GK
BUSINESS MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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pertains to how much power a supplier has as far as increasing the prices of supplies and merchandise a company purchases from them
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helps companies to analyze their industry and determine their level of competitiveness
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negative or unfavorable external factors that affect businesses and their level of competitiveness
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a specific group of consumers to whom a company aims the selling of its products or services
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a favorable, external factor companies cannot control
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Detailed explanation-1: -What is Supplier Power? Suppliers have the power to influence price, as well as the availability of resources/inputs. Suppliers are most powerful when companies are dependent on them and cannot switch to other suppliers because of higher costs or lack of alternative sources.
Detailed explanation-2: -When doing an analysis of supplier power in an industry, low supplier power creates a more attractive industry and increases profit potential, as buyers are not constrained by suppliers. High supplier power creates a less attractive industry and decreases profit potential, as buyers rely more heavily on suppliers.
Detailed explanation-3: -Supplier power is high if the buyer is not price sensitive and uneducated regarding the product. If the supplier’s product is highly differentiated, then supplier bargaining power is high. The bargaining power of suppliers is high if the buyer does not represent a large portion of the supplier’s sales.
Detailed explanation-4: -In Porter’s Five Forces, supplier power is the degree of control a provider of goods or services can exert on its buyers. Supplier power is linked to the ability of suppliers to increase prices, decrease quality, or limit the number of products they will sell.