Growing industrial production and the increasing regulation of carbon emissions have boosted demand and incentivized suppliers to raise prices
Los Angeles, CA (PRWEB) April 20, 2015
Carbon management services have a buyer power score of 2.5 out of 5, reflecting a moderate level of negotiating power for buyers. “Demand for carbon management services has been growing during the three years to 2014 as the economy has recovered, which has spurred businesses to make more products that emit carbon. The industrial production index and US energy production have also been rising, contributing to higher greenhouse gas output and encouraging more businesses to seek out carbon management services to reduce carbon emissions. Furthermore, growing regulation concerning carbon emissions has been forcing more businesses to monitor output and develop plans for future control,” according to IBISWorld business research analyst Daniel Krohn. These factors have been driving demand for carbon management services and placing upward pressure on service prices. Fortunately for buyers, although prices have been increasing, they have been doing so at a steady rate, allowing buyers to plan for future expenditures.
Another factor that limits buyer power is the high level of product specialization, which makes it harder for buyers to compare services across suppliers. Also, because carbon management services require a high level of customization and skilled employees, it is difficult for buyers to switch to other suppliers or hire in-house employees to develop carbon reduction plans. Furthermore, there are no direct substitutes for carbon management services. Testing for carbon requires special instruments, so buyers have little choice but to source services from the market's suppliers, which reduces their ability to leverage the availability of alternatives during negotiations with suppliers.
There are, however, some factors that help buyers in the purchasing process. “The low level of market share concentration promotes price-based competition among suppliers, allowing buyers to leverage more options during the negotiation process,” Krohn says. Some of this market’s most notable suppliers include Accenture, McKinsey Company, Hewlett-Packard Development Company and EnerNoc. Also, because wages, which suppliers can control to some extent, are the largest cost for suppliers and downstream demand for services comes from a diverse range of buying segments, buyers do not face substantial supply chain risk; this further aids buyer power. For more information, visit IBISWorld’s Carbon Management Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of carbon management services. Suppliers of these services test and monitor carbon emissions from buyers’ facilities to help mitigate their negative impact on the environment. Using gathered information regarding the buyer’s carbon footprint, suppliers can develop plans to help reduce carbon emissions. These services can be used to meet Environmental Protection Agency standards or to achieve a greater level of sustainability by reducing pollution levels.
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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