Bargaining Power of Customers � HIGH
Logistics industry is highly competitive and there are many companies that offer similar products. Customer has the power to decide if to pay high or low price, to decide between cheaper or more expensive company. And also customer has the power to walk away and make a deal with competitor. Loyalty increases when customers get better value or benefits for the same price. Therefore it is important to build customer satisfaction, build partnerships or provide discounts. Basically, any reduction of the price that customer "negotiates� means lower profit for the company.
Customers are very sensitive to price and are willing to switch to the competitor very easily if the service, company offers, does not differentiate from any other service that can be purchased in the market. Price is the magic word that matters. Therefore it is important for the company to differentiate and offer something more. If it cannot be price then for example it can be company's attitude towards environment and using climate-neutral transportation or products.
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