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Supplier & Buyer Power in Breakfast Cereal Industry

In the breakfast cereal industry, companies such as Kellogg, Quaker Oats, and General mills sell their cereals to grocery chains, discount stores and independent grocers. Chain retailers, such as Wal-Mart, Kroger, Safeway, Costco, and Albertson's, purchase the majority of breakfast cereal. Of these, Wal-Mart accounts for more than 10 percent of cereal sales in the U.S. What does this say about the cereal industry?

a. Supplier power is strong in this industry
b. Buyer power is low in this industry
c. Supplier power is low in this industry
d. Buyer power is strong in the industry

Solution Summary

The solution provides excellent answer to the problem below about supplier and buyer power.