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In preparation for holding negotiation meetings with existing suppliers, category manager Stephen would like to appraise the bargaining strength of his organisation. Which of the following are examples of buyer power? Select TWO that apply:
Suggested Answer: C
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In the scenario, the value of contract as well as the importance of purchased item justify the procurement's travel. Visiting a supplier at their HQ or operational facility may facilitate the procurement team in assessing, albeit briefly, the culture of the organisation, how busy they seem and how staff engage with each other. A visit is a good opportunity to assess supplier's capacity.
LO 2, AC 2.2
32 comments · newest first
GL
Gladys
11 months ago
Totally agree with A and D!
AR
Arlette
11 months ago
Surprised that E isn't considered buyer power too!
CA
Carlota
12 months ago
A is spot on, but D is a bit iffy.
SI
Sina
12 months ago
I think B is more relevant than people realize.
RO
Rosendo
1 year ago
A and D are definitely buyer power examples.
CO
Coleen
1 year ago
I feel like A and D are the strongest choices here. Switching suppliers easily and being a large buyer both give us leverage in negotiations.
NO
Novella
1 year ago
I’m a bit confused about B and E. Limited suppliers seem like it could weaken buyer power, but I guess high barriers could also mean less competition.
BU
Buffy
1 year ago
I remember a practice question where we discussed how a large buyer can influence suppliers, so I’d go with D for sure.
FE
Fernanda
1 year ago
I think the ability to easily switch suppliers is definitely a sign of buyer power, but I'm not sure about the other option.
MA
Marge
1 year ago
The key here is to identify factors that give the buyer leverage over the suppliers. The ability to switch suppliers and the buyer's size relative to suppliers seem like the clearest examples of that.
KA
Kathryn
1 year ago
I'm a bit confused by the options. I'm not sure if collusion between suppliers or high barriers to entry really demonstrate buyer power. I'll have to think this through carefully.
CH
Chaya
1 year ago
Okay, let's see. I think the ability to easily switch suppliers and the buyer being large relative to suppliers are good examples of buyer power. I'll go with those.
NA
Nada
1 year ago
This looks like a straightforward question on buyer power. I'm confident I can identify the two correct examples.
EL
Eleni
1 year ago
Hmm, I'm not sure about this one. I need to think through the concept of buyer power and how it relates to the options given.
NA
Natalie
2 years ago
E is a tricky one. High barriers to entry could actually limit buyer power, so I'd steer clear of that one.
FR
Frankie
1 year ago
I agree, E is a tricky one. High barriers to entry might not always mean more buyer power.
TO
Tomoko
1 year ago
D) Buyer is large in size relative to suppliers
MY
Myra
1 year ago
D) Buyer is large in size relative to suppliers
TW
Twana
1 year ago
A) Ability to easily switch suppliers
RO
Roy
2 years ago
A) Ability to easily switch suppliers
GR
Gracia
2 years ago
Haha, C is a good one! Collusion between suppliers would definitely work in Stephen's favor. Gotta love when the competition works together... against themselves!
DA
Dana
1 year ago
User 2: D) Buyer is large in size relative to suppliers
NO
Nobuko
2 years ago
User 1: A) Ability to easily switch suppliers
BE
Beckie
2 years ago
I'm not sure about D. I think E could also be an example of buyer power because high barriers of entry for new suppliers can give the buyer more control.
CH
Chan
2 years ago
I agree, A and D are the way to go. Switching suppliers easily and being a large buyer are definite signs of buyer power.
NA
Nadine
1 year ago
User 4: It's important to leverage buyer power to get the best deals for the organization.
CH
Chantay
1 year ago
User 3: Yeah, those two factors can really help in negotiations with suppliers.
JO
Jose
1 year ago
User 2: I agree, being able to switch suppliers easily and being a large buyer definitely give you an advantage.
CR
Cristina
2 years ago
User 1: I think A and D are the best examples of buyer power.
GI
Gilma
2 years ago
A and D seem like the most obvious choices here. As a category manager, Stephen needs to know how much bargaining power he has against his suppliers.
TI
Tiera
2 years ago
I agree with Kristel. A and D make sense because they show the ability to switch suppliers easily and being large in size relative to suppliers.
KR
Kristel
2 years ago
I think A and D are examples of buyer power.