Klaus's office has always used Tangerine computers. His technical people have suggested that he switch all his employees over to Vale computers. Klaus is reluctant because it will mean not only replacing all the computers but also buying all new software and taking the time to train everyone. Klaus is worried about
A)barriers to entry.
B)benchmarking.
C)environmental uncertainty.
D)switching costs.
E)strategic maneuvering.

Question

Quizplus · Accepted Answer

Dependence on suppliers results from high switching costs-the fixed costs buyers face if they change suppliers. For example, once a buyer learns how to operate a supplier's equipment, such as computer software, the buyer faces both economic and psychological costs in changing to a new supplier.

Klaus's Office Has Always Used Tangerine Computers