ArvinMeritor is a company that manufactures parts for the motor vehicle industry. It once used 15,000 different suppliers around the world. In 2002, the company announced plans to reduce its number of global suppliers to 1,000 by 2010. The ability to determine which suppliers meet or exceed its performance requirements indicates ArvinMeritor has:
A) channel shrinkage.
B) channel power.
C) a disintermediation policy.
D) oligopolitic control.
E) tying contracts with its suppliers.

Question

Quizplus · Accepted Answer

ArvinMeritor's ability to select suppliers that meet or exceed its performance requirements demonstrates channel power. This is because the company can influence the actions of its suppliers due to its position and importance as a customer.

ArvinMeritor Is a Company That Manufactures Parts for the Motor