SafeBlend Fracturing

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Case Brief #1: SafeBlend Fracturing Student’s Name University Affiliation Date Abstract There is a need for the Chief Executive Officer at SafeBlend to set the price in the company’s fracturing additive as well as offer alternatives to clients to differentiate itself from competitors. SafeBlend is negotiating a contract with their largest customer which is Bristol Natural Gas. Due to the limited competition and heated negotiations in the last two years, SafeBlend has remained the only supplier of additives to Bristol Natural Gas. However, there has been a new entry of competitors some of who offer Bristol Natural Gas additives that are not only chemical-free but also cheaper by 50% for every gallon compared to SafeBlend. The CEO at SafeBlend anticipates the lower bids from SafeBlend’s competitors. As a result, he considers reducing the price offered to Bristol Natural Gas by SafeBlend as well as maintain a relationship with Bristol, the impact on the revenue notwithstanding. Nevertheless, SafeBlend is at an advantage since they can supply enough additive to meet all the needs by Bristol Natural Gas in comparison to the competitor. As such, SafeBlend considers setting a profitable and competitive price that will assume the loss of only a small portion of the business to Bristol Natural Gas. Problem Statement The case on SafeBlend Fracturing states that there has been a significant growth in the gas sector involving hydraulic fracturing with the period between 2000 and 2006 recording an annual growth rate of 17 percent. By 2035, Shale Gas and Hydraulic Fracturing are expected to contribute to 47% of the United States total natural gas supply. SafeBlend has

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