Annual Integrated Report 2019

Bidcorp’s growth strategy Growth Succession planning Bidcorp’s ability to operate sustainably depends largely on the experience and skills of its management team and their succession plans. Any senior management departures or unavailability (due to death, injury, illness or other reasons) or technically skilled worker shortages could adversely affect Bidcorp’s operational performance. How we respond With a robust and signi cant global footprint, international opportunities are provided to those eager for career progression. Skillsets existing across the group could be used in other group businesses should the requirement arise. Experienced management skills within the group are demonstrated through continued annual growth. Each management team is encouraged to grow and mentor high-potentials within their team to ensure a strong succession plan exists. Intense competition Foodservice distribution is highly competitive, with low barriers to entry. Pressure on key customers is increasing due to challenges in the macro-economic environment. Changing consumer tastes, preferences and loyalties have heightened the risk of consumers shifting their preferences to competitor products. Customers switch suppliers easily for lower priced, differentiated products or perceived better customer service. How we respond The cost of switching for local customers is very low as are the barriers to entry in this industry, therefore customer relationships and engagement is key to differentiate. However the bene ts of scale in a national business do create barriers to entry. The group structure being decentralised, provides the ability to compete at a local level with the bene ts of procurement scale, enhancing our competitiveness. Each local Bidfood operation also has access to a global platform, enabling teams to present new culinary trends, unique product ranges and introduce a variety of cuisines. We continuously monitor external market trends and collate consumer and customer insights to assist in the development of category and brand strategies. Third party “group purchasing organisations” (GPO) Some customers purchase via third party GPOs in order to reduce prices paid on foodservice orders, which then in turn results in the GPOs placing pricing pressure on us. Some GPO memberships have recently included smaller, independent restaurants. How we respond We offer innovative, real-time engagement with our customers through our bespoke industry leading ecommerce solutions. We are small enough to be agile and meet the most demanding requirements; but global enough to source even the most hard to nd products. Fundamental to our success is the strength of the real personal human connection we strive to develop with our customers which generates loyalty and appreciation for the personalised service excellence which sets us apart. What it may mean to us • Loss of key members of management • Loss of customer and supplier relationships due to loss of a team member • Group sustainability What it may mean to us • Dampened customer orders • Margin erosion • Increased competition reducing pricing What it may mean to us • Loss of customers due to competitive pressures • Increased competition reducing market share • Margin erosion Own brand “Cooking with…”, Bidfood South Africa. 14 / Bid Corporation Limited Annual integrated report 2019