Relationship Marketing Strategy and implementation

The supplier and alliance market domain 219

Greater Certainty

• Greater certainty can allow you
  to set your prices to your
  customers more aggressively


• Utilize your capacity better


• Drive down your fixed costs per
  unit


• Make you more competitive

VALUE CHAIN –

Ni to AUTO

SUPPLY CHAIN CRITICAL ISSUES

• Fixed prices can only be provided on
  commitments to purchase fixed volumes


• The longer the advanced notice of future
  demand the greater the opportunity to
  provide attractive pricing solutions


• Uncertainties force the inclusion of safety
  cushions in all the pricing throughout the
  value chain


• Better communication reduces the need for
  safety cushions in prices and makes
  everyone's product more competitive
  
  
  • Transvaal Nickel Mines' LME expertise
  
  
  • strategies to benefit from Ni volatility
  
  
  • facilitate fixed price quotations
  
  
  • minimize financial exposure flr & clg
  
  
  • Transvaal Nickel Mines' size allows it to
    receive preferential treatment from LME
    brokers
  
  
  • Access to greater market knowledge
    than any individual industrial user
  
  
  
  

Commercial Needs

TNM sellsbased on

LME price

purchasesSVM

nickel atvariable

price

TURBOCOseeks fixed

price fromALLOYCO

TRANSCOseeks fixed

TURBOCOprice from

seeks fixedCARCO

price fromTRANSCO

seeks fixedCustomer

price fromCARCO

DEMAND & COMMUNICATION

priceFull

exposure

prices toHigher

exposureoffset

prices toHigher

TURBOoffset

price

prices toHigher

TRANSCOoffset

price

Figure 3.3.2 (continued)