Bargaining Power of Customers Essay Example

Bargaining Power of Customers Essay Example Bargaining Power of Customers Essay Bargaining Power of Customers Essay Bargaining Powers of Customers Porters’ competitive factors theory is a framework for industry analysis and corporate strategy development. It draws an overview picture that industry rivalry is affected by five main forces, which are bargaining powers of customers, bargaining powers of suppliers, threat of new entrant and threats of substitute products. Relating Porters’ thesis and the topic of managing customers, element named bargaining powers of customers, which can be briefly understood as the ability of customers putting to put firm under pressure, is the most important.To be more details, customers who finally consume products has bargaining power refer to the potential of buyers to bargain down the prices charged by the firms in the industry or to increase the firms cost in the industry by demanding better quality and service of product. Strong customers can extract profits out of an industry by lowering the prices and increasing the costs. (Porter, 2008) However , in the 21st century economic context, customers do not only want low price but they also desire to bargain on other aspects such as delivery, supports and performance.Firgure 1: Porters’ Five Competitive Factors Applying Porters’ model to Microsoft, as a company provide software, Microsoft’s customers always demand convenience package of product with affordable price, provision of products, technical supports, products’ performance also efficiency, especially for the group of customers are business as well as enterprises, which can considered as strong customers having direct influence to the company (may be stock price on the market).As is known, human beings want is unlimited so it is easy to understand that customer can bargain on price and quickly delivery at the same time due to the century of technology also faster and faster pace of life. In addition, some customers totally concentrate on requirements of products’ quality and effectiveness in order to minimise the repeating operating expense. Unsatisfactory customers can boycott Microsoft, public bad feedbacks resulting in the customer loss, being defeated by competitors.Microsoft understand the importance of customers so it has provided many programmes with aim to fulfil customers’ needs and make a good deal with them. Customer and Partner Experience (CPE) is one of the most successful customers supporting program of Microsoft. Every year, this team conduct a survey world wide, namely Global Research survey, so as to update customers’ taste as well as expectation. Aiming at raising customers’ opinions, CPE team drives all account managers combining with sales roles to request customers fill out a form.Basing on these examinations, Microsoft sum up a net satisfaction points and put them as goals to improve in the next year. At last but not least, understanding the need of customers on immediately communicate with company, Microsoft have made many direct connection ways available such as hotline (Australian hotline is 13 20 58), social media (Facebook, Twitter), particular email addresses for each different product and Microsoft Connect. With a wide range of instantly communicate, customers can easily get support from Microsoft and their problems can be quickly solved.