CIPS Exam L4M2 Topic 5 Question 56 Discussion

Actual exam question for CIPS's L4M2 exam

Question #: 56
Topic #: 5

[All L4M2 Questions]

Which of the following will help the bargaining strength of a buyer?

The buyer has the option to make the product in-house

There are a limited number of suppliers available to the buyer

The buyer's switching costs are high

The buyer's spend is a high proportion of the supplier's revenue

A1 and 2 only

B2 and 4 only

C1 and 4 only

D2 and 3 only

Show Suggested Answer

Suggested Answer: C

1 (Make in-house): The ability to produce in-house reduces dependency on suppliers, strengthening buyer power.

4 (High spend proportion): A high proportion of spend gives buyers leverage over suppliers who are reliant on their revenue.

Limited suppliers (2) and high switching costs (3) reduce buyer bargaining power. Reference: CIPS Level 4, Market Power Analysis.

by Aracelis at Mar 23, 2025, 07:26 PM

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1 days ago

I think the answer is B) 2 and 4 only. The more limited the suppliers and the higher the buyer's spend, the stronger the buyer's bargaining position.

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