Could somoene clarify Buyer Power More when more buyers, or less? Supplier Power more when more suppliers or less? Book and schweser are giving conflicting answers.
Buyer power decreases with more buyers. Think about it: if you went to a car lot and you were the only one there, you probably would have some bargaining power. But if 20 other people were looking at the same makes and models, you’d have less leverage. Supplier power decreases with more suppliers. If you were the only firm that supplied flat panel displays to computer makers, you’d have control on your side of the table. But with 7 other firms producing almost identical displays, you have less clout amongst the buyers. It all ties to supply and demand. Just remember that more is less.
Pepp… I think I know where you’re coming from. What if you had a large number of buyers and sellers and they colluded… that is, as buyers they collectively demanded lower prices and as sellers they raised prices through a cartel. I think the assumption is that this can’t/won’t happen in the market.
Unless you are oil…LOL
amberpower Wrote: ------------------------------------------------------- > Unless you are oil…LOL Ha! Yeah, well, as my first post stated… ‘cartel’! If it weren’t already almost 11pm I’d think about how the elasticity of supply and demand factors in to both of these forces. THat has to be a material factor. But, it’s been a long day, and it’s time to get into bed … with CFA books.
Ha! Yeah, well, as my first post stated… ‘cartel’! If it weren’t already almost 11pm I’d think about how the elasticity of supply and demand factors in to both of these forces. THat has to be a material factor. But, it’s been a long day, and it’s time to get into bed … with CFA books.
So for exam, the way I understand, the more buyers, the less buying power they have. the more suppliers the less supplying power they have.
Is it wrong if I say, buyers will have more power if there are more suppliers and supplier will have more power if there are more buyers?
any thoughts please?
pepp Wrote: ------------------------------------------------------- > Could somoene clarify > > Buyer Power More when more buyers, or less? > Supplier Power more when more suppliers or less? > > Book and schweser are giving conflicting answers. other way around