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Describe the Buyer's Bargaining Power in the Organic Packaged Food Industry. Rate the force as Strong,...

Describe the Buyer's Bargaining Power in the Organic Packaged Food Industry.

Rate the force as Strong, Medium, or Weak and explain why you gave it that rating.

Business   Operations-Management   
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Answer #1

The proverb 'customer is the king' may not be applicable to all situations. At least it is wrong in the case of organic food industry.

The organic packaged food industry is meant to affluent class buyers. The prices will be higher compared to inorganic food products. Here, the bargaining power of the buyer is week because of the following reasons.

* The production cost of the organic foods is higher compared to inorganic foods.

* The production of organic foods will be in limited quantities. This again increases the demand for it.

* Inorganic packaged foods are available for those who can't afford the price of organic foods.

* They are supplied to the market to cater the needs of the niche market or affluent buyers.

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