Questions & Answers Section Given in HKICPA Seminar on 23 Jun 2012

Question 8:
Across different industries or within a particular industry – the structure of the value chain can be different – That is, some suppliers can have greater bargaining power than others. What will be the driver that causes some suppliers to gain more bargaining power over their buyers in the future? On example, is a supplier we met at a Shanghai expo that makes carbon heat sinks that covers the electronics in the mobile phone. This supplier is the one supplier in the world with this technology. No one else has this technology. This is an example of a supplier that has tremendous bargaining power. In the PCB space, there is another supplier out of Swiss land who makes flexible PCD boards that are integrated into the cover of the electronics item. This supplier has as they noted "a Swiss brand with the Chinese price".

Some of the drivers are associated with having a CEO who has either worked or is educated overseas; such CEOs are likely to have a stronger vision of a dominant strategy the firm should follow, which is needed in order to make the big technological push amongst an uncertain environment. Such leadership and strategy is critical in order to focus and overcome distractions of various opportunities that may outside the firm's core competencies. It is this dominant and focused strategy that will win out in terms of attracting large multinational buyers.