In the context of Porter's five forces model, the bargaining power of suppliers (auto dealers) is a weak force when considering the example of auto dealers setting the price of new cars in which consumers are unable to verify the 'true price' of vehicles. T/F

Question

Ahmad

Business

3 November, 10:02

In the context of Porter's five forces model, the bargaining power of suppliers (auto dealers) is a weak force when considering the example of auto dealers setting the price of new cars in which consumers are unable to verify the 'true price' of vehicles. T/F

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Answers (1)

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Mugsy · Answer 1

False

Explanation:

As per the Porter's Five force the force of supplier is described as follows:

The suppliers sets the price of goods that can be controlled by them, that depends on number of suppliers of inputs for the goods, if there are less suppliers then the price will move according to suppliers as for high demand there are low suppliers.

Further here it is provided that the price is determined by auto dealers, of a product for which consumers cannot derive the true price that means, that the suppliers can add any profit margin.

This will not make the supplier force weak in any respect.

Therefore, the statement is False.