23. Powerful suppliers can increase a buying organization's profits, especially when the organization must hold prices steady for its customers. Powerful suppliers can reduce an organization's profits, particularly if the organization cannot pass on price increases to its customers because it cannot raise its prices or provide poor-quality goods and services. AACSB: Analytic Blooms: Understand Learning Objective: 02-04 Identify elements of the competitive environment. Level of Difficulty: 2 Medium Topic: The Competitive Environment 24. Needing to learn a new software program as a result of changing suppliers is an example of a switching cost. TRUE Dependence on suppliers results from high switching costs, the fixed costs buyers face if they change suppliers. For example, once a buyer learns how to operate a supplier's equipment, such as computer software, the buyer faces both economic and psychological costs in changing to a new supplier. AACSB: Analytic Blooms: Understand Learning Objective: 02-04 Identify elements of the competitive environment. Level of Difficulty: 2 Medium Topic: The Competitive Environment
23. Powerful suppliers can increase a buying organization's profits, especially when the organization must hold prices steady for its customers. Powerful suppliers can reduce an organization's profits, particularly if the organization cannot pass on price increases to its customers because it cannot raise its prices or provide poor-quality goods and services. AACSB: Analytic Blooms: Understand Learning Objective: 02-04 Identify elements of the competitive environment. Level of Difficulty: 2 Medium Topic: The Competitive Environment 24. Needing to learn a new software program as a result of changing suppliers is an example of a switching cost. TRUE Dependence on suppliers results from high switching costs, the fixed costs buyers face if they change suppliers. For example, once a buyer learns how to operate a supplier's equipment, such as computer software, the buyer faces both economic and psychological costs in changing to a new supplier. AACSB: Analytic Blooms: Understand Learning Objective: 02-04 Identify elements of the competitive environment. Level of Difficulty: 2 Medium Topic: The Competitive Environment
Test-Bank-Management-10th-Edition-Bateman.docx