Apple's dominance of smartphone and tablet markets has allowed the firm to lock up 60 percent of the world's supply of advanced touch-screen displays, and to do so with better pricing than would be available to smaller rivals. This is an example of:
A) network externalities that make Apple valuable.
B) high switching costs for suppliers.
C) a complex tech product establishing itself as a killer brand.
D) a growing firm gaining bargaining power with its suppliers.
E) low search costs associated with a famous brand.

Question

Quizplus · Accepted Answer

This scenario exemplifies a growing firm (Apple) leveraging its market dominance to negotiate better terms and secure a large portion of a critical component (advanced touch-screen displays), thus gaining significant bargaining power with its suppliers.

Apple's Dominance of Smartphone and Tablet Markets Has Allowed the Firm