The bargaining
power refers to both a seller (supplier) and a buyer (recipient,
customer). The sellers bargaining power increases
when the supplier market is cornered by few
companies. The limited number of suppliers reduces the
competition among them and it gives them greater bargaining
power. The suppliers bargaining power can be
strengthened when the supplier market is more concentrated
than the buyers market. The bargaining power
also increases when the supplier is a key or strategic
partner (important for the buyer’s activity) and their industrial
goods are crucial for the buyer’s production
process. The more the production and production costs
of buyer’s fi nished goods depend on one industrial
good, the greater bargaining power of the supplier is. In
this kind of situation the buyer has not, or has very limited,
possibilities of purchasing goods from other suppliers.
There is very similar situation when the buyer is
not attractive enough for the seller or when the sellersupplier
has many others more serious or more prestigious and profi table buyers, then the buyers bargaining
power increases accordingly