A sell sth to B, when we say bargainning power of buyer, does it refer to B, and barganning power of supplier, does it refer to A? or bargainning power refer to A’s supplier? Thanks.
B’s power over A is buyers power A’s power over B is power of supplier
I believe that the buyer would be whomever B is selling to. The supplier is A.
when can we say bargainnng power of supplier? sometimes the answer list give there two choice, and it could be confusing. june2009 Wrote: ------------------------------------------------------- > B’s power over A is buyers power > > A’s power over B is power of supplier
If I’m the only supplier of some necessary product in an area, like WATER, then I have power over everyone who needs it. If you dont like my pricing then go find your own potable water somewhere else…take a bucket to the river, find a way to clean it…try to beat my pricing…your prob cant. (This is a monopoly example kinda so not perfect but clean enough). If I’m some huge buyer (Walmart), then if I tell you I want inventory delivered just in time and I want discounts and all these special things, then Walmart has you by the balls. You arent gonna tell Walmart to F off cuz they have the POWER. Bargaining power of BUYER
THanks. what I feel confused is: when company is able to capture the value created for the customer because customer has weak bargainning power, why we can not say that supplier has strong bargainning pwoer? this shows up in some question, they listed both . But only weak bargainning power of buyer is correct… june2009 Wrote: ------------------------------------------------------- > If I’m the only supplier of some necessary product > in an area, like WATER, then I have power over > everyone who needs it. If you dont like my > pricing then go find your own potable water > somewhere else…take a bucket to the river, find > a way to clean it…try to beat my pricing…your > prob cant. (This is a monopoly example kinda so > not perfect but clean enough). > > If I’m some huge buyer (Walmart), then if I tell > you I want inventory delivered just in time and I > want discounts and all these special things, then > Walmart has you by the balls. You arent gonna > tell Walmart to F off cuz they have the POWER. > Bargaining power of BUYER
june2009 Wrote: ------------------------------------------------------- > If I’m the only supplier of some necessary product > in an area, like WATER, then I have power over > everyone who needs it. If you dont like my > pricing then go find your own potable water > somewhere else…take a bucket to the river, find > a way to clean it…try to beat my pricing…your > prob cant. (This is a monopoly example kinda so > not perfect but clean enough). > > If I’m some huge buyer (Walmart), then if I tell > you I want inventory delivered just in time and I > want discounts and all these special things, then > Walmart has you by the balls. You arent gonna > tell Walmart to F off cuz they have the POWER. > Bargaining power of BUYER Everything you said is correct, but I’m pretty sure the curriculum wants us to think of “bargaining power of the buyer” from the perspective of the buyer being the customer buying from the subject company. So Walmart does have a relatively high bargaining power of BUYERS in that there are plenty of substitutes like Target, etc. where people can buy their junk. What you’re referring to, because of their aggressive tactics with suppliers and high market share, the bargaining power of their SUPPLIERS is pretty low.