Power of Suppliers
The next factor in the five forces model addresses how easily suppliers can drive up the cost of inputs.
It is affected by the number of suppliers of key inputs of a good or service, how unique these inputs are, and how much it would cost a company to switch to another supplier.
The fewer suppliers to an industry, the more a company would depend on a supplier. As a result, the supplier has more power and can drive up input costs and push for other advantages in trade.
On the other hand, when there are many suppliers or low switching costs between rival suppliers.
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