Using Porter's five forces model of industry competition, the threat of a supplier to an established producer is likely to be increased when:

Question

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When supply items are a major portion of the product cost, the supplier has more bargaining power as the producer is highly dependent on the supplier for those inputs. When switching costs are high, the producer is less likely to switch to a different supplier, further increasing the bargaining power of the supplier. However, a high number of qualified suppliers could actually decrease the bargaining power of a single supplier, as the producer has more options to choose from. Therefore, options A and B are likely to increase the threat of a supplier, and option C is not necessarily a contributing factor.

Using Porter's Five Forces Model of Industry Competition, the Threat