Which force in Porter's Five Forces refers to the pressure suppliers can exert on a business?

The correct answer, which refers to the pressure suppliers can exert on a business, is the bargaining power of suppliers. This force in Porter's Five Forces framework assesses how much influence suppliers have over the prices they charge for materials or services. A high bargaining power of suppliers means that they can demand higher prices or impose unfavorable terms on businesses, which can directly impact profitability.

When suppliers have strong control, they can limit the options available to businesses, making it challenging for those businesses to negotiate better terms or find alternative sources. This pressure can lead to increased costs and potentially reduced market competitiveness. Understanding the bargaining power of suppliers helps businesses strategize effectively in their supply chain management and pricing strategies, providing insights into how dependent they are on particular suppliers and how that might affect their overall business strategy.