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CIPS L4M2 Exam - Topic 8 Question 59 Discussion

Which of the following will help the bargaining strength of a buyer?The buyer has the option to make the product in-houseThere are a limited number of suppliers available to the buyerThe buyer's switching costs are highThe buyer's spend is a high proportion of the supplier's revenue
C) 1 and 4 only
A) 1 and 2 only
B) 2 and 4 only
D) 2 and 3 only

CIPS L4M2 Exam - Topic 8 Question 59 Discussion

Actual exam question for CIPS's L4M2 exam
Question #: 59
Topic #: 8
[All L4M2 Questions]

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

Show Suggested Answer Hide Answer
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.


by Asha at Jun 10, 2025, 09:22 AM

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Dallas
9 months ago
1 and 4 seem like a solid combo for bargaining strength!
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Ryan
9 months ago
Limited suppliers? That's a red flag for buyers!
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Izetta
9 months ago
Wait, how does high spend help? Sounds counterintuitive.
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Beckie
9 months ago
I disagree, high switching costs weaken the buyer's position.
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Jutta
9 months ago
Making in-house definitely boosts bargaining power!
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Sage
10 months ago
I’m leaning towards option B, but I’m a bit confused about how high switching costs affect the buyer's strength.
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Vilma
10 months ago
I practiced a question similar to this, and I feel like the buyer's spend being a high proportion of the supplier's revenue is a key factor.
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Jeffrey
10 months ago
I think the limited number of suppliers definitely weakens the buyer's bargaining power, but I can't recall how high switching costs play into this.
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Natalya
10 months ago
I remember discussing how having the option to make a product in-house can really strengthen a buyer's position, but I'm not sure about the other factors.
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Lorriane
11 months ago
I'm leaning towards option B, since having a limited number of suppliers and the buyer's spend being a high proportion of the supplier's revenue would both strengthen the buyer's position. The other factors don't seem as directly relevant to bargaining strength.
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Emily
11 months ago
Okay, I think I've got this. The key is to identify which factors would give the buyer more leverage in negotiations. Having the option to make the product in-house and the buyer's spend being a high proportion of the supplier's revenue - those seem like the strongest indicators of bargaining power.
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Ettie
11 months ago
Hmm, I'm a bit unsure about this one. The options seem to cover different aspects of the buyer-supplier relationship, but I'm not sure how to weigh them against each other. I'll need to think this through step-by-step.
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Dortha
11 months ago
This seems like a straightforward question about factors that influence a buyer's bargaining power. I'll need to carefully consider each option and how they would impact the buyer's position.
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