A segment is unattractive if the company's suppliers are able to raise prices or reduce quantity supplied. Which of the following is the best illustration of the threat of suppliers' growing bargaining power?
A) Sears unsuccessfully attempted to compete with Walmart and Kmart.
B) Oil companies must purchase a significant amount of their product from OPEC.
C) Walmart has almost no competitors in its market space.
D) The U.S. Post Office has merged package operations with FedEx.
E) McDonald's is the largest fast food franchise and is still growing.

Question

Quizplus · Accepted Answer

Oil companies rely heavily on OPEC for their supply of oil, and OPEC has the ability to raise prices or reduce quantity supplied, thus increasing their bargaining power over the oil companies. The other answer choices do not illustrate the threat of suppliers' growing bargaining power.

A Segment Is Unattractive If the Company's Suppliers Are Able