Question

Suppliers are powerful when:
a. Satisfactory substitutes are available.
b. They sell a commodity product.
c. They offer a credible threat of forward integration.
d. They are in a highly fragmented industry

Answer 1

The Correct Answer is...

✔ c. They offer a credible threat of forward integration.

Explanation:

Suppliers are powerful when they offer a credible threat of forward integration.

The bargaining power of suppliers determines the cost of raw materials and other inputs. The business of a firm is largely dependent on its suppliers who supply it with resources such as raw materials, spare-parts, equipment, machinery, labor and other supplies.