Question

When a company is readily able to switch to another company in order to get the raw materials it needs to make products, Porter would say that the bargaining power of ______ goes down.

Answer 1

Answer:

Bargaining power of raw material suppliers goes down.

Explanation:

Companies, buyers of raw materials in this case :- are readily able to switch to other company for raw materials. This implies that buyer companies have many substitutable sellers for raw materials. This makes their demand highly elastic i.e highly respondent to price, moves from dearer to cheaper suppliers alternatives. So, raw material sellers / suppliers have low bargaining power in this case, as they are in easily substitutable position & their buyers have elastic demand.