- 4. Strength of supplier power – the competitive pressures stemming from supplier- seller collaboration and bargaining.
// whether supplier- seller relationships represent a weak or strong competitive force depends on:
\ (1) whether suppliers can exercise sufficient bargaining power to influence terms and conditions of supply in their favor.
\ (2) nature and extent of supplier- seller collaboration in the industry.
// suppliers have a weak bargaining power over rivals when the items they provide are commodities available on the open market from numerous suppliers with ample capability to fill orders.
// suppliers have a weak bargaining position when there are good substitutes for the item they provide and buyers find it neither costly nor difficult to switch their purchases to the suppliers of alternative items.
// suppliers have a weak bargaining position when the company they are supplying is a major customer.
// more and more industries from long- term strategic and collaborative partnerships and close working relationships with selected suppliers in order to:
\ (1) promote just- in- time deliveries and reduced inventory and logistics cost:
\ (2) speed the availability of components:
\ (3) enhance quality if the parts and components being supplied and reduce defect rates, and.
\ (4) save other costs for both parties.
// effective supply chain partnerships on the part of one or more industry rivals can thus become a major source of competitive pressure for other rival.