The strength of the bargaining power of suppliers and customers depends on the switching costs and product differentiation.

Question

Quizplus · Accepted Answer

Switching costs refer to the cost incurred by customers to switch from one supplier to another while product differentiation refers to how different a company's product or service is from their competitors. The higher the switching costs and the lower the product differentiation, the stronger the bargaining power of suppliers and customers will be. Therefore, the statement is true.

The Strength of the Bargaining Power of Suppliers and Customers