BACHELOR OF BUSINESS ADMINISTRATION

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BUSINESS ADMINISTRATION

STRATEGIC MANAGEMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
When the product is an important input to the firm’s business or when such inputs are important to the success of a firm’s manufacturing process or product quality, the bargaining power of suppliers is low.
A
true
B
false
Explanation: 

Detailed explanation-1: -Suppliers provide inputs that the firms in an industry need to create the goods and services that they in turn sell to their buyers. A variety of supplies are important to companies, including raw materials, financial resources, and labor (Figure 3.21 “Suppliers”).

Detailed explanation-2: -Answer and Explanation: The correct option is (b). Supplier industry is more concentrated than the industry it sells to. Suppliers tend to gain high power in an industry when they are more concentrated than their industry counterparts.

Detailed explanation-3: -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.

Detailed explanation-4: -Determining Factors: Bargaining Power of Suppliers Number of suppliers relative to buyers. Dependence of a supplier’s sale on a particular buyer. Switching cost (switching costs of suppliers)

There is 1 question to complete.
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