Higher plastic material costs and an increase in construction and corporate profit have pushed product prices up
Los Angeles, CA (PRWEB) March 06, 2015
Intercom systems have a buyer power score of 3.5 out of 5, which indicates that buyers have a moderate level of negotiation power over suppliers. According to IBISWorld analyst Jesse Chiang, buyers benefit from low market share concentration because no single supplier controls product prices, and buyers have numerous suppliers to select from. Having more suppliers to choose from allows buyers to select a more optimal balance between price and level of service when selecting a supplier. In addition, low market share concentration encourages high competition among suppliers, which has forced them to temper potential price increases. Examples of market suppliers include W.W. Grainger Inc., Nortek Inc. and Federal Signal Corporation.
Low product specialization and low switching costs further benefit buyer power. Intercom systems are relatively commoditized; they differ minimally in terms of quality and require little specialized knowledge to manufacture or distribute. This factor further increases the number of viable suppliers that buyers can choose from, improving buyer leverage, continues Chiang. There are also low switching costs for buyers because products are commoditized and market vendors typically carry a low level of financial risk. Thus, buyers will not have to spend as much time or resources when doing research on new suppliers. Low switching costs also improve buyer power because it makes it easier for buyers to switch to a lower price operator or leverage the existing operator into lowering prices.
However, growing demand for intercom systems has had a negative effect on buyer power. Demand for intercom systems has been growing due to rising corporate profit and increasing private construction activity. Higher corporate profit allows more companies to invest in new intercom systems to improve communications, while higher private construction activity drives demand for intercom systems because new buildings often use these systems for various communications needs. Higher demand has encouraged suppliers to increase prices in the three years to 2014. Over the three years to 2017, prices are expected to continue to rise as demand remains high. To mute potential price increases, buyers can engage in contracts to maintain lower prices or can order a substantial volume of market products to seek volume-based discounts. For more information, visit IBISWorld’s Intercom Systems procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of intercom systems. Intercom systems are voice communication systems used independently from the public switched telephone network. Intercom systems are typically used as entry systems in building spaces, such as hospitals, schools, apartment buildings, warehouses or office buildings. Intercom systems allow for two-way communication. This report excludes other call management systems, such as public announcement systems used at entertainment and sporting events. This report also excludes telecom announcers, paging systems, nurse communication modules and infant or child security transmitters. Finally, this report does not include intercom system installation 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.