DSpace at Khazar University

h. Determining customers who can change their purchase from one seller to
another.
These forces can determine the ability of customer's negotiation power. So we
should consider to powerful customers to collect information.
Existing competitors:
Industrial distributors provide spare parts and raw materials like investment
markets and companies' powerful distributors can decrease the interest of industries by
increasing prices.
They can also influence purchasing industries by threat to increase the prices and
decrease in quality.
Their power is bigger in the following cases:
a. When there is limited number of distributors
b. There is a limited number of similar goods
c. Distributors aren't dependent to purchasing industries to increase the sale.
d. Distributors know that purchasing industries need their services and products to
produce goods.
e. Producers produce a variety of goods and purchasing industries are ready to pay
more for some other goods.
f. Distributors have acted in a way that substituting distributors is difficult.
g. Distributors can try to expand their products easily to compete with previous
purchasers.
Combination of the above factors will show the power of distributors and should
be considered in collecting information.
The most important effects of high competition are as follow:
a. Slow industrial development
b. High constant costs
c. Lack of variety of product
d. High number of competitors
e. Large number of obstruction of output
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