This is how much pressure customers can place on a business. If one customer has a large enough impact to affect a company’s margins and volumes, then they hold substantial power. Here are a few reasons that customers might have power
If the industry includes firms which are considerably larger than their customers, sheer weight of resources may put them in the dominant position. The opposite may apply when the buying organizations are the larger.
Bargaining strength may lie with the least dependent of the two parties. This is a composite of the number of industry firms contrasted with the number of buying firms, and the importance of the product to the profits of each party.
Profitability of the buying industry
Where buyers are unprofitable or have low profits there is likely to be stronger resistance against price increases. This resistance will increase when the buyer is facing an elastic demand curve, and cannot easily pass on his or her extra costs.
Experience of buyers
Buyers purchasing from a mature industry are likely to have more experience than those dealing with a new one. Thus, the more mature the industry, the weaker its bargaining position may become .Where the buying industry is also mature, there may be a tendency for the degree of product differentiation to fall, making it more difficult for the industry to sustain high margins.
Threat of integration
The industry firm that patently has the capability and strength to integrate into its buying industry possesses a key bargaining point. If the buying industry thwarts its profit aims, it has the potential to remove the blockage.
Strategic Management Related Interview Questions
|Marketing Strategy Interview Questions||Marketing Management Interview Questions|
|Strategic Brand Management Interview Questions||Corporate Governance and Business Ethics Interview Questions|
|Strategic Planning for Project Management Interview Questions||Quality Management Interview Questions|
|Corporate Social Responsibility Interview Questions||Business Development Interview Questions|
|Corporate Communication Interview Questions||Business Development Manager Interview Questions|
Strategic Management Related Practice Tests
|Marketing Strategy Practice Tests||Marketing Management Practice Tests|
|Corporate Governance and Business Ethics Practice Tests||Quality Management Practice Tests|
|Corporate Social Responsibility Practice Tests||Business Development Practice Tests|
|Corporate Communication Practice Tests|
Strategic Management Tutorial
From Planning To Strategic Management And Beyond
Strategic Management: Success Or Failure?
A Look At The Total Process
The Challenge Of The Future
The Environment: Assumptions In Planning
Techniques For Assessing The Environment
Business Philosophy (ethics And Morality) And Strategic Management
The Corporate Appraisal – Assessing Strengths And Weaknesses
Analysing The Industry And Competitors
Analysing The Uk Management Development And Training Industry: A Case History
The Search For Shareholder Value
Vision And Objectives
Strategic Portfolio Analysis
Portfolio Analysis In Practice
Strategic Planning – A Second Look At The Basic Options
Multinational And Global Strategy
Technology And Manufacturing
Strategic Planning For Human Resources
Relating To The External Environment
Evaluating A Business Plan
Project Planning And Appraisal
From Plans To Actions
Management Of Change
Introducing Strategic Management
Why Planning Sometimes Fails
Strategic Management To Strategic Change?
All rights reserved © 2018 Wisdom IT Services India Pvt. Ltd
Wisdomjobs.com is one of the best job search sites in India.