ABC Motors is the largest manufacturer of cars.The company purchases raw materials from many small-sized sellers across the globe.In this case, ABC Motors is characterized by ________.
A)very low threat of substitute products
B)high bargaining power over its suppliers
C)very low threat of new entrants to market
D)very high bargaining power over its customers

Question

Quizplus · Accepted Answer

ABC Motors' purchasing from numerous small-sized sellers implies that there are many suppliers available. This reduces suppliers' bargaining power, making it easier for ABC Motors to negotiate lower prices, longer payment terms and more favourable conditions. Consequently, ABC Motors has a high bargaining power over its suppliers.

ABC Motors Is the Largest Manufacturer of Cars