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Identify an industry in which the suppliers have strong bargaining power and another industry in which...

Identify an industry in which the suppliers have strong bargaining power and another industry in which the buyers have most of thr bargaining power. How does this affect potential profitability in the industries?

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Answer #1

In electronic battery manufacturing which is used in various devices, suppliers of Lithium metal have a high bargaining power as there are only few suppliers with limited elemental Lithium. This decreases the profit of buyers of Lithium who then make abtteries whereas increases the profits of suppliers of elemental Lithium.

On the other hand in soft drinks industry we have only 2 buyers, Pepsi and Coca Cola whereas the suppliers of raw material such as sugar water etc are many. Hence buyers have a high bargaining power and more profitability.

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