Case –Zeta Case Harvard Case Solution & Analysis

Case –Zeta Case  Solution

QUESTION 1 (20 MARKS)

Potash Corporation of Saskatchewan’s (Potash Corp) business model:

The business model which every company has, isused to capture value for the company to prosper in the future. As capturing value is the main objective of the business model therefore, the business model of the company should be very comprehensive and should include many components which would mainly satisfy the customers’need and expectations. In case of Potash Corporation, specific analysis has been conducted to determine the accuracy and effectiveness of the company’s business model. This statement will become true when the major following factor indicates positive signs.
Strategic Choices
The company is the largest producer of the potash in the world,and it is targeting the mainstream users of potash. Potash is very useful for the cultivation of the vegetables and fruits. It is also used in the making of rice, wheat and other agricultural products as it purifies the agricultural products through water solutions. In the developing economies where the agriculture industry is growing and new technologies are be involve to improve and enhance the production, the need of potassium is very necessary for the agricultural growth, therefore the demand of potash is become very high globally.

The Potash Corporation is currently targeting the major economies specifically the US and Canada and due to the largest production facility it has made Canada the largest producer of potash. Since the demand of the fertilizer, feed, industrial products and purifiers is high and growing it indicates the scope of the company as well as its products is very good. Potash Corporation focuses mainly on the customers’attitudes towards the company. Furthermore, the slogan of the company indicates that the company is committed towards providing better quality product in better prices so that it can attract more customers.

For the value creation of the company, Potash Corporation believes that it can be only possible by improving two factors, which are customers and employees’ value proposition. The company invests in the capabilities and skill of the employees through corporate training and different workshops to improve the professional skills of the employees and performance based incentives are also provided by the company to achieve the objective. On the other hand, for customers, better long term relation is formulated by the company by not compromising on the quality of the product and meeting the requirements of the customer.

The company is providing competitive benefits to its employees such as higher salaries than industry average, pension funds, gratuities, medical allowances and education allowances therefore, the company can get competitive professionals from the market and these employees would make the company better by improving its operations and functions internally as a result,the company would have the core capabilities in-house within.

Value Capture

The pricing strategy of the company indicates that it has achieved the economies of scale and due to the large production facility, the company is successful in achieving minimum per unit cost. As the bulk production reduces the fixed cost per unit, therefore the company has increased its scale of production in order to reduce the cost. Hence, the company is able to negotiate better pricing with the customer base and major discounts can be given by the company to its customers as compared to its competitors that operate on small production scale.
The company produces commodities and the international commodities market is very volatile. The variation in the commodity market due to any market news or trends will heavily affect the company’s product range. The problem of fluctuation in the commodity market will affect the revenue of the company and profitability as well.
The company’s pricing strategy is common as in the penetration pricing, where the company provides higher quality product in such a low price. In order to achieve the lower price, the company should diversify its supplier base to reduce the dependency and improve the quality of the product....................

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