MSB has no vertical linkage, as the firm only purchases from the manufacturers and sells to the retailers. So if the product price is changed, MSB is affected most because he has no control over the demand and supply of his products. In order to minimize geographical risk MSB have located his store houses in different locations. The main risk in fertilizer trading which MSB faces is that an inadequate or lower than expected supply of fertilizer is imported from abroad, thus causing the firm to be unable to deliver and meet its customers‟ demand. A shortage or dearth in the supply of fertilizer in the peak season could be damaging to the business of the company.
A business relies on timely supply of products from their suppliers. This determines a business ability to avail their products and services to their final end users which would determine their success in the market in terms of sales. The firm (s) reliance on import from external suppliers exposes the business to supply disruption and low quality products from third party. However, due to long-term relationship with suppliers, the firm enjoys lower rate than its competitors.