NISM Certifications · NISM-Series-XV: Research Analyst · Industry Analysis
In Porter's five forces framework, a cement industry in which a few large buyers purchase most of the output and can easily switch between suppliers is MOST directly affected by which force?
Bargaining power of buyers is the force most directly affected. When a few large customers buy most of the output and can switch suppliers easily, they can force down prices and demand better terms, reducing industry profitability.
- ABargaining power of buyersCorrect
- BThreat of new entrants
- CBargaining power of suppliers
- DRivalry among existing competitors only
Explanation
When few buyers account for most sales and can switch easily, they can press for lower prices or better terms. This is the bargaining power of buyers. The other forces relate to entry, input suppliers or rivalry, not customer concentration.
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