Service prices have increased due to rebounding activity in the industrial and construction sectors
Los Angeles, CA (PRWEB) January 29, 2015
Seismic and geophysical services have a buyer power score of 3.4 out of 5, signifying that buyers have moderate leverage in the negotiation process. According to IBISWorld research analyst Anna Son, “Buyer power is positively influenced by the prevailing trend of slow price growth and negatively impacted by high levels of market share concentration, specialization and switching costs.”
Recent price trends have largely been favorable for buyers, primarily due to the declining or stagnating costs of major inputs, such as crude oil and wages, respectively. The rise of domestic oil and natural gas production, however, has boosted demand for seismic and geophysical services, thus minimizing the impact of lower operating costs. As a result, prices for seismic and geophysical services have slowly risen during the three years to 2014, says Son.
Over the next three years, buyers should anticipate slower price growth as purchase costs decrease further, thus improving buyer power. Although, demand will remain strong, purchase items, such as fuel used for transportation to project sites and operate machinery, will limit price growth in the seismic and geophysical service market through 2017. Meanwhile, the high level of specialization, market share concentration and switching costs limit negotiating power. High specialization stems from the fact that each project or program has unique needs and every contract is customized for the buyer's specific requirements and investigation site conditions. As a result, buyers are limited to one service provider for the duration of the contract. Suppliers include Baker Hughes Inc., Halliburton Company, China Oilfield Services Limited, Schlumberger Ltd. and Weatherford International Ltd. Switching costs are also significant and prevent buyers from changing suppliers even when their needs are not being fully satisfied. Limited price competition and supplier choices further reduce buyer power. For more information, visit IBISWorld’s Seismic and Geophysical 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 seismic and geophysical services, which can vary from well velocity survey services to borehole seismic land acquisition services. Service providers gather, interpret and map geophysical data. Suppliers often specialize in locating and measuring the extent of subsurface resources, such as oil, gas, and minerals, but may also conduct surveys for engineering purposes. Service providers also use a variety of surveying techniques depending on the purpose of the survey, including magnetic, gravity, seismic, or electrical and electromagnetic surveys.
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.