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12 Mini-Case

PotashCorp's prospects over the coming years depend on factors like global fertilizer demand, competition levels, and the company's ability to manage costs and expand operations. Potash prices are volatile due to imbalances in global supply and demand, regulatory changes, and currency fluctuations. While long-term potash consumption is expected to increase with population growth, short-term price volatility is likely to persist depending on supply, demand, regulations, and other market dynamics. The entry of large mining companies like BHP will increase competition and potentially lower prices, but the actual impact will depend on their operations and overall market conditions.

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433 views

12 Mini-Case

PotashCorp's prospects over the coming years depend on factors like global fertilizer demand, competition levels, and the company's ability to manage costs and expand operations. Potash prices are volatile due to imbalances in global supply and demand, regulatory changes, and currency fluctuations. While long-term potash consumption is expected to increase with population growth, short-term price volatility is likely to persist depending on supply, demand, regulations, and other market dynamics. The entry of large mining companies like BHP will increase competition and potentially lower prices, but the actual impact will depend on their operations and overall market conditions.

Uploaded by

LeLoveNe
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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1. What are PotashCorp's prospects over the coming years, and what is its true value?

The prospects for PotashCorp in the following years depend on a number of factors, including the
demand for fertilizers globally, the level of competition from other producers, and the ability of the
company to manage costs and expand its operations. The true value of PotashCorp will depend on
elements including its financial performance, market share, and growth potential, as well as broader
trends in the economy and industry.

2. Why are potash prices so volatile?

Potash prices volatile for a variety of causes, such as an imbalance between global supply and demand,
changes in governmental regulations, and variations in currency exchange rates. The potash market is
also relatively fragmented, with only a handful of significant manufacturers controlling a sizeable portion
of the global supply, which can lead to more volatile prices.

3. Will they ever settle down? If so, at what level?

It is challenging to forecast whether and at what level potash prices will stabilize in the future. The long-
term trend for potash consumption is predicted to be favorable due to population growth and increased
food demand; but, short-term price volatility are likely to persist. The dynamics of global supply and
demand, the efficiency of the supply chain, and changes in laws will all have an impact on the level at
which potash prices stabilize.

4. How should PotashCorp manage its production and marketing of potash?

Cost effectiveness, product quality, and customer satisfaction should be prioritized by PotashCorp's
management when producing and marketing potash. The company should also invest in research and
development to improve its manufacturing processes and develop new products to meet shifting
consumer wants. PotashCorp should build strong relationships with its customers and distributors in
order to guarantee efficient and reliable product delivery.

5. How will the entry of mining giants like BHP affect the potash market?

By entering the potash market, large mining corporations like BHP will likely increase competition and
perhaps lower potash prices. However, how much of a difference BHP's entry will make will depend on
both how large and productive its operations are and general market fundamentals like global supply
and demand imbalances. PotashCorp needs to keep an eye on market changes and adjust its production
and marketing tactics as necessary if it wants to stay competitive.

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