CA Inter P6 · Chapter 11 · Question 4 of 11
The bargaining power of suppliers in an industry is likely to be HIGH when:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) There are few suppliers, their input is critical and differentiated, and switching to another supplier is costly
Explanation
Suppliers have strong power when they are concentrated, their product is unique or important to the buyer's quality, substitutes are unavailable and switching costs are high. Supplier power is weaker when the industry buying from them is an important customer or can credibly integrate backwards.
More Strategic Analysis: External Environment MCQs
- Q6For domestic airlines, the growing use of high-quality video conferencing by corporate clients instead of travelling to meetings represents:
- Q7Rivalry among existing competitors tends to be MOST intense when:
- Q8A strategic group map of an industry is used to:
- Q9Key Success Factors (KSFs) of an industry are best described as:
- Q10Which of the following is part of a firm's micro (task) environment rather than its macro environment?