Operating in the discount market segment requires good cost control to protect and increase margins. The group’s decentralised vertically integrated business model provides significant influence over, and in-depth knowledge of the entire supply chain (from raw material input cost to end-consumer delivery costs), enhancing the group’s ability to manage costs, thereby protecting margins.
Global purchasing power and scale of operations have allowed the group to benefit from its ability to source and produce in bulk quantity, negotiating long-term, competitive agreements in order to decrease fixed overhead costs and increase volume and other supplier rebates. Active involvement in the supply chain further provides assurances as to the quality of products, while ensuring availability of products and raw materials and timeous delivery.
Maintaining flexibility between sourcing and manufacturing remains key in the group’s ability to effectively manage its product range and pricing strategy.