Low differentiation in the
products of the company and
its competitors, for example
in the case of commodity
Low switching costs for
the customer in the case
of a supplier change
High availability of substitutes:
substitutes are available or customers
have sufficient knowledge of
alternative suppliers or materials
High significance of the sale of
the company, which means the
purchasing volume of a customer
makes a high proportion of total
sales of the company
Low impact of
the product on
cost position or
differentiation of
customers
High customer concentration: Oligopolistic
(or even monopolistic) market structure at
the customer leaves the company little
alternative outlets and makes it easier for
customers to enforce low prices.
High risk of backward integration: The
customer can credibly threaten to even
produce the corresponding products