Suppliers are powerful when no satisfactory substitutes are available, the selling industry is relatively more concentrated than the purchasing industry, and switching costs are high. True or false?

Question

Business

Maritza Dalton

5 January, 02:19

Suppliers are powerful when no satisfactory substitutes are available, the selling industry is relatively more concentrated than the purchasing industry, and switching costs are high. True or false?

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Answers (1)

Know the Answer?

Jakob · Answer 1

The statement is: True.

Explanation:

According to Harvard Business Professor Michael Porter (born in 1947), Suppliers Power is one of the five (5) Forces driving markets. If suppliers collide compared to buyers they will have more bargaining power while setting prices. As well, if the goods provided by suppliers are highly differentiated, suppliers' power will be higher or if changing from one supplier to another represents incurring in higher costs for producers.