Bargaining Power of

Suppliers
• Bargaining power of suppliers is the second factor that affects the
level of competition among the players in the industry.
Determinants of Supplier Power
• Supplier Concentration
• Supplier
• Substitute inputs
• Product differentiation
• Power
• Buyer’s threat of backward integration
• Supplier’s threat of forward integration
• Buyer’s switching cost to other inputs
Determinants of buyer power

• Buyer concentration
• Power
• Bargaining leverage
• Product differentiation
• Buyer’s switching cost to other products
• Buyer’s Volume
• Substitute product
• Buyer’s threat of backward integration ability
Determinants of threat of substitute
• Relative price of substitute products
• Threat of substitute products
• Relative quality of substitutes
• Switching cost to buyers
Determinant of rivalry of competition
• Number of competitors
• Exit barriers
• Fixed vs variable costs
• Product differentiation
• Diversity of competitors
• Industry growth rate
• Size of competitors
• Rivalry of competition