CAF-7 · Chapter 4 · Question 14 of 15
A major supermarket chain uses its massive purchasing volume to force local farmers to lower their selling prices, threatening to drop their contracts if they refuse. Under Porter's Five Forces, this demonstrates:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) High bargaining power of buyers
Explanation
The supermarket acts as the buyer for the farmers' produce. Because the supermarket purchases in massive volumes, it holds immense leverage over the small farmers, demonstrating high bargaining power of buyers.
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