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Strategic Management: Powerful Suppliers and Powerful Buyers

1. Compare and contrast the factors that determine powerful suppliers and powerful buyers. As a manager, would you least prefer having to deal with the loss of profits brought on by powerful suppliers or powerful buyers? Explain.

I need help with finding information and answering the two questions. Thank you.

Solution Preview

Let's take a closer look at the two questions, which you can draw on for your final copy.

1. Compare and contrast the factors that determine powerful suppliers and powerful buyers.

This question is straightforward. It is asking you to compare and contrast the factors that determine powerful suppliers and powerful buyers.

Let's take a closer look.

The power of the buyer is the impact that the buyer has on the industry, when in theory; there are many suppliers with only one buyer. Under such market conditions, the buyer sets the price. Buyer power includes such things as bargaining leverage, buyer volume, buyer information, brand identity, price sensitivity, threat of backward integration, product differentiation, and buyer concentration versus industry, substitutes (products from other industries) available and buyer's incentives. Conversely, supplier's power includes supplier concentration and importance of volume to the supplier, differentiation of inputs, impact of inputs on cost or differentiation, switching costs of firms in the industry, presence of substitute inputs, threat of forward integration and cost relative to ...

Solution Summary

This solution compares and contrasts the factors that determine powerful suppliers and powerful buyers. By example, it also examines a situation that a manager would least prefer having to deal with the loss of profits brought on by powerful suppliers or powerful buyers.

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