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Its product is unique or at least differentiated, or if it has built up switching costs. Switching costs are fixed costs buyers face in changing suppliers. Such as a buyer has invested heavily in specialized ancillary equipment or in learning how to operate a supplier’s equipment, or its production lines are connected to the supplier’s manufacturing facilities.

It poses a credible threat of integrating forward into the industry’s business.

The industry is not an important customer of the supplier group. If the industry is an important customer, suppliers’ fortunes will be closely tied to the industry, and they will want to protect the industry through reasonable pricing and assistance in activities like R&D and lobbying.

Actually, successful top mobile manufacturers care every details of cooperation with their main suppliers. Take Nokia as an example, close cooperation with customers and suppliers is one of its core development principles. It allows end-to-end efficiency and speed – key success factors for the entire supply chain. While openness and trust are important aspects when working together with suppliers and driving compliance, Nokia requires that all products and services sold under the Nokia brand be sourced according to practices which uphold internationally accepted standards. These sourcing practices also need to comply legally with human rights and workplace practices throughout the value chain. Nokia is constantly developing its processes and overall supply-demand network set-up to efficiently meet this growing demand. Through regular supplier assessments, Nokia use to promote good performance of suppliers and also to monitor their compliance. maintains management accountability for achievement of these goals. Motorola endeavors to conduct business in compliance with law and widely accepted norms of fairness and human decency (From Motorola Code of Business Conduct40), and looks to its Suppliers to act in a similar manner. These principles are as follows: compliance, anti-corruption, no unfair business practices, anti-discrimination, no forced labor, no-child labor, freedom of association, fair working hours and wages, safe and healthy working condition and environmental sustainability.

Generally speaking, the tremendous upstream factories can ensure sufficient supply of goods, however, the leap of applying new technologies used to disturb the normal rhythm of goods delivering, and thereby to block new handset launch under plan. To iron smooth the possible fluctuation of upstream supply, leading handset manufactures have already been strengthening administration on suppliers to establish solid foundation for stable quality of goods, sustainable development and mutual-benefit in the future. Attentively, neglect of building mutually strategic cooperation with upstream suppliers will lead to out of stock on key hardware sometimes and thereby loss of advantageously marketing opportunities.

Section 4. The threat of substitutes

The substitution effect occurs when the price of a good falls and the consumer substitutes more of this product for othe本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。