How could your competitors influence those suppliers to impact your competitiveness?


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How could your competitors influence those suppliers to impact your competitiveness?


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When conducting an industry environment analysis (a component of the external environment), supply chain is a critical variable. The supply chain is a two way street. The company you assess consumes resources (provided by others; suppliers) and produces a product (required by others, hopefully). The competitiveness of your product within your market partially hinges on your price which is influenced by the cost of the resources required to produce your product. Imagine you are in a market with multiple competitors who all rely upon a small group of suppliers. In what ways could those few suppliers be a threat to your competitiveness? How could your competitors influence those suppliers to impact your competitiveness? Conversely, how could you engage with those suppliers to gain an edge over your competition? (Remember, your suppliers are in competition with each other as well.)