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five force model

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA BT – FIA FBT › five force model

  • This topic has 1 reply, 2 voices, and was last updated 11 months ago by Ken Garrett.
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  • October 18, 2022 at 6:02 am #669132
    Robinyx
    Participant
    • Topics: 10
    • Replies: 0
    • ☆

    Dear tutor,

    Please kindly explain the below sentence from the Kaplan textbook:

    power of buyers: power greatest where the threat of backwards integration.
    power of suppliers: power greatest where the possibility of integrating forward

    What is the threat of backwards integration?
    What is the possibility of integrating forward?

    Thank you very much.

    regards,

    Elaine

    October 24, 2022 at 1:24 pm #669825
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10333
    • ☆☆☆☆☆

    Backwards integration is where you take over or set up a supplier of the components you currently buy in. So if a buyer threatens to stop buying from you and sets up their own component manufacturer, you will be a bit worried.

    Forwards integration for a manufacturer, is when it sets up its own retail distribution. If a supplier threatened to do that you, your own sales would be threatened.

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