Porter argued that a company could sell to powerful buyers and still earn above-
ID: 388192 • Letter: P
Question
Porter argued that a company could sell to powerful buyers and still earn above-average profitability only under what conditions?
it is a low-cost producer in its industry or its products and services could be differentiated
it is a low cost producer in its industry
its products and services could be differentiated
it could successfully employ the experience curve strategy
it is a low-cost producer in its industry or its products and services could be differentiated
it is a low cost producer in its industry
its products and services could be differentiated
it could successfully employ the experience curve strategy
Explanation / Answer
ANSWER: it is a low-cost producer in its industry or its products and services could be differentiated
An example of this is Emerson Electric which earns high profitability because of low cost manufacturing, which allows it to undercut competitor prices. If the company is not a low cost producer or does not have a differentiated product offering, then it should sell only to less potent customers, instead of selling to large customers, in which it becomes the more vulnerable, as the more it sells.