US CMA Part 1 · Chapter 2 · Question 2 of 30
Using Porter's five forces model, which situation would most likely REDUCE the bargaining power of buyers in an industry?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Customers face high costs and disruption if they switch to a rival supplier
Explanation
High switching costs lock customers in and weaken their ability to negotiate on price. Standardized products, concentrated purchasing and a credible threat of backward integration all increase buyer power.
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