Buyer Power Nora's Nicest Knick Knacks has sold a variety of products to hundreds of small retailers. Over time, she has added distributers who have a talent for finding more retailers for Nora. Now, over half of her sales go through just two of these
distributers. Rather than making periodic orders as stock gets low, these distributers make only a few large purchases each year. How can these aspects of her buyer relationships affect how much of the value she creates that she gets to capture?
Nora's sales are increasingly being concentrated to a few large buyers and into a few large orders. These buyers have increasing more leverage to demand better terms. Nora can no longer afford to not come to terms and lose these distributers as customers. This means she will tend to capture less of the value her firm creates.
You might also like to view...
If the quantity of money demanded is less than the quantity of money supplied, then the
A) interest rate will decrease. B) interest rate stays the same. C) interest rate will increase. D) effect on the interest rate is indeterminate.
If an individual had the option of receiving a cash transfer equal to the value of the housing subsidy, _____
a. they would be better off b. they could rent better housing than the public housing c. they could rent worse housing than the public housing d. all of the above e. a and b
If Best Lights, Lights R Us, and Bright Lights are all competing in the light bulb market and Best Lights consistently is the first to change prices, Best Lights might be ________.
A) offering to be the price leader B) signaling to the other firms to consistently lower their prices C) signaling to the other firms to consistently raise their prices D) signaling to the other firms to consistently maintain their prices
If the elasticity of supply is much greater than the elasticity of demand, an excise tax levied on the suppliers will
a. cause the suppliers to incur a greater burden of the tax than demanders b. cause the demanders to incur a greater burden of the tax than suppliers c. the burden of the tax will be shared equally between the suppliers and the demanders d. cause the entire burden of the tax to rest on the demanders e. Without more information as to the amount of the excise tax, who will incur a greater burden will be unclear