Bargaining power of suppliers

(Redirected from Supplier power)

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

  • level of supplier concentration in the sector (less suppliers more power)
  • dependence of quality of the product on quality of the supplies (more quality products needed increases supplier's power)
  • uniqueness of the product supplied (eg. due to patent restrictions)
  • cost of switching suppliers and possibility to do it
  • share of the supplier in the creation of producers' profit in the industry
  • possibility of the supplier to start production of the final product (supplier change to competitor)
  • relative intensity of competition in the supplier industry.


References

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