What is a characteristic of the 'many suppliers' strategy?

The 'many suppliers' strategy is characterized by emphasizing market competition. This approach involves working with multiple suppliers to create a competitive environment where suppliers compete for business, which can lead to better pricing, increased innovation, and improved service levels. The strategy helps businesses avoid dependency on a single supplier, thereby reducing risk and fostering a more dynamic supply chain.

When suppliers compete against each other, they are motivated to improve quality and efficiency in order to win contracts, which can ultimately benefit the buyer. This competitive landscape can also lead to greater bargaining power for the purchasing firm, enabling them to negotiate better terms, prices, and conditions.

In contrast, a strategy that focuses on building strong buyer-supplier relationships would typically involve fewer suppliers and a stronger commitment to collaboration. Options regarding purchasing based on quality and valuing supplier input also tend to align more with strategies that prioritize collaboration and partnership rather than competitive dynamics. Thus, the key aspect of the 'many suppliers' strategy is the creation of a competitive marketplace.