Bargaining power
Bargaining power is the ability of a party to influence the terms of an exchange or negotiation. It depends on matters such as alternatives, dependence, switching costs, information and the importance of the relationship. A large party is not automatically powerful in every negotiation, and power can change as circumstances change.
Worked example
A buyer dependent on a unique component has limited leverage over its sole qualified supplier. Developing a credible alternative can improve the buyer’s negotiating position.
Common mistake
Equating bargaining power with size alone or assuming a party’s negotiating strength establishes that every demand it makes is fair.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Direct | September 2026–June 2027 |
| ACCA | SBL | Direct | September 2026–June 2027 |
| FIA | FBT | Direct | September 2026–June 2027 |