Bargaining Power Of Buyers Case Study

Register to read the introduction… On the opposite spectrum from supplier bargaining power is the bargaining power of buyers. These buyers do not just represent the end user consumer who purchases a PC, laptop computer, or other computer accessory, but represent the buyers all along the entire supply chain from concept and research and development to manufacturing, customization, packaging, transportation, sales, and delivery and in some cases, after the sale customer service. Their overall buying power as a group is considered to be high, and likely just higher than that of the suppliers, who have a good bit of sway over prices and supply logistics, but need buyers to stay in business. Powerful buyers purchase a majority or large portion of a supplier’s (or group of suppliers) products. They are also usually a minority group with major financial leverage, including the ability to buy or take over a supplier or another competing buyer’s firm. Conversely, buyers with weak positions or little bargaining power are likely part of a large pool or flooded segment of buyers who do not have the individual financial capital to switch to alternate producers and are even vulnerable to clever suppliers and other stronger buyers acquiring their firms in a bid to increase their buying power, supplier power or …show more content…
Compared to HP and Gateway, Dell leaders can count that very effective supply chain and network of vendors. A leaner management team and expanded product line, including servers and other consumer products make Dell a stronger firm all around. Perhaps the greatest strength for this firm is its familiarity as a low-cost leader and the experience of leaders and managers in integrating that low-cost leadership approach into every stage of operations.
Weaknesses. As an industry leader, Dell and its leaders are constantly being targeted by newcomers to the market and existing rival firms. Currently HP is outpacing Dell in the area of innovation with its touch screen technology and integrated interface. Additionally, there are possible points of exploitation or interruption in the firm’s masterful supply chain, as firms like UPS could be approached by other industry players to form new alliances.
Skills. The research and development team, along with the Corporate Governance board at Dell are open and actively seeking opportunities to improve the firm at every level, but especially in product development, corporate responsibility and social consciousness. Managers are skilled at selling and developers and assemblers are skilled at creating customizable pieces in a cost-effective manner. More important, Michael Dell and the firm’s leaders and stakeholders are skilled at measuring success against