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Bargaining power of suppliers

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBL Exams › Bargaining power of suppliers

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by AvatarKen Garrett.
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  • May 3, 2017 at 1:12 pm #384711
    Avatarsyfar42
    Member
    • Topics: 61
    • Replies: 22
    • ☆☆

    Does the answer to bargaining power of supplies should always be either high or low?

    I mean, what if company has suppliers for different types of materials? In that situation, the bargaining power would depend on which material you have a supplier of right?
    For example, suppliers like Boeing and Airbus have high bargaining power against an airline company in terms of supply of aircrafts.

    However, the airline company can have a high bargaining power against suppliers of maybe food items or flight crew staff?

    May 4, 2017 at 6:39 am #384793
    AvatarKen Garrett
    Keymaster
    • Topics: 10
    • Replies: 10653
    • ☆☆☆☆☆

    Yes. Each supplier has to be treated on its merits. However, some supplirs cab be so powerful that they dominate the position. For example, if a monopoly supplier of a vital component doubled its prices the relative flexibility of other suppliers might be irrelevant.

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