The suppliers to fast food industry have very little leverage
and bargaining power for numerous reasons:
1. Their customers are large and buy in bulk
2. The item supplied are generally commodity items (paper products,
plastic products, chicken, hamburger patties, etc., are fairly
standard items)
3. The items being purchased are offered by many different
suppliers and can, in many instances, be sourced from several
different suppliers (based on who offers the best prices, delivery,
and other terms and conditions)
4. Backward integration by fast food chains is sometimes an option.
5. Purchaser switching costs tend to be
(5) Threats of new entrants