Mergers & Acquisitions Should a firm attempt to have fewer or more suppliers?

It depends on the situation the client is in terms of availability of materials and such as well as the number of vendors out there. A firm should balance between not putting all the proverbial eggs in one basket by using only one or two vendors and using too many and thus making administration and logistics more complicated (eSmallOffice, 2013)(Entrepreneur, 2013).

The "sweet spot" is probably 3 or 4 vendors although it can be more if more are required to reliably get all the materials but less may be needed can provide what is needed on time and in a reliable fashion and at a good cost. In short, there shouldn't be more vendors than needed while...

However, if that small number of vendors are inconsistent and/or incomplete in their service, the problems can outweigh the benefit of the simplicity. Keeping more vendors is better because it diversifies the sources or goods and service and makes it easier to replace shortages and address problems found with other vendors. However, too many vendors causes complexity, requires constant re-evaluation to make sure…