COMPETITIVE FORCE OF SUPPLIERS
COMPETITIVE FORCE OF SUPPLIERS
- Suppliers are a strong competitive force when
- Item makes up large portion of costs of product, is crucial to production process, and/or significantly affects product quality
- It is costly for buyers to switch suppliers
- They have good reputations & growing demand for their product
- They can supply a component cheaper than industry members can make it themselves
- They do not have to contend with substitutes
- Buying firms are not important customers