Bargaining power of suppliers at Southern Hospitality brings the high number of suppliers, high overall supply, and low forward integration.
Bargaining power of suppliers at Southern Hospitality brings the high number of suppliers, high overall supply, and low forward integration.
Bargaining Power of Suppliers:
This force analyzes how much power and control a company’s supplier (also known as the market of inputs) has over the potential to raise its prices or to reduce the quality of purchased goods or services, which in turn would lower an industry’s profitability potential. The concentration of suppliers and the availability of substitute suppliers are important factors in determining supplier power. The fewer there are, the more power they have. Businesses are in a better position when there are a multitude of suppliers. Sources of supplier power also include the switching costs of companies in the industry, the presence of available substitutes, the strength of their distribution channels and the uniqueness or level of Differentiation in the product or service the supplier is delivering.
Bargaining Power of Suppliers:
- Number of suppliers.
- Size of suppliers.
- Supplier concentration.
- Availability of substitutes for the supplier’s products.
- Uniqueness of supplier’s products or services (differentiation).
- Switching cost for supplier’s products.
- Supplier’s threat of forward integration.
- Industry threat of backward integration.
- Supplier’s contribution to quality or service of the industry products.
- Importance of volume to supplier.
- Total industry cost contributed by suppliers.
- Importance of the industry to supplier’s profit.
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