Continuing with the content outline on the external forces that affect competition in the industrial sector, today we will relate how competition in the industrial sector is determined in part by the bargaining power that customers have with the companies that produce the goods or services.

In product markets, two factors play a role in determining the strength of a company's bargaining power vis-à-vis its customers: price sensitivity and bargaining power. The main variables that define these factors are:

a) Customer concentration: Identify the number of customers who demand the most sales in the sector. If the number of existing customers is not high, the negotiation leverage is affected since they may demand more.

b) Volume of purchases: The higher the economic value of the purchases made by the customer, the better the conditions he can force his suppliers to accept.

c) Differentiation: The less differentiated the products or services are, the greater the bargaining power of customers. Differentiated products are those that the customer identifies by their design, brand and quality superior to others.

d) Information about the supplier: If the customer has accurate information about the products, quality and prices that allows him to compare them with the competition, he will have more important arguments in the negotiating power with the supplier.

e) Brand identification: It is the association that the buyer makes with existing brands in the market.

f) Substitute products: The existence of substitute products allows the buyer to put more pressure on prices.

Another force is the power of buyers, from which the powerful get more value at lower price with better quality by setting industry competitors against each other, with the objective of getting the most benefit from this, in this sense, buyers acquire more bargaining power when they are few in number and the volume of negotiations is large.

Taking into account the above, it can be said that customers can use their position and influence to exert pressure on the company, thus achieving better prices for them to the detriment of the company. Because of this, organizations must expand their customer portfolio in order to have a competitive advantage and reduce the risk of abruptly lowering sales when a customer decides to change companies.