6.1.5—Competitors and suppliers

Competitors influence price, differentiation and customer expectations; suppliers influence input cost, quality, reliability and bargaining power. Both are part of the business environment.

The effect depends on concentration, switching costs, contracts, substitutes and the firm’s ability to differentiate or develop alternatives.

A restaurant with one critical ingredient supplier is exposed to disruption; a competing menu and multiple approved suppliers can increase resilience.

A competitor is not every firm in the industry, and supplier power changes with time and market structure.