Strong linkages to customers and suppliers increase switching costs.

Question

Quizplus · Accepted Answer

When a company has strong linkages with its customers and suppliers, it becomes more difficult for them to switch to another company as the relationship between them is stronger and the costs associated with a switch are higher. This can be in the form of investments made in the relationship, dependence on each other's products/services, or simply a higher level of trust and dependency. Therefore, strong linkages increase switching costs.

Strong Linkages to Customers and Suppliers Increase Switching Costs