which shortens lead times and reduces switching costs. Short lead times are critical in this market due to the vital role that air conditioners play in keeping building occupants comfortable. Also, low switching costs benefit buyers by reducing dependence on past suppliers.

However, buyer power is kept in check by this market's moderate and persistent price growth. Prices for commercial condensing units have been pressured upward by growing demand, which primarily results from rising construction activity. Additionally, a growing number of businesses and a rising corporate profit have increased demand for condensers for commercial air conditioning systems. Rising purchase costs are accompanied by high total costs of ownership, as electricity costs far surpass purchase costs for a condensing unit during its life-span. As such, the higher purchase price of a more efficient unit is usually justified by its reduced energy use. For more information, visit IBISWorld’s Commercial Condensing Units procurement category market research report page.

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IBISWorld Procurement Report Key Topics

This report is intended to assist buyers of commercial condensing units. Commercial condensing units are heat exchangers that are used to provide cool airflow to a facility in a split-system (i.e. central) air conditioning system. Condensing units are the portion of the air conditioning system located on the side or top of a building.

Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics

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.

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Gavin Smith
IBISWorld Inc.
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