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Hi guys
Hope the studying is going well
Please help – Can someone explain when the bargaining power of customers and bargaining power of suppliers is low and high.
Much appreciated
Regards
Anisa
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Hi,
Bargaining power of customers – powerful customers are preventing companies from putting prices up; Customers have High power if there are low switching costs; Low power if there are high switching costs and few suppliers;
Bargaining power of suppliers – Powerful suppliers might put their prices up or impose other changes on the company; Suppliers have High power if there is limited number of suppliers and high switching costs; Low power if there are lots of suppliers and switching cost is low.*Low Switching cost mean that customer may easily chance their supplier.
Hope this helps.
A high switching cost means that it is difficult for a customer to change supplier.
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