Bargaining Power of Suppliers
Supplier power: the ability of resource providers to raise the prices they charge for raw materials and component parts.
How competitive the resource market is decides how much power suppliers hold. Their leverage rises when only a handful of providers exist and when moving to a different one would be costly. Concentration is usually specific to a single input rather than to the whole supply base.
Often confused with
- Bargaining Power of Buyers
- Supplier power raises what the business pays; buyer power lowers what the business can charge.
Taught in
See also
4.4.A.7 · 4.4.B.6