Asked by William Commins on Sep 24, 2024
Verified
Supplier power tends to be lower when
A) Suppliers are less concentrated
B) There are low costs to switching between suppliers
C) Both A&B
D) None of the above
Suppliers Concentrated
A market condition where a small number of suppliers provide a large portion of products or services.
Switching Costs
Expenses that a consumer or company incurs as a result of changing from one product, service, supplier, or system to another.
Supplier Power
The level of control and influence that suppliers have over the price and availability of their products or services in the market.
- Perceive the impact that the power dynamics between suppliers and buyers have on a firm's strategy formulation.
- Learn strategies for managing supplier power and decreasing supplier influences.
Verified Answer
SL
Shannon Lytes2 days ago
Final Answer :
C
Explanation :
Supplier power tends to be lower when suppliers are less concentrated, meaning there are more of them, which increases competition among suppliers. Additionally, when there are low costs to switching between suppliers, it's easier for companies to change suppliers if they find better prices or services, further reducing supplier power. Both of these conditions make it harder for suppliers to exert control over companies, thus lowering their power.
Learning Objectives
- Perceive the impact that the power dynamics between suppliers and buyers have on a firm's strategy formulation.
- Learn strategies for managing supplier power and decreasing supplier influences.