making them very powerful. b.Few substitutes exist for the product that is supplied, making the suppliers very powerful.c.Suppliers are dependent on the buying industry for sales and to make a profit, weakening their power.d.The tobacco industry definitely needs the tobacco growers service to survive, making the suppliers powerful. e.The tobacco growers (suppliers) do not have differentiation in their product. This weakens their power because the tobacco industry does not have to pay more for the tobacco because it is basically all the same. f.It is not costly to switch suppliers. Some companies choose to switch to a less expensive supplier in order to lower the cost of their products. This weakens the power of the suppliers.g.The suppliers can not easily vertically integrate forward and become their own customer because of the many costs in manufacturing tobacco.h.Overall, I believe the suppliers are highly powerful in the tobacco industry.Existing Industry Competitorsa. Overall, the growth rate of the industry is moderate. Tobacco consumption is rising rapidly in developing countries. However, in the U.S. cigarette consumption has been slipping by about two percent per year. This means that there is a moderate level of competition for the existing tobacco industry competitors.b.There is a mixture of fixed costs and variable costs associated with this industry. This keeps competition at a moderate level because the companies want to increase sales possibly by lowering costs and still earn a profit. c.There is a high level of product differentiation between tobacco industry competitors. For example: RJR Nabisco offers major tobacco brands such as Winston, Salem, Camel and more. Manufacturing many different tobacco products keep competition levels low.d.There are not many competitors, which means the total market does not have to be divided in many ways. There are eight well-known tobacco manufacturers in the world that each owns a good...
