Which factor weakens buyer bargaining power?

Prepare for the Global Strategy Exam. Use flashcards and multiple choice questions, complete with hints and detailed explanations. Master the material and excel on your test!

The correct answer is that buyer bargaining power is weakened when buyers purchase items infrequently. When buyers make purchases less often, their economic dependence on suppliers decreases, which diminishes their leverage in negotiations. This scenario often leads to less competition among suppliers for those buyers' business since the suppliers might focus on more frequent and reliable purchasers.

Infrequent purchasing means that the buyers do not have the same level of influence over suppliers compared to buyers who purchase regularly. Suppliers may not feel it necessary to lower prices or offer better terms and conditions since the buyers' choices do not impact their business significantly over time. A supplier often prioritizes maintaining a stable relationship with regular buyers rather than making concessions to infrequent ones.

Factors like backward integration by buyers or their frequency of purchases can actually enhance their bargaining position instead of weakening it. Conversely, when buyers are numerous but make low-volume purchases or are very well-informed and buy frequently, those scenarios typically empower buyers and strengthen their negotiating stance.

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