Prices for seismic monitoring equipment are estimated to continue rising at an accelerated rate as input costs rebound and demand continues to grow
Los Angeles, CA (PRWEB) January 14, 2015
Purchasers of seismic monitoring equipment have a buyer power score of 2.8 out of 5, which indicates moderate buyer negotiation power in the market. Although high market share concentration and a high level of product specialization cut into buyer power, low price volatility, moderate switching costs and negligible vendor financial risk facilitate purchasing conditions and improve purchasing leverage. “The rising level of import penetration has also intensified price-based competition in the market, which has favored buyers with wiggle room to gain leverage during negotiations,” according to IBISWorld business research analyst Keiko Cadby.
High market share concentration has hurt buyer power because it signifies a limited number of seismic monitoring equipment suppliers available. Buyers are encouraged to elicit multiple bids for their seismic monitoring equipment needs, but could negotiate with companies that have a great deal of control over the market. Suppliers' willingness to discount is hindered due to a low availability of substitutes and high product specialization, which both increase the rarity of qualified suppliers. “Buyers can limit making customized purchases and also seek vendors that are more competitive to increase buyer power,” says Cadby.
Despite instability in the cost of inputs, overall price volatility for seismic monitoring equipment has been low. Prices for seismic monitoring equipment have been rising steadily as demand from oil and gas companies has grown in line with the domestic oil production rate. This low volatility mitigates the negative effects of price growth because it allows buyers and suppliers to properly budget for future purchases without risk of sudden price hikes or drops. Additionally, low price volatility often accompanies low vendor financial risk, which also benefits buyer power with the likelihood that the supplier will remain in business for the long term. Therefore, multiyear contracts in this market give buyers time to develop a supply relationship with vendors and allow buyers to lock in prices for improved negotiability. Major vendors include Compagnie Generale de Geophysique, ION Geophysical, Amphenol Corporation and Geospace Technologies Corporation. For more information, visit IBISWorld’s Seismic Monitoring Equipment procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of seismic equipment, which can detect geophysical movements and characteristics. Such equipment is used for oil and gas exploration, scientific research, ongoing monitoring and marine-based research. Types of seismic equipment include analog sensors, geophones, impulse sources and magnetic systems, as well as positioning equipment, seismographs and accelerographs. This report does not include seismic equipment parts, acoustic vibration equipment or rudimentary classroom seismic demonstration equipment.
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
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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.