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Sir in relation to Assessing the industry attractiveness I’ve used porters 5 force model . in the case of the power of buyers, my answer was that
The buyers of retails store are mostly fragmented
The price of the product is fixed at one dollar in all the suppliers(stores) so price sensitivity would not be an issue as the price is the same (target price fixed)
Customers mainly look at convenience rather than price as this store are in all parts of the town unlike the supermarkets and prices are fixed
Thus I don’t see any reason why the customers would actually bargain for the products hence bargaining power of the customers is irrelaventIve reviewed the answer and didnt understand what they meant there
Is my reasoning right sir or have i got it wrongThey actually say in the answers that customers are price sensitive
Oh sorry sir I forgot to mention sir its there in the Kaplan exam kit strategy part if the question is not in a bpp kit it would be available on the site mentioned below, basically the P3 paper June 2013 attempt question 2
https://www.chinaacc.com/upload/html/2013/07/01/lixingcun14622a2ae3934c32bcb87fad62d3f210.pdf
I think the problem with the answer is that it is not always clear what’s meant by ‘buyer’. Nesta is a buyer of products from its suppliers and is in a strong position to bargain with them as the items are common and undifferentiated.
However, Nesta also has buyers (the people who come into its shops). Thay won’t bargain on price as all products are sold for $1, however, because the products are ordinary and there are competitors, if Nesta does not provide reasonable quality, handy opening hours, pleasant staff etc, it would be easy for members of the public to start buying elsewhere as their switching costs are very low..
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