In light of this buyers have limited bargaining power within the industries

In light of this buyers have limited bargaining power

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In light of this, buyers have limited bargaining power within the industries. Moreover, differentiation of products within the marketplace is high, which implies that buyers are incapable of finding alternative companies offering similar products and services (Merchant 300). With inability to switch among different organizations, buyers have insignificant bargaining powers in the market. A large number of consumers in the industries have low
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Surname 15 income. As such, they pressure most organizations to sell various products at low prices; however, most firms provide their products at similar prices across all outlets making it difficult for buyers to purchase at their own prices. In the trucking and construction industries, buyers often purchase quality products with most making frequent purchases. The implication of such behavior is that most consumers are not sensitive to changing market prices. Therefore, they are unable to have any real bargaining power to influence price reductions in the industries (Mehmood and Hilman 517). Nonetheless, the industries lack any significant threats from the buyers to integrate backwards, which means that organizations within the industries have more bargaining power compared to prospective buyers. How Iknoor can tackle Buyers’ Bargaining Power A strong bargaining power from the company’s consumers can significantly affect Iknoor’s sales volume and profit margins. Therefore, the company needs to embark on differentiation and innovation to appeal to more purchasers. Quality and product differentiation are vital aspects within the trucking and construction industries and by focusing on these elements, Iknoor can gain more customer following. Besides, Iknoor can capitalize on buyers’ low bargaining power to increase its market range and share (Hill and Jones 21). The organization can do this using advertising and marketing initiatives focused on fostering brand loyalty. Additionally, Iknoor can utilize its economies of scale to develop cost advantages and market its services affordably to buyers within the low-income segment of the industries. With this strategy, the company will attract more customers leading to carving of a large market share. Threat of Substitutes (Low) The availability of alternative products is a major threat to any organization regardless of the industry it operates, its pricing, and product quality. The Ontarian and Canadian construction
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Surname 16 and trucking industries provide nearly universal services and products. In this regard, there are few substitutes relating to services and products produced by most players within these industries. Besides, low-profit earning players produce the few substitutes in the market; therefore, the industries lack ceilings with respect to maximum profits that companies can earn in the industries (Hill 34). All of these aspects combine to make the threat of alternative products significant in the market where Iknoor conducts business. However, despite the availability of few substitutes, most of them provide high quality services and products but are expensive. By
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  • Fall '15
  • Mr. Njoroge

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