The Battle to be Top Dog – PetSmart and Petco

Discussion Questions and Answers

The essay below presents a discussion of the answers to the questions regarding PetSmart and Petco battle to market supremacy in the pet food industry.

What is Petsmart’s Strategy?

According to the case (paragraphs 3-4), the PetSmart organization has been described as more strategic. Unlike the Petco organization, PetSmart food store revolutionized the pet food business to become a global venture. Before the entry of the organization, the industry was undesirable and operated in small scale. However, PetSmart established large-scale outlets within the power centers to accord the industry the competitive edge. Moreover, the strategy involved the operations of discount chain stores hence the success.

Again, paragraph 6 notes that PetSmart avoided the warehouse store appearances as used by the major players in the food industry, such as Wal-Mart. In fact, PetSmart decided to embrace the style of reduced shelve contents and condensed store sizes. Furthermore, unlike the competing Petco, PetSmart could offer a large variety of services to the customers. For instance, pet owners enjoyed quality training, day care services, adoption, grooming, and pet hotels at their convenience (Para 6). Consequently, the services were shown to contribute significantly to the revenues collected by the organization, besides contributing to overall growth.

How does Petco Compete With Petsmart and Other Pet Food Stores?

The Petco Stores pioneered the pet-food industry. Therefore, compared to PetSmart, Petco enjoyed the advantage of dominance and was more competitive (Paragraph 4). However, Petco’s Stores have been smaller and were mainly situated in the strip malls. Another differentiating feature was that Petco invested in a broad selection of goods and services. Besides stocking the foods for cats and dogs, the store had other supplies such as hamsters and tarantulas for other animals. The pet foods occupied two-thirds of the total stock of the Petco stores. Petco stores had a limited range of services, including day care and grooming only (Para 10).

How did Petsmart React to the Tainted Pet Food Recall?

As indicated in the first paragraph, the US Food and Drug Administration recalled loads of tainted pet foods claimed to have been manufactured in China in 2007. Accordingly, the pet food sellers were greatly affected. For instance, in reaction to the recall, PetSmart was offended and removed all the affected foods from the display units. It also puts up information signs in all the stores beside hiring more personnel for customer care services. Moreover, the organization decided to compensate the buyers who had been affected by the compromised product and where necessary, intervened by paying for veterinary services to the affected pets. The other intervention measures include sending a warning and informatory emails to the customers to caution against using the tainted product and creating general awareness in the market (Para 2). As such, the reaction was customer-oriented, an aspect that served to improve customer loyalty and subsequent relations.

Why is Petco Slow to Embrace the Services Strategy?

The nature of Petco to embrace service strategies rather slowly could be explained by various factors. Firstly, the overall limited operational size of the stores presented the challenge of accommodating many customers and pets for services (Para 11). The size of 14,000 square feet could be contrasted with PetSmart’s store size of 20,000 square feet. Secondly, unlike PetSmart, which has public ownership, Petco is privately owned, and hence there is low pressure for growth (Para 12). Accordingly, the little incentive could be pointed towards the need to diversify in the form of services and food products as the rivals do. Finally, the perspective of the CEO of the organization that the country does not offer an attractive market for the pet services affects the adoption strategy (Para 12).

 

References

Case # 5 The Battle to be Top Dog – PetSmart vs. Petco

Narayanan, V. G., & Brem, L. (2010). Sniffing Out Opportunities at PetSmart. HBS Case, (110-025).