The five competitive forces model suggests the bargaining power of buyers may af

Question

The five competitive forces model suggests the bargaining power of buyers may affect industry competition.

Which of the following is an example of a way buyers might affect an industry?

A. GM has significant bargaining power in the tire market comma which reduces the profitability of tire manufactures.

B. Wal-Mart has significant bargaining power over its suppliers comma which raises the prices suppliers can charge.

C. Wal-Mart has limited bargaining power over suppliers, which results in many of their suppliers altering their distribution systems to accommodate Wal-Mart's need to control the stocks of goods in stores.

D. The Technicolor Company no longer has any bargaining power over movie studios, limiting the profitability of producing color movies.

E. McDonald's has significant bargaining power over napkin suppliers, which raises the napkin prices they pay.

Explanation / Answer

Option A.

The bargaining power of one of the largest buyers of tyres, GM is so strong, that the price of tyres that the manufactures charge reduces, which reduces the profit of the tyre manufactures.

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