Essay: The Bargaining Power of suppliers in Dell

Sample Essay

Power lies in the name of the brand, Dell, Hewlett Packard, IBM etc. This case is the complete opposite of the power of buyers. Switching of the customer from one supplier to the next, causes concern. The bargaining power the lower the better. For e.g. Intel is a good supplier, but what would happen to Dell if it stopped supplying Intel Inside? The answer is simple; the customers would just go elsewhere. Of course depending on the quality, dedicated customers will increase the sales, but as the brand name of the competitor rises, attraction for switching increases regardless of the cost of switching.

The threat of substitutes

When there is a substitute for a particular product available the manufacturers of the product obviously feel threatened. For e.g. what would happen if the business world took to using fax over email? Digital technology is substitutes as a replacement for Polaroid!! Besides substitutes come cheaper, and if besides being economical they possess convenient qualities all the better!! The customer will choose the substitute regardless.

Competitive rivalry

Rivalry and competition strives for improvement and success. For a company to be a worthy adversary, the company must be equipped with the skills and the qualities to overcome. And competitive rivalry is always part of a market where equal competitors face one another to see whose products work best for the customer. The latest technology is provided by which company, and which product is economically and easily accessible?

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