ICANBusiness, Management and FinanceBusiness and its Environment2021

Porter's Five Forces model is used to assess industry competitiveness. Which of the following scenarios in the Nigerian fast-moving consumer goods (FMCG) sector would MOST LIKELY indicate HIGH bargaining power of buyers?

AThere are only three dominant FMCG manufacturers supplying a fragmented retail market of over 10,000 small traders
BA large supermarket chain purchases 45% of a manufacturer's total output and can easily switch to competing brandsCORRECT
CHigh capital requirements deter new entrants, limiting the number of competitors in the market
DRaw material suppliers are concentrated and supply a unique ingredient unavailable elsewhere
AI
Toaster Teacher
Why the answer is B, and why the others tempt you.
Buyer bargaining power is high when buyers are concentrated, purchase in large volumes, and face low switching costs. Option B describes a single buyer (supermarket chain) accounting for 45% of output with easy substitution ability—classic indicators of high buyer power. Options A, C, and D describe low buyer power, high barriers to entry, and high supplier power respectively.
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