Bargaining power of buyers

Bargaining power of buyers (customers) is one of five part of Five forces analysis and depends on:

  • degree of concentration of the buyer sector,
  • dependence of the quality of the final product on the quality of the buyers results
  • uniqueness of product
  • large share of the supplier in creating the buyer's profit
  • ease and cost of changing the supplier
  • possibility of the buyer taking the production of the final product
  • focus of competitive struggle in the buyers sector.
  • buyers can exert pressure on lowering prices
  • high power of customers can increase competition in the sector
  • power of buyers depends on the quantity and quality of information about the market

References

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