In the context of Porter's five forces model, customer's bargaining power refers to
A) a customer's ability to create barriers to entry.
B) a customer's ability to alter his/her value chain.
C) a customer's ability to integrate IT.
D) a customer's ability to negotiate better prices.
E) a customer's ability to create substitutes.

Question

Quizplus · Accepted Answer

Customer bargaining power refers to the ability of customers to negotiate better prices or incentives from the company. This can occur when customers have a high level of information about the product or service they are purchasing, have many alternatives to choose from, or make large purchases. The other options listed (creating barriers to entry, altering value chain, integrating IT, creating substitutes) are not related to customer bargaining power.

In the Context of Porter's Five Forces Model, Customer's Bargaining