Bargaining Power of Suppliers

The bargaining power of suppliers refers to their ability to influence prices and terms for the goods or services they provide to a business. If a supplier is few in number, has unique products, or can easily raise prices, their bargaining power is high. Conversely, if many suppliers offer similar goods, or the business can switch suppliers easily, the supplier's influence decreases. This dynamic affects a company's costs and profitability, as powerful suppliers can negotiate for better prices, higher quality, or more favorable terms, impacting the overall competitiveness of the business.