QuestionMay 29, 2025

How does the bargaining power of buyers influence industry dynamics in Porter's 5 Forces? Buyer's power is low when they can easily negotiate better prices and terms. Buyer's power is high when there are many buyers on the market. Buyer's power is low when switching costs are high. Buyer's power is low when there are readily available substitutes. Buyer's power is high when they cannot integrate backward.

How does the bargaining power of buyers influence industry dynamics in Porter's 5 Forces? Buyer's power is low when they can easily negotiate better prices and terms. Buyer's power is high when there are many buyers on the market. Buyer's power is low when switching costs are high. Buyer's power is low when there are readily available substitutes. Buyer's power is high when they cannot integrate backward.
How does the bargaining power of buyers influence industry dynamics in
Porter's 5 Forces?
Buyer's power is low when they can easily negotiate better prices and terms.
Buyer's power is high when there are many buyers on the market.
Buyer's power is low when switching costs are high.
Buyer's power is low when there are readily available substitutes.
Buyer's power is high when they cannot integrate backward.

Solution
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Answer

Buyer's power influences industry dynamics by affecting pricing, competition, and profitability, with high power leading to increased competition and lower prices. Explanation 1. Identify Correct Statements Buyer's power is high when they can easily negotiate better prices and terms, not low. It is also high when there are few buyers, not many. Buyer's power is low when switching costs are high, as it makes it difficult for them to change suppliers. Buyer's power is high when there are readily available substitutes, not low. Lastly, buyer's power is low when they cannot integrate backward. 2. Analyze Influence on Industry Dynamics High buyer power can lead to reduced prices and margins for companies within the industry, increasing competition. Low buyer power allows companies to maintain higher prices and profitability.

Explanation

1. Identify Correct Statements<br /> Buyer's power is high when they can easily negotiate better prices and terms, not low. It is also high when there are few buyers, not many. Buyer's power is low when switching costs are high, as it makes it difficult for them to change suppliers. Buyer's power is high when there are readily available substitutes, not low. Lastly, buyer's power is low when they cannot integrate backward.<br /><br />2. Analyze Influence on Industry Dynamics<br /> High buyer power can lead to reduced prices and margins for companies within the industry, increasing competition. Low buyer power allows companies to maintain higher prices and profitability.
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