SafeBlend Fracturing

Name: SafeBlend Fracturing (English version)
SKU: 914513

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

Product #:914513

Supplier:Harvard Business School

Discipline:Marketing

Setting:United States

Details:Case (PDF) • 12 pages • 2013-09-23 (Rev: 2014-05-28)

Subjects:

Environmental sustainability Marketing Pricing strategy Competitive advantage Customer relationship management Business and society Sales and marketing Competitive strategy Customer experience Sales and marketing Marketing

Geography:

United States North America

Your Price:

$11.64

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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.

Learning Objectives

Understanding how a firm can quickly create-and then quickly lose-a competitive or differential advantage. Understanding the importance of account management and raising the issue of how client management may impact (either positively or negatively) long term competitive advantage. Understanding how pricing strategies may evolve in a highly competitive market. Understanding how creative specialties are created, and how they can easily turn into commodities. Understanding the subtle interaction between pricing and selling.