Factors Underlying Buyer Power
|
Response
|
Effect on Industry
|
Strength
|
Rank
|
Weight
|
Reasoning
|
Is Buyer Concentration High?
|
No
|
Favorable
|
1
|
5
|
10%
|
Buyer demands are widespread across the globe
|
Is the Market Growth Rate High?
|
No
|
Moderately Unfavorable
|
4
|
4
|
15%
|
Slowing growth in US and Europe and emerging markets are yet to be fully exploited
|
Is the Firm’s Product Strategically Important to the Buyer?
|
Yes
|
Moderately Favorable
|
2
|
3
|
10%
|
Buyer has to subscribe to wireless service to use handset
|
Is the Buyer Strategically Important to the Firm?
|
Yes
|
Unfavorable
|
5
|
2
|
5%
|
Each buyer helps attain economies of scale
|
Are there Substitutes Available for the Buyer?
|
Yes
|
Moderately Unfavorable
|
4
|
1
|
5%
|
There are wireless service providers with varying value proposition in terms of services and price
|
Is there a High Need of the Firm to Fill Capacity?
|
Yes
|
Moderately Unfavorable
|
4
|
6
|
5%
|
To attain economies of scale and reduce costs to make the service attractive to customers
|
Is there High Threat of Vertical Integration from Customer?
|
No
|
Favorable
|
1
|
7
|
5%
|
Customers cant develop wireless networks
|
Is Buyer Price Sensitivity high?
|
Yes
|
Unfavorable
|
5
|
8
|
15%
|
Buyers in both developed and emerging markets are price sensitive
|
Is the Buyer switching costs high?
|
Yes
|
Unfavorable
|
4
|
9
|
10%
|
In most cases buyer has to pay a contract cancellation fee although this is offset partially by allowing the users to keep their telephone number
|
Is the product a significant portion of buyer’s costs?
|
Yes
|
Unfavorable
|
4
|
10
|
10%
|
It is a recurring cost for the buyer and hence the buyer is sensitive to the price factor
|
Does buyer have full information?
|
No
|
Favorable
|
2
|
11
|
10%
|
The buyer does not know the costs associated with wireless service and related profit margins
|
OVERALL BUYER POWER LEVEL
|
|
Moderately Unfavorable
|
3.4
|
|
|
|
