Notes #6 - Buyers have more power when Few buyers with many...

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Buyers have more power when: Few buyers with many suppliers Buyer purchases in large volume The supplying industry is made up of a large number of small operators Buyers product is not differentiated and can be replaced by substitutes Buyer’s cost of switching to a competitors’ product is low and simply The supplying industry operates with high fixed costs Buyers have low margins and are price sensitive Buyer knows about the suppliers production costs of the product Threat of New Entrants New entrants can raise the level of competition and market environment, while
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Unformatted text preview: also reducing its attractiveness Threat of entry is high when: Capital requirements to start the business are low Customers can easily switch (low switching cost) Your product is not differentiated Barriers created by the Government are low No protection for patents, licensing, trademarks or other proprietary knowledge Little brand franchising Little to no brand loyalty Threat of Substitutes...
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