Jacksonville Business Daily

What is the bargaining power of suppliers and buyers?

I am writing about Altria who owns Philip Morris Tobacco company, and I know bargaining power of suppliers and buyers is a barrier to entry, I just cant quite figure out what bargaining power of suppliers and buyers means.

Public Comments

1. means that there are few buyers/suppliers that a company can deal with. Could be because of geography, unique resource, industry standards, relationship-specific investment/swtiching costs. In case of tobacco, suppliers might have bargaining power b/c they are the only ones with specific sort of tobacco; buyers might have power b/c there are only so many national store chains, and loosing even one of them will hurt profits.