These companies partly define their positioning in the market according to their bargaining power with those who supply them with inputs for the production of their goods. For example, the fewer suppliers there are, the greater their bargaining power, since they can easily increase their prices because they do not have as much supply of inputs.
In this post, I will present a very interesting topic such as bargaining power, meaning by bargaining power the actions that suppliers have.
In relation to competition in an industrial sector, competition is determined in part by the bargaining power that customers have with the firms producing the good or service. In product markets, two factors play a role in determining the strength of a firm's bargaining power vis-à-vis its customers: price sensitivity and bargaining power.
In this sense, bargaining power shows that companies in the industrial sector have a competitive advantage over other business sectors, because there are many customers and they have knowledge of the products offered by these organizations.
This is due to the bargaining power of the industrial sector vis-à-vis customers, when the opposite occurs, few customers, then these increase their bargaining power vis-à-vis the companies.
Another bargaining power factor is the competitive strength of the threat of possible substitute products, as it refers to the potential entry of companies selling substitute or alternative products to those of the industry, an example of substitute products would be carbonated beverages that could be substitutes or competition for mineral waters.