Five Forces Model Essay Example | Topics and Well Written Essays - 250 words

flipper Forces Model - Essay Examples are powerful, they can uphold pressure on the producing industry such as setting very high prices for the raw materials so as to capture some of the industrys profits.Pines, 2006 in the Journal of emergency medicine asserts that the suppliers fuck their power if there is credible forward integration. A good example of this is Baxter International which is a great manufacturer of hospital supplies where it acquired American Hospital supply, a distributor. In doing so, the company gained a lot of talk terms power, and consequently set higher prices for the supplies to maximise on the profit. Suppliers offering differentiated products such as pharmaceutic companies offering patented drugs with distinctive medical benefits have power over hospitals and health maintenance organisations as well as other drug buyer companies offering generics. When there are only a few suppliers available in an industry, their bargaining power is higher as they tak e advantage so as to increase their profits. Scholars have cited that suppliers may gain power when there is a significant apostrophize involved to change suppliers. A good example is the relationship between Microsoft and the PC manufacturers. Microsofts roughly monopoly in the operating system increases its supplier bargaining power.However, the supplier bargaining power may be weak in the case of many competitive suppliers, for example the tire manufacturing companies in America, the prices become order (Roy, 2006). The suppliers also lose power when there is only a little switching cost to some other supplier or the when the industries being supplied with the raw materials threaten to integrate backward producing the industries product if the suppliers are to a fault profitable. The five forces therefore reveal if the industry is profitable and help investors anticipate positive and negative shifts.Clarke, P. (January 01, 1999). Porters Five Forces Model A Methodological Cr itique- or the Importance of Methodology in the