supplier bargaining power
What supplier bargaining power means in Business A-Level, as defined for AQA.
Definitions of supplier bargaining power
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Reference: AQA
One of Porter five forces, rising when alternatives are few and switching is costly, which explains why a firm can or cannot push its supplier on price or terms.
A small firm has less bargaining power over suppliers, and stretching creditors invites a supplier to withdraw the credit line altogether.
Topics that use supplier bargaining power
- Making financial decisions: improving cash flow and profits (AQA A-Level)
- Making operational decisions to improve performance: managing inventory and supply chains (AQA A-Level)
Related terms
- capacity utilisation
- cash flow versus profit
- constraints on small firms
- Core vs non-core activities
- credit control
- debt factoring
- effectiveness versus efficiency
- ethical sourcing
Using supplier bargaining power in the exam
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