A firm's bargaining power over suppliers is generally strongest when:
Correct answer: C. Only a few suppliers control an essential input
- A. Many suppliers offer identical materials
- B. The firm can switch suppliers at no cost
- C. Only a few suppliers control an essential input
- D. The supplier can easily sell to every customer directly
Explanation
A small number of suppliers controlling an essential input can make the buyer dependent on them. This dependence gives suppliers stronger bargaining power over price and terms.
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About The Business Environment
Business environment includes the internal factors and external forces that affect business decisions, performance and survival. It covers customers, competitors, suppliers, government, technology, economic conditions, society, law and ecology, including the distinction between the microenvironment and the wider PESTLE environment.
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