- This topic has 1 reply, 2 voices, and was last updated 11 years ago by
.
- Posts
hello sir gromit,
i have problem in this terms, bargaining power of suppliers / customers.
we look at it from which perspective?
for example, My company is a small company and very dependent on the suppliers’ supply of raw material, so this means that the bargaining power of suppliers is high?and my company a big company selling products which are undifferentiated, with no long terms contract with customers, so the bargaining power of customer is high?
is this correct, i have problem determining whether high or low, because i’m confused to look at it from whose point of view, whether my company of the supplier/customer.
You are trying to use 5 forces to work out the strategic position of your company – so look at it from your viewpoint.
So you first example is fine: small company and high bargaining power of suppliers will place you under pressure
Your second example is also fine. Because your product is undifferentiated (and therefore presumably lots of competitors) your customers are quite powerful as they can threaten to simply switch to another supplier.
- You must be logged in to reply to this topic.