Which factor can weaken the bargaining power of suppliers?

The emergence of contract manufacturers can significantly weaken the bargaining power of suppliers because it introduces more competition in the supply chain. Contract manufacturers often produce goods on behalf of multiple brands, allowing companies to source products from various manufacturers rather than being reliant on a single supplier. This increase in available sourcing options gives brands more leverage when negotiating prices and terms with suppliers. As contract manufacturers proliferate, suppliers may find it more challenging to maintain their prices due to the increased choice available to companies, ultimately reducing their bargaining power.

While stricter quality regulations might increase reliance on certain suppliers who can meet those standards, they do not necessarily weaken supplier power directly. High demand for generic brands typically empowers suppliers of those generic goods, while limited product options may reinforce specific suppliers' power because companies have fewer alternatives to turn to in the marketplace. In contrast, the rise of contract manufacturers directly impacts competitive dynamics, making it the most accurate factor in diminishing supplier bargaining power.