Are the products that the industry needs to purchase ordinary?

Are there a large number of potential input suppliers?
The greater number of suppliers of the industry’s needed inputs, the more control (the companies in) the industry will have.

  • Are there a large number of potential input suppliers?
    The greater number of suppliers of the industry’s needed inputs, the more control (the companies in) the industry will have.
  • Are the products that the industry needs to purchase ordinary?
    The companies in the industry have more control when the products needed from a supplier are not unique.
  • Do purchases of the companies in your industry represent a large portion of the supplier’s business?
    If the purchases are a relatively large portion of the supplier’s business, the companies in the industry will have more power to lower costs or improve product features.
  • Would it be difficult for suppliers to enter the industry, sell directly to customers, and become a direct competitor?
    The easier it is for suppliers to start a new business in the industry, the more likely it is to happen.
  • Is it easy to switch to substitute input products from other suppliers?
    If it is relatively easy to switch to substitute products, the companies in the industry will have more negotiating room with the suppliers.
  • Are companies in your industry well informed about the supplier’s product and market?
    If the (supplier) market is complicated or hard to understand, the companies in the industry have less bargaining power with their suppliers.

The companies in the industry have more control when the products needed from a supplier are not unique.
Do purchases of the companies in your industry represent a large portion of the supplier’s business?
If the purchases are a relatively large portion of the supplier’s business, the companies in the industry will have more power to lower costs or improve product features.
Would it be difficult for suppliers to enter the industry, sell directly to customers, and become a direct competitor?
The easier it is for suppliers to start a new business in the industry, the more likely it is to happen.
Is it easy to switch to substitute input products from other suppliers?
If it is relatively easy to switch to substitute products, the companies in the industry will have more negotiating room with the suppliers.
Are companies in your industry well informed about the supplier’s product and market?
If the (supplier) market is complicated or hard to understand, the companies in the industry have less bargaining power with their suppliers.

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