Bargaining Power of Buyers. Examples

Five Forces (Porter) | Five Forces Analysis
Knowledge Center

Jazmina L. Musa, Philippines

Bargaining Power of Buyers. Examples

What precisely is bargaining power of buyers? Can you cite an example? Thank you.


Manager, India

Bargaining Power of Buyers

Let's take an example. Two companies A and B are producing substitutes with nearly equal pricing.
Situation: company A raises its prices because it thinks consumers won't mind since my product is required. But the consumers shift to company B and the sales of company A thus falls. Company A now wakes up to realise this fact and quickly rolls back the price increase. Thus the buyers have bargained and shift back to company A.

Dunstan, Australia

Bargaining Power of Buyers

It is the power that buyers have over the producer of goods. It can be a threat to producers, especially when there are several producers in the market. These are a few examples of how buyers can exercise their bargaining power:
1) If there are few buyers and they purchase large quantities, they can demand lower prices. (Do you think the producer would like to lose such a customer?)
2) If a single buyer purchases the majority of another company's multiple products (Would you give up a customer that generates a large revenue?)
3) If there are several buyers and several producers of the same product, the buyer can easily switch between producers and ask for better pricing (i.e. could be about maintaining market share for the producers)
4) A purchaser buying the same items from several producers. The producer will tend to increase competition amongst producers. (i.e considering the economies of scale).

Media Matthews-Williams
Student (University), Jamaica

Porter's' Five Forces

Simply put the bargaining power of buyers is the ability of the buyer to control prices with their p...

ujang, Afghanistan

Bargaining Power in Banking Industry

Can anyone tell me how to identified bargaining power of buyers and suppliers in banking industry? T...

Amos Amodu
Student (MBA)

Example of Bargaining Power of Buyers in the Banking Industry

This is the ability of buyer to dictate what sellers (bank) can do. A typical example was the attem...


More on Five Forces (Porter) | Five Forces Analysis:
Assumptions of the Five Forces Model. Limitations
5 Forces in Emerging Industries
Government as 6th Force in Porter's Five Forces
MEDIA as the 7th Force in Porter's Five Forces
Industry Analysis model
Strengths of Porter's Five Forces Model
Substitutes and the Five Forces Model
How does Information Technology alter Porter's 5 Forces
Evolution in our Expectations of Business and Porter's 5 Forces Model
Business Networking: Forces are Getting Connected
👀Bargaining Power of Buyers. Examples
How to Deal with Competitors in Five Forces Analysis?
Measuring / Calculating the Five Forces of Porter?
There are More than Porter's 5 Forces!
Why Porter's Monitor Consulting Company Failed
Does Competition Increase the Need for Segmentation?
The New Industrial Economics School
🔥Porter's 5 Forces Framework in Non-competitive Situations?
Special Interest Group

Do you have a keen interest in Five Forces (Porter) | Five Forces Analysis? Become our SIG Leader

Five Forces (Porter) | Five Forces Analysis
Knowledge Center

About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2022 12manage - The Executive Fast Track. V15.8 - Last updated: 10-12-2022. All names of their owners.