Bargaining power of suppliers

How much of the value in a chain the suppliers can capture, which depends on how concentrated they are and how easily a buyer can switch.

An exporter spending 65% of its revenue on materials has handed most of the value away, and any move in input prices flows straight through unless it can raise its own.

The measurable proxies are input cost as a share of revenue, supplier concentration, and whether the input has a traded price. A commodity with a screen price is a weak supplier position; a patented component with one qualified vendor is a strong one.

Gross margin stability through an input-price cycle is the empirical answer.