1. With single-sourcing, how does the firm protect itself from price gouging? From strikes or interruptions...

1. With single-sourcing, how does the firm protect itself from price gouging? From strikes or interruptions to supply? Please discuss specific ways.

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1. With single-sourcing, how does the firm protect itself from price gouging? From strikes or interruptions to supply? Please discuss specific ways.

If a company helps a supplier reduce its price risks, it can demand some concessions in return and dodge price gouging
Small companies that don’t order through multiple units can form purchase consortiums with other firms in their industry to protect themselves against the monopoly of the suppliers
Companies should shift volume away from a powerful supplier, ideally by switching to a substitute or lower-cost product. The mere threat of this can increase the supplier’s openness to agree to company's terms
Companies should always focus on creating a new supplier to dodge future risks
Companies should make the supplier dependent on it, so that if suppliers of gouging the price, company can always withdraw its support, which may lead the supplier to perish

keosha answered 7 months ago

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