Bargaining power of channels and end users

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Bargaining power of channels and end users tends to be high of the industry displays the following characteristics:

  • High concentration of buyers
    • Leverages purchasing power through pooling
  • Strong fragmentation of suppliers
    • Which makes it difficult to come to a joint approach in pricing
  • A high degree of market transparancy
    • Which allows buyers to easily compare prices
  • Products are increasingly becoming commodities
    • Resulting in little differentiation
  • Low switching cost and weak networking effect
    • Which makes it easy to switch suppliers