Strategic Management Porters Five Forces: Analysis.

Supplier power refers to the ease at which the suppliers of products or services can change prices and thus affect the mode of operation of the company. Supplier power is shaped by the number of suppliers that the company has on one product together with the uniqueness of their products. When a company is strung-out on one supplier for a particular commodity, they are exposed to the risk of hiked prices and lack of stock when the supplier is not producing. The supplier power may also be high when a supplier has exclusive rights to produce a certain commodity. Companies are in a good position when they have many suppliers to choose from and in such situations, they enjoy bargaining power. The Carrefour Company supplies a wide range of products and hence has many suppliers. They sell goods that have many substitutes and hence they have the benefit of choosing their supplier and have the advantage in bargaining power. Their main products are groceries that have many suppliers. Buyer power pertains the ability of the buyers of the company’s products to the control the prices and strategies. The number of buyers or customers that the company has determines their ability to control the prices. On the occasion where a company has very many buyers of their commodities, one buyer or a group of buyers is insignificant and cannot control the price at which that company sells its products. On the other hand, when a company produces products with few buyers or is over-dependent the customer.


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