Explain how large firms with a lot of power can influence supply chain management.

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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In supply chain management, all of the firms in a particular supply chain try their best to cooperate with one another.  They are all trying to work together to reduce the cost of the end product as much as possible so that it can compete effectively in the market.

However, it is always possible that the firms in the supply chain could come into conflict with one another.  In that case, the larger firms could have more influence within the supply chain.  Since those firms are the largest, they are the most important to the supply chain.  It would, presumably, be hardest to replace them.  Therefore, they can use their relatively greater importance to put pressure on the other firms to go along with their wishes.

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