The Role of Supplier Power and Market Rivalry of Rice Vendors Profitability: Evidence from Cabanglasan, Bukidnon, Philippines

Abstract

Rice vendors play a crucial role in underpinning local food security and local economies, but they operate under persistent market pressures. However, quantitative evidence from rural municipalities on which competitive forces most shape vendor profitability remains scarce. Guided by Porter’s Five Forces, we focus on the two forces most salient to micro-retailers—supplier power and rivalry—because these are directly observable in day-to-day transactions and can be measured using available field data. We administered a modified survey to all licensed rice vendors in Cabanglasan, Bukidnon (N = 36; census), and estimated multiple linear regression models of profitability. Supplier power significantly predicted profitability (β = 1.305, p < .001), whereas rivalry did not (p = .117). Vendors reported mitigating horizontal competition through product and service differentiation, credit extension, and reliability cues, consistent with the non-significant rivalry effect. Results indicate that profits are more sensitive to upstream bargaining conditions—purchase prices, delivery reliability, and credit terms—than to peer competition. Policy and managerial efforts that strengthen supplier relationships, diversify sourcing, and improve terms of trade may therefore yield larger and more immediate gains in profitability than rivalry-focused tactics. By isolating the two most actionable forces for microenterprises, the study contributes context-specific evidence to the Five Forces literature. It offers a practical lever for local governments, cooperatives, and vendor associations seeking to stabilize margins in the staple food retail sector. Future work can extend this design to the remaining forces (buyer power, threat of substitutes/entrants) to test external validity across different market structures.