GROUP 7

Harsimran Singh Anand (007)

SUPPLIER POWER

Nishant Singla (050) Karan Keshav Sood (051) Vaibhav Wadhwa (055)

Bargaining Power of Suppliers

Suppliers are likely to be powerful if: * Supplier industry is dominated by a few firms

Suppliers exert power in the industry by:

* Threatening to raise prices or to reduce quality

* * * *

Suppliers products have few substitutes

Buyer is not an important customer to supplier

Suppliers product is an important input to buyers product

Suppliers products are differentiated Suppliers products have high switching costs Supplier poses credible threat of forward integration

*
*

Supplier Power
Producers of metal cans are limited by the supply of raw materials for their cans and the location of the suppliers of the raw materials The closer they are to the suppliers and customers, the lower the transportation costs incurred by the producers Thus the switching costs can be high if the producer has to go to another supplier across the country as there are only 3 major Aluminum suppliers Also, the 3 major companies can raise the prices in symphony with each other Suppliers also represent a threat of forward integration e.g. Reynold Metals

But , there are only 5 main producers of metal cans, thus the suppliers have only limited options
Overall, supplier power is medium.

THANK YOU