Supplier Power

Supplier Power refers to the ability of suppliers to influence the prices and terms of the goods or services they provide. When suppliers hold significant power, they can set higher prices, limit availability, or impose unfavorable conditions, which can impact a company's costs and profitability. Factors that increase supplier power include a few suppliers dominating the market, unique or specialized products, or high switching costs for companies changing suppliers. Understanding supplier power helps businesses manage relationships effectively and negotiate better terms to maintain their competitiveness.