MGRM had no competitive advantage in its cost of supply. It did not own significant amounts of oil in the ground and the refineries run by Castle were old and inefficient. Instead, MGRM’s business plan laid out a marketing strategy based on longterm pricing.1 MGRM’s management believed that independent retailers required protection against temporarily high spot prices for their supplies. According to MGRM, spot price movements quickly impacted the wholesale price of refined oil products but not the retail price. While retailers attached to large integrated oil companies were able to ride out the temporary squeezes on margins, independent retailers often faced a severe liquidity crunch. And while retailers could buy products under contracts protecting them against these temporary price surges, MGRM believed these contract price terms were unnecessarily high given the recent history of spot prices.