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hw#5 - suppress the probability of the industries from...

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6. The four major factors that affect suppliers’ ability to exert pressure on buyers and suppress the probability of the industries to which they sell are: (a).supplier concentration: The supplier has an advantage when there are only a few suppliers to provide a critical product to a large number of buyers. (b).switching costs: switching costs are the fixed costs that buyers encounter when switching or changing from supplier to another. If switching costs are high, a buyer will be less likely to switch suppliers. (c). Attractiveness of substitutes: supplier power is enhanced if there are no attractive substitutes for the products or services the supplier offers. (d).Threat of forward integration: the power of supplier is enhanced if there is a credible possibility that the supplier might enter the buyer’s industry. 7. The four major factors that affect buyer’s ability to exert pressure on suppliers and
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Unformatted text preview: suppress the probability of the industries from which they buy materials are: (a).buyer group concentration: if the buyers are concentrated, meaning that there are only a few large buyers, and they buy from a large number of suppliers, they can pressure the suppliers to lower costs. (b).buyer’s costs: the greater the importance of an item is to a buyer, the more sensitive the buyer will be to the price it pays. (c). Degree of standardization of supplier’s products: the degree to which a supplier’s product differs from its competitors’ affects the buyers’ bargaining power. For standard or undifferentiated product, the buyer can play one supplier against another until it gets the best combination of features (price and service). (d).Threat of backward integration: the power of buyer is enhanced if there is a credible threat that the buyer might enter the supplier’s industry....
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