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CS-164 Porters Five Forces - Part 04 Bargaining Power of Suppliers v05

CS-164 Porters Five Forces - Part 04 Bargaining Power of Suppliers
Case Study (CS-164) - Porter's Five Forces - Part 04 - Power of SuppliersSuppliers have bargaining power when there are few substitutes or when asupplier offers features and benefits that differentiated it from othercompetitors. A supplier may also have bargaining power when it can uniquelyhelp the buyer lower costs or increase product differentiation to the endconsumer. Background: DuPont is one of the world's largest chemical companies. The nylonfiber it developed for carpet manufacturers would have been considered acommodity product. However, DuPont created enormous Supplier BargainingPower by developing the brand "Stainmaster" and promoting the brand todownstream consumers. Many consumers demand Stainmaster carpet eventhough DuPont is not a carpet manufacturer. DuPont's unbranded CarpetFiber is a Commodity Productthat must compete on Price. When DuPont started promotingthe "Stainmaster" brand to endconsumers it raised it's SupplierPower with the manufacturers ofcarpet. DuPont's value to the carpetmanufactures now equals its(undifferentiated) value of nylonfiber PLUS consumer demandfor the Stainmaster brand. DuPont must match the MarketPrice when offering anundifferentiated CommodityProduct. The Stainmaster brand liftsDuPont's Prices and Profitabilitydespite also increasing theirCosts.DuPont vsCompetitorCarpet FiberCarpet ManufacturerWillingness To Pay(WTP) for FiberDuPont FiberCompetes onPrice AloneBrand Value ofStainmasterDuPont + Stainmastervs CompetitorCreateFeature ListBranded ProductAlternativesDuPont StainmasterCompetes onBrand ValueDataClean UpDataClean UpDuPont vs Competitor"After" Results Table Creator MatrixDistributions Price War CustomerDistributions Table Creator Feature TableTo List Product Generator Price War Column Filter Column Filter Pie chart (local) Case Study (CS-164) - Porter's Five Forces - Part 04 - Power of SuppliersSuppliers have bargaining power when there are few substitutes or when asupplier offers features and benefits that differentiated it from othercompetitors. A supplier may also have bargaining power when it can uniquelyhelp the buyer lower costs or increase product differentiation to the endconsumer. Background: DuPont is one of the world's largest chemical companies. The nylonfiber it developed for carpet manufacturers would have been considered acommodity product. However, DuPont created enormous Supplier BargainingPower by developing the brand "Stainmaster" and promoting the brand todownstream consumers. Many consumers demand Stainmaster carpet eventhough DuPont is not a carpet manufacturer. DuPont's unbranded CarpetFiber is a Commodity Productthat must compete on Price. When DuPont started promotingthe "Stainmaster" brand to endconsumers it raised it's SupplierPower with the manufacturers ofcarpet. DuPont's value to the carpetmanufactures now equals its(undifferentiated) value of nylonfiber PLUS consumer demandfor the Stainmaster brand. DuPont must match the MarketPrice when offering anundifferentiated CommodityProduct. The Stainmaster brand liftsDuPont's Prices and Profitabilitydespite also increasing theirCosts.DuPont vsCompetitorCarpet FiberCarpet ManufacturerWillingness To Pay(WTP) for FiberDuPont FiberCompetes onPrice AloneBrand Value ofStainmasterDuPont + Stainmastervs CompetitorCreateFeature ListBranded ProductAlternativesDuPont StainmasterCompetes onBrand ValueDataClean UpDataClean UpDuPont vs Competitor"After" ResultsTable Creator MatrixDistributions Price War CustomerDistributions Table Creator Feature TableTo List Product Generator Price War Column Filter Column Filter Pie chart (local)

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Created by: Berlin
Created at: 2019-12-09
On NodePit since: 2021-02-05
Last update: 2024-12-17
Created with KNIME version: v4.3.0
Tags: Market Simulation

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