Bargaining Power Of Buyers : A Large Portion Of The Selling Firm 's Total Output

799 Words Oct 12th, 2015 4 Pages
Bargaining Power of Buyers

The buyers of PCs in 2010 were individual’s/home, government, education, corporations, and small- and medium-sized companies (Yoffie 4). The criteria that will be used to evaluate these group of buyers are whether: they buy a large portion of the selling firm’s total output, the selling firm is dependent on the buyers for a significant portion of its sales revenue, they can switch to another seller’s product with few switching costs, the selling industry’s products are undifferentiated or similar to a commodity, or they present a credible threat to integrate backward into the seller 's’ industry.
Individuals and Home
Individuals and home held the largest segment because they accounted for more than half of the PC shipments worldwide; thus they bought a large portion of the selling firm’s total output. As a result, the selling firm was dependent on the buyers for a significant portion of its sales revenue. However, buyers of individual and home could switch to another seller’s product with few switching costs. These buyers are concerned about price, design, mobility, and wireless features ; so, if they wanted, the buyer could purchase similar commodities. Since these buyers could not cut costs to produce their own PCs, they did not present a credible threat to integrate backward into the seller’s industry.
Government
Government buyers encouraged a more proactive enterprise solution . Furthermore, government buyers bought a large portion of the…

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