Prices have risen slowly as businesses have increasingly been able to afford consultancy services in the improving economy
Los Angeles, CA (PRWEB) March 12, 2015
Procurement consulting services have a buyer power score of 3.2 out of 5, indicating shared negotiating power between suppliers and buyers. According to IBISWorld analyst Michelle Hovanetz, the stable nature of the market, as evidenced by low vendor financial risk, low supply chain risk and low price volatility has bolstered buyer power in the three years to 2014. Rising prices, on the other hand, have negatively impacted buyers in recent years.
Prices have risen consistently from 2011 to 2014 due to demand growth in the market. As the business environment has improved following the recession, a rising number of businesses and growing corporate profit have bolstered growth in consulting services, continues Hovanetz. Increased industrial production has also drawn attention to the importance of procurement functions, driving demand for procurement consulting. Price growth has harmed buyer power in recent years because buyers are pressured to make purchasing decisions sooner rather than later to avoid further growth. The lack of viable substitutes and moderate specialization have also hurt buyer power. Services are specialized to each individual buyer, making suppliers difficult to compare. In some cases, specialization reduces the number of viable suppliers buyers can choose from. For example, a buyer in search of various types of consulting across their organization will be limited to larger consultancy firms, or they will have to contract with multiple specialized suppliers to cover each division.
Fortunately for buyers, there are many suppliers in the market to choose from, including International Business Machines Corporation, Accenture PLC and TCS BPO. In addition, most suppliers typically have low risk. Suppliers require very few inputs to provide service, none of which are high risk. Instead, vendors rely primarily on the availability of talented consultants. Additionally, widespread demand growth paired with rising profit margins have helped to enhance suppliers' financial health, ensuring the continuity of service to buyers. For more information, visit IBISWorld’s Procurement Consulting Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of procurement consulting services. Vendors supplement internal procurement departments, assisting buyers with the process of obtaining materials, suppliers and contracts according to the terms of the buyer. Procurement consultants leverage supplier relationships and the latest procurement technologies to improve spending coverage and reduce costs for goods and services. This report excludes operations management consulting services and the purchasing of procurement software.
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.