Through 2017, prices will continue to fall at a slightly slower rate due to low cost foreign competition moderated slightly by rising demand
Los Angeles, CA (PRWEB) December 19, 2014
Technical support and help desk services have a buyer power score of 4.6 out of 5, which indicates a high amount of negotiation power for buyers due to minimally volatile price declines, low market share concentration and a high availability of substitutes. “Buyers also benefit from a stable vendor supply chain and low-cost foreign wages,” according to IBISWorld business research analyst Michelle Hovanetz.
Prices for outsourced technical support have fallen consistently during the past three years, which has a very positive effect on buyer power because it encourages negotiation on the part of the supplier and allows buyers more time to evaluate purchases with a lower risk of price increases. Falling prices can primarily be attributed to intense competition both domestically and abroad. The technical support and help desk services market has low market share concentration, and there are many small and large competitors that offer the same services internationally and across the country. Although large suppliers maintain considerably higher revenue streams due to their ability to meet the capacity major service and manufacturing firms require, many smaller suppliers are still capable of competing for the business of small and medium-size businesses.
A high degree of substitutes available to buyers, namely the ability to create an in-house customer service department, increases buyer power. “Suppliers are forced to keep prices low to keep buyers from switching to these alternatives,” says Hovanetz.
Additionally, foreign competition contributes the greatest downward pressure on price. Suppliers based out of India and the Philippines, the two largest technical support outsourcing hubs, have the benefit of significantly lower wages costs that allow them to offer much lower prices than some competitors. Technical support service suppliers have a stable supply chain, which makes the risk of price spikes due to supply chain problems unlikely. Labor is the primary input cost to suppliers, and wages have fallen as a percentage of revenue. In addition, there is always a pool of qualified labor available. A stable supply chain helps to keep price volatility low, which benefits buyers because it allows for accurate budget planning. Major vendors include Accenture PLC, International Business Machines Corporation and Xerox Corporation. For more information, visit IBISWorld’s Technical Support & Help Desk Services procurement category market research report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Like IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of technical support and help desk services. Technical support and help desk service providers field questions and incoming calls from customers in need of assistance with product or service features. Businesses can outsource technical support and help desk services to companies that specialize in handling inquiries to free up internal resources. This report does not include telemarketing 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.