Bargaining Power of Buyers or Customers

(Weak Force)
Future Retail ltd. (FRETAIL) faces the weak intensity of the bargaining power of
buyers in the retail industry environment. Based on Porter’s Five Forces analysis
model, the large population of buyers makes it difficult for them to impose significant
pressure on retail firms[industry]. Future Retail ltd. (FRETAIL) is subject to the
following external factors concerning the weak bargaining power of buyers or
customers:

 Large population of consumers (weak force)

 High diversity of consumers (weak force)

The consumers now-a-days are open to newer brands, now these newer brands do
offer large discounts to capture market share but still earn good amount of margins
due to volume of sales this is evident from profits that brands earn despite Buy-one-
Get-one offers. Overall there are all type of customers ,buying all sort of products
hence collectively there is no greater power with the buyer.

 Small size of individual purchases (weak force)

The bargaining power of consumers will be moderately high if a single volume

purchase are very high, but mostly the consumers are household type and not bulk
buyers. So, the average sales made by a particular consumer are not impacting hard
on to the brands and Future retail as a whole. Hence, there is no collective
bargaining power for the consumer.

The large population of buyers exerts a weak force on Future retail ltd. (FRETAIL)
and the retail industry. Individual buyers have negligible impact on the company’s
pan-India revenues. The weak force due to buyer diversity and the weak force of
small individual purchases further weaken the bargaining power of customers.
Higher buyer diversity makes it more difficult for customers to collectively impose
pressure on the company. In effect, the bargaining power of buyers is weak in
influencing Future Retail ltd. and other firms in the industry.