In which one of the following instances is supplier bargaining power and leverage not weakened?
A)When industry members pose a credible threat of backward integration into the business of suppliers
B)When sales to a strategic partner constitute a big percentage of their total sales
C)When the items purchased from suppliers are in short supply
D)When the buying firms purchase in large quantities and thus are important customers of the suppliers
E)When the cost of switching from one supplier to another is low

Question

Quizplus · Accepted Answer

When industry members pose a credible threat of backward integration into the business of suppliers, supplier bargaining power and leverage are weakened. This is because suppliers are less likely to be able to raise prices or reduce quality if they know that their customers can easily switch to producing the same goods or services themselves.

In Which One of the Following Instances Is Supplier Bargaining