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CIPS Exam L4M2 Topic 8 Question 59 Discussion
Actual exam question for
CIPS's
L4M2 exam
Question #: 59
Topic #: 8
[All L4M2 Questions]
Topic #: 8
Which of the following will help the bargaining strength of a buyer?
The buyer has the option to make the product in-house
There are a limited number of suppliers available to the buyer
The buyer's switching costs are high
The buyer's spend is a high proportion of the supplier's revenue
Suggested Answer:
C
1 (Make in-house): The ability to produce in-house reduces dependency on suppliers, strengthening buyer power.
4 (High spend proportion): A high proportion of spend gives buyers leverage over suppliers who are reliant on their revenue.
Limited suppliers (2) and high switching costs (3) reduce buyer bargaining power. Reference: CIPS Level 4, Market Power Analysis.
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