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Bargaining Power of Buyers

FedEx faces significant competitive pressure from corporate buyers in the overnight delivery market. This pressure is most evident in FedEx's relationship with large corporate clients. These buyers have a great deal of bargaining power attributable to the large volume purchases they make. Negligible switching costs also contribute to buyers bargaining ability in the market.

Buyers have a great deal of bargaining power because of the large volume of purchases they make from FedEx. Porter feels that purchasers of large volumes contribute significantly to the bottom line of businesses. For example, FedEx gained a lion's share of the catalog business because of their ability to offer these buyers lower prices than UPS.

A buyer group is powerful if it faces few switching costs. This competitive force definitely constrains FedEx. Buyers that decide to leave the FedEx brand could do so knowing that the costs would be negligible. The buyer's employees......

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Approximate Word Count: 610
Approximate Pages: 3 (250 words per double-spaced page)

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