Switchgear Systems Procurement Category Market Research Report from IBISWorld has Been Updated

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Switchgear systems have a buyer power score of 2.6 out of 5, which indicates moderate negotiation leverage for buyers due to a combination of positive and negative factors, including low-cost overseas suppliers, slow price growth and high product specialization. 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 Switchgear Systems in its growing collection of procurement category market research reports.

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The average price for switchgear systems has been increasing during the past three years; however, falling input costs and high import competition have kept price growth in check

Switchgear systems have a buyer power score of 2.6 out of 5, which indicates a shared power balance between buyers and suppliers when negotiating supply agreements. “Factors benefiting buyers include slow price growth and a large selection of suppliers from which to choose, including low-cost suppliers overseas. The main disadvantages for buyers are a high level of product specialization, high switching costs and a lack of viable substitute products,” according to IBISWorld business research analyst Sean Windle.

Although the average price for switchgear systems has been rising during the past three years, price growth has been slow. The main input materials used to manufacture switchgear systems, such as steel, aluminum and copper, have all exhibited steep price declines. Falling input prices have lowered production costs for suppliers, which has prevented product prices from increasing significantly, even as demand from construction and industrial industries accelerate. Strong import competition has also tempered price growth. “Low-cost manufacturing suppliers in China and Mexico, which together account for about half of all switchgear systems imported into the United States, can produce comparable products at a fraction of the cost of US suppliers,” Windle says. These cost savings are subsequently passed down to buyers in the form of lower prices. In an effort to remain competitive, US suppliers are forced to keep their prices competitive. Top suppliers in this market include Eaton Corporation, General Electric Company, Emerson Electric and ABB.

Buyer power is limited by high product specialization, which contributes to longer lead times and high switching costs. Buyers must work carefully with suppliers to select the right switchgear system for their operations, which means evaluating their power generation needs, current electrical infrastructure and operational timeline. As a result, switching suppliers midway through the purchasing process can require some or all of this work to be repeated for the new supplier. High product specialization also contributes to the market's moderate level of concentration, which has a mixed effect on buyer power. Although large-scale, multinational manufacturers have a dominating presence in the market, the majority of suppliers are small- and medium-sized distributors, which gives plenty of supplier choices. For more information, visit IBISWorld’s Switchgear Systems procurement category market research report page.

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IBISWorld Procurement Report Key Topics

This report is intended to assist buyers of switchgear systems. A switchgear system controls the flow of electricity to various systems and circuits in a facility or area. These systems can also isolate circuits to prevent damage in case of electrical faults. Switchgear systems are made of many electronic components such as switches, circuit breakers and fuses. Suppliers include manufacturers and resellers that have working relationships with manufacturers to sell their products and provide applicable services.

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
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
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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