Thursday, January 14, 2010

Bargaining power of Supplier

Bargaining power of supplier: The suppliers are the one who supply the raw material required for manufacturing purpose. The bargaining power of supplier also plays important role in a business. If there is more number of suppliers for your business then it gives some power to you. You can demand more from suppliers. If you are really not satisfied with the current supplier then you can easily switch to new supplier. The number of supplier should be more to get success in manufacturing industry. It reduces the dependency.
You can expect more and more quality products from your supplier for less cost as there is more competition to supply the raw material to you. If it requires only less money to switch from one supplier to another supplier then you can switch at any point of time. One more important thing is availability of substitute material to input. In total more number of suppliers gives benefit to the business.

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