Bargaining Power of Buyers Just as suppliers to an industry can be a source of
pressure, buyers also have the potential to can exert significant power over a business,
making it less attractive. When the number of customers is small and the cost of switching
to competitors’ products is low, buyers’ influence on companies is high. Famous for
offering its customers low prices, Wal-Mart, the largest company in the world, is also well
known for applying relentless pressure to its 21,000 suppliers for price concessions, which
it almost always manages to get.1 Generally, an industry is more attractive when the
Bargaining Power of Buyers Just as suppliers to an industry can be a source of
pressure, buyers also have the potential to can exert significant power over a business,
making it less attractive. When the number of customers is small and the cost of switching
to competitors’ products is low, buyers’ influence on companies is high. Famous for
offering its customers low prices, Wal-Mart, the largest company in the world, is also well
known for applying relentless pressure to its 21,000 suppliers for price concessions, which
it almost always manages to get.1 Generally, an industry is more attractive when the
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