The bargaining power of buyers is identified to be weak in this segment. Blackmores has mainly focused to create product differentiation through its focus on quality and its competitors have altered its focus towards cost differentiation. This has varied the customer minds in terms of their loyalties and interests. However, this industry appears to be safe to them because the customer diversity is evident. There is also no issue in terms of resale.
The retail stores and distributors face considerable bargaining power as they were able to fulfil the shelf space as allocated for the brand Blackmores. Because of the market management power of Blackmores, the brand was able to establish a quality relationship with the local retailers and distributors.
Perhaps, the influence of buyers has always been positive for Blackmores as they do not depend on direct selling channels and this has even contributed to about 57% of revenue (RSM, 2016).
Bargaining power of suppliers
Similar to bargaining power of buyers, this aspect is also weak by nature because there are several suppliers who sell homogenous products with relatively similar commodity products and limited differentiation aspects. This is considered as a growth industries where the suppliers strongly rely on these companies to maintain good business and trading.
Suppliers tend to support forward integration as they encourage diverse client portfolio. There are only logistical issues. As a result, industry gets the chance to shop across suppliers (RSM, 2016). The supplier products stand as the backbone to this sector.
This implies that Blackmores is not in need of high input, but high understanding about the needs of customers.