Which one of the following statements will most likely lower the supplier power exerted on incumbent firms in an industry? A

Finance Jan 17, 2021

Which one of the following statements will most likely lower the supplier power exerted on incumbent firms in an industry?
   A.   Incumbent firms have low pricing power
   B.   Incumbent firms sell commodity-like products
   C.   Incumbent firms cannot easily change their suppliers
   D.   Incumbents firms engage in backward integration

Expert Solution

Incumbent firms cannot easily change their suppliers.

Incumbent firms can build customer loyalty and brand recognition.Existing firms might have used a process of vertical integration to give them greater control of the supply chain in their industry.

ion in market.
The goods produced by different firms are homogeneous and there are no sunk costs, there is complete symmetry between an incumbent firm and would-be entrants.

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