BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The Bargaining Power of Buyers, one of the forces in Porter’s Five Forces Industry Analysis framework, refers to the pressure that customers/consumers can put on businesses to get them to provide higher quality products, better customer service, and/or lower prices.

Detailed explanation-2: -If buyers are more concentrated than sellers – if there are few buyers and many sellers – then buyer power is high. Whereas, if switching costs – the cost of switching from one seller’s product to another seller’s product – are low, the bargain power of buyers is high.

Detailed explanation-3: -Bargaining power of customers also depends on the flexibility of bargaining approach. For example a customer wants to buy a product only when the supplier would give discount but the supplier has a fixed price tag for that product and is not ready to provide any sort of discounts.

Detailed explanation-4: -The bargaining power of suppliers is one of the five forces that determine the intensity of competition in an industry. The others are barriers to entry, industry rivalry, the threat of substitutes and the bargaining power of buyers.