Page 17 - CIMA MCS Workbook February 2019 - Day 1 Suggested Solutions
P. 17
SUGGESTED SOLUTIONS
Based on the overall picture their bargaining power is moderately strong. Brands such as
CROWNCARE have generated customer loyalty by quality, reputation and by offering value
for money based on these aspects to combat the threat.
Power of suppliers – (relatively weak) susceptible to the fortunes of the industry, the
relatively few suppliers that do exist protect both the industry and patients’ interests via
reasonable pricing and ploughing resources into research and development and lobbying.
This takes away much of suppliers’ bargaining power. The practices will choose the
suppliers that do the best job, have the best price but also place great emphasis on quality
and reliability as delays in the supply of dental materials can have a serious “knock on”
effect on the profitability and reputation of the practice. The bargaining power of suppliers
in the industry is relatively weak
These frameworks can be used in several ways:
To help management decide whether to enter a particular industry segment or market.
To influence whether to invest more in an industry e.g. it is important to know whether the
investment costs will be recouped.
To identify what competitive strategy is needed, establishing the factors driving profitability
in the industry. CROWNCARE will need to maintain its current profitability to maintain
business and investor (present and future) confidence.
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