What is the bargaining situation like when fabric suppliers have developed stylish designs?

The situation where fabric suppliers have developed stylish designs reflects a scenario in which the suppliers possess moderate bargaining power. This is because when suppliers introduce unique and desirable designs, they create a differentiation in their offerings. This innovation can enhance their perceived value in the eyes of manufacturers, particularly those in fashion-oriented industries like Lululemon.

As suppliers carve out a niche with fashionable fabrics, manufacturers may become more reliant on these innovative materials to meet consumer demand for style and quality. This reliance grants the suppliers a degree of bargaining power, as manufacturers need to negotiate terms that may favor the innovations provided by these suppliers. They may seek exclusive agreements or more favorable pricing to secure these stylish fabrics, thus increasing suppliers' influence over negotiations.

In this context, the presence of stylish designs acts as a leverage point, allowing suppliers to command better terms due to the added value they bring to manufacturers' product lines. Therefore, moderate bargaining power of suppliers accurately captures this dynamic in the marketplace.