When are competitive pressures from buyers typically stronger?

Competitive pressures from buyers are typically stronger when demand is rising because, in such a scenario, buyers have more options available to them. As demand increases, buyers are often in a position where they can be more selective and negotiate harder for lower prices, better quality, or additional features. This heightens competition among suppliers, as they strive to attract and retain these valuable buyers.

In contrast, when demand is low, buyers may be less demanding since suppliers are more willing to accommodate them in order to make sales. A rising demand scenario amplifies buyers’ power, as they can leverage their purchasing decisions to exert influence over suppliers, thereby increasing competitive pressure.

Factors such as product differentiation and supplier capacity also play significant roles but do not inherently increase buyer pressure to the same degree as a rising demand environment does. For instance, when products are very different, buyers might have less bargaining power, as their choices become limited. Similarly, when suppliers have limited capacity, they may prioritize fulfilling orders rather than being pressured by buyers. Additionally, having many buyers in the marketplace does not necessarily create stronger competitive pressures if the buyers are fragmented and lack substantial purchasing influence.