The 4th Force - supplier power

Today I have been...

Reading about supplier power

Why?

Required reading in the section on porter's 5 forces. p33 u2s3

So What?

A large concentration of suppliers (eg a small number) relative to the concentration of the buyers (eg a larger number)
A small number of substitutes
A more differentiated product/service being supplied
The more credible the threat of forward integration (outsourcing?)

...all increase supplier power.

It's similar to the buyer relationship - between seller and buyer. There is increasing symbiosis between firms and their suppliers.


How will I use it?

 All relevant!