Case # 5 The Battle to be Top Dog –
PetSmart vs. Petco
CASE ABSTRACT
PetSmart and Petco are two retail
chains that dominate the $41 billion animal care industry.PetSmart is the
larger of the two with 908 stores versus 850 for Petco.PetSmart also has $4.5
billion in revenues in comparison to $2.2 billion for Petco.While PetSmart’s
prices are 11 percent lower on an average than Petco’s, it stresses the
services offered in its stores to boost revenues and profitability.Petco’s
strategy is to have smaller stores with more space for merchandise. Both
companies compete in the industry using a different strategic approach.
KEY POINTS
·
The need for
an internal assessment to formulate strategy
·
To examine
the strategies of differentiation and cost leadership in detail
·
To identify
the role of implementation in strategic management
·
To examine
the role of leadership and culture
DISCUSSION QUESTIONS AND ANSWERS
1. What is PetSmart’s strategy?
2. How does Petco compete with PetSmart
and other pet food stores?
3. How did PetSmart react to the tainted
pet food recall?
4. Why is
Petco slow to embrace the services strategy?
