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SafeBlend Fracturing

Shapiro, Benson P. ; Cespedes, Frank V. ; Zalosh, Alisa

Reference: HBS-914513-E
Year: 2013
Number of pages: 12
Geographic Setting: United States
Publication Date: Sep 23, 2013
Fecha de edición: May 28, 2014
Source: HBSP (USA)
Type of Document: Case
Industry Setting: Electric power generation;Natural gas;Electricity, gas, water & wastewater

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Description

The CEO of SafeBlend Technologies must set a price for the company's environmentally friendly fracturing fluid additive. The firm is negotiating a new contract with its biggest client, Bristol Natural Gas. For the past two years, SafeBlend has been the sole provider of additives to Bristol due to aggressive negotiation and limited competition. New competitors are entering the market, and the CEO believes one competitor is prepared to offer Bristol a chemical-free additive for 50% less per gallon than SafeBlend. Anticipating lower bids from competitors, he considers reducing the price in the new contract to maintain the relationship with Bristol-despite the impact on revenue. However, the competition may not be able to supply enough additive to meet all of Bristol's needs, so he also considers the impact of setting a more competitive and profitable price that assumes losing only a portion of Bristol's business.

Keywords

Analytics Competitive advantage Competitive bidding Customer relationship management Energy Environmental sustainability Industrial marketing Marketing Negotiation Pricing Pricing strategy Sales Technology