Question

The bargaining leverage of suppliers is greater when: A. only a small number of suppliers exist and when it is difficult for industry members to switch to attractive substitutes. B. industry members incur low costs in switching their purchases from one supplier to another. C. industry members purchase in large quantities and thus are important customers of the suppliers. D. it makes good economic sense for industry members to vertically integrate backward. E. the supplier industry is composed of a large number of relatively small suppliers.

Answer 1

Answer:

A.)only a small number of suppliers exist and when it is difficult for industry members to switch to attractive substitutes.

Explanation:

The Bargaining leverage of Suppliers, can be regarded as one out of the forces described in Porter's Five Forces of framework, it can be defined as the pressure that can be put on companies by suppliers through raising their prices as well as reduction in availability of their products. Even quality lowering. It should be noted that The bargaining leverage of suppliers is greater when only a small number of suppliers exist and when it is difficult for industry members to switch to attractive substitutes.