The bargaining power of suppliers is enhanced under the following market condition:
A)no threat of forward integration.
B)low differentiation of the supplier products.
C)greater availability of substitute products.
D)dominance by a few suppliers.

Question

Quizplus · Accepted Answer

A supplier group will be powerful when the supplier group is dominated by a few companies and is more concentrated (few firms dominate the industry) than the industry it sells to; the supplier group is not obliged to contend with substitute products for sale to the industry; the supplier group products are differentiated or it has built up switching costs for the buyer; or the supplier group poses a credible threat of forward integration.

The Bargaining Power of Suppliers Is Enhanced Under the Following