Bargaining power of buyers
(Redirected from Bargaining power of customers)
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
- Chae, S., & Heidhues, P. (2004). Buyers' alliances for bargaining power. Journal of Economics & Management Strategy, 13(4), 731-754.
- Porter, M. E. (1979). How competitive forces shape strategy
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