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BLUE LABEL INTEGRATED ANNUAL REPORT 2015
UNDERSTANDING MATERIAL MATTERS
CONTINUED
Risk
Context
Mitigating factors
Elimination of
the middle
man
In most industries a
wholesaler is at risk of being
eliminated from the supply
chain if the supplier has the
infrastructure and capabilities
to supply the customer
directly.
From inception, the objective of the Group was to
become a one-stop destination for the supply and
distribution of all of the mobile networks’ offerings.
This would provide both convenience and efficiency
to the retailer and customer. Furthermore, the
technology and footprint developed by the Group
allows retailers to earn additional revenue by
introducing additional products. This would make
it difficult to disintermediate the Group.
No single network can offer this complete solution.
The introduction of the sale of prepaid electricity
tokens, and its phenomenal uptake in South Africa,
strengthens the Group’s foothold as a one-stop
destination that is most convenient to the retailer.
The Group’s increasing bouquet of products and its
neutral aggregation thereof will continue to ensure
that its middle-man status as distributor is essential
to the retailer and will remain entrenched. The
Group will continually develop and upgrade new,
innovative products to strengthen the foundation of
its middle-man status. Many merchants have limited
cash flow; however, utilising the Group’s vending
solutions allows them to vend products and services
which they previously could not afford. The lack of
affordability was due to various complexities, such
as managing stock levels, obsolescence, pilferage at
store level, inability to order small quantities and
access to limited stock ranges.
Also, the addition of such products and services,
and a growing suite of products, necessitates that
the Group not only excels in the sourcing,
management and delivery of these products and
the management of relationships in its merchant
base, but simultaneously delivering an excellent
supporting back-office capability – including the
ability to deliver and manage reconciliation and
settlement on behalf of its customers, extensive and
professional merchant support services, and deep
technology support for online and integrated
systems. These competencies make it even more
difficult for the Group to be disintermediated,
because of the significant value that it provides
to merchants, not only in the products and services
it delivers, but also in respect of the increasingly
complex back-office support functionality required
to deliver such services.
The Group is an aggregator and an enabler to both
its customers and suppliers.