Crowley Heat Exchangers, Inc. is the only provider of a patented high-efficiency heat exchanger. Global Construction Corporation desires to include Crowley's heat exchanger in a proposal for a major project for Global's largest client. However, Crowley charges a premium price for its patented equipment. As a result, Global's potential profit on the major project is eroded, which is an example of the high bargaining power of
A)customers.
B)suppliers.
C)complements.
D)competitors.
E)new entrants.

Question

Quizplus · Accepted Answer

The high bargaining power of a supplier refers to their ability to charge premium prices for their unique or patented products or services, which can erode the potential profits of their customers. In this scenario, Crowley Heat Exchangers, Inc. is the only provider of a patented high-efficiency heat exchanger, and thus has high bargaining power as a supplier, which is negatively impacting Global Construction Corporation's potential profits.