Investigating the Bargaining Power of Buyers in Assam Silk Industry-a Critical Analysis

Abstract

Bargaining power of buyers is a very pertinent component to understand the competition in any industry to make effective strategic decisions. This study is an attempt to analyze the bargaining power of buyers in the Assam silk industry which holds a significant position not only in India but across the world because of its unique and quality products. Data were collected from 80 number of Assam silk sellers from Sualkuchi area of the state of Assam in India by focus group interview method through open ended unstructured schedule. The content analysis method is used for the study using Porter’s five forces framework. The findings indicates that there is existence of high bargaining power of buyers as there is availability of numerous silk substitutes at cheap price easily available at silk market of Assam with less distinguishing features, designs, texture and colours. Moreover, it is found that there is less or no switching cost for Assam silk customers and easy backward integration. As a result, the Assam silk industry is becoming less profitable and attractive for these customers who are highly price sensitive. In this regard, the Assam silk industry stakeholders and policy makers should undertake defensive strategies to mitigate the bargaining issues and offer quality products & services at lower prices to customers to sustain this age old industry