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Pet Smart


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Pet Smart

  1. 1. “Every Pet, Every Parent, Every Time”<br />Trinity Autumn Stone<br />
  2. 2. History <br />Founded in 1986 by Jim and Janice Dougherty <br />In 1987, opened their first two stores in Arizona<br />PetSmart Charities, Inc., a nonprofit organization that’s dedicated to ending euthanasia and finding homes for homeless pets <br />Went “public” in 1993 on the NASDAQ market <br />
  3. 3. History <br />In 1996, PetSmart made their Internet debut<br />Added pet boarding services, PetsHotels in 2000<br />As of today, there are over than 1,192 pet stores in the United States, Canada and Puerto Rico with over 184 in-store PetsHotel facilities <br />
  4. 4. The Vision of PetSmart<br />
  5. 5. What is PetSmart’s strategy?<br />To be the preferred provider for the lifetime needs of pets<br />Create differentiation that drives brand preference <br />Offer superior customer service <br />Focus on operating excellence<br />Grow our pet services business<br />Add stores and provide the right store format to meet the needs of our customers<br />
  6. 6. Internal Environment of PetSmart<br />Resources and Capabilities<br />PetPerks® - giving them direct insight into the wants and needs of “pet parents”<br />
  7. 7. Internal Environment of PetSmart<br />Resources and Capabilities<br />Variety of pet services offered under one roof<br />Examples: <br /> PetSmart Grooming<br /> PetSmart PetsHotel®<br /> PetSmart Training<br /> PetSmart Doggie Day Camp℠<br />Banfield Veterinary Clinics<br /> PetSmart Charities<br />
  8. 8. External Environment of PetSmart<br />Threat of Substitutes<br />Warehouse clubs<br />Grocery stores<br /> Specialty pet supply stores<br />Independent pet stores<br />Veterinarians<br />E-commerce retailers<br />
  9. 9. External Environment of PetSmart<br />Rivalry<br />Large amount of competitors creates intense rivalry for PetSmart<br />Establishing a strong identity<br /> Creating brand loyalty <br />
  10. 10. Business Strategies<br />Convenience<br />generally located at sites co-anchored by strong destination mass merchandisers<br />In or near major regional shopping centers<br />Also engaged in an ongoing expansion program, opening stores in new and existing markets<br />
  11. 11. Business Strategies<br />Differentiation<br />Wide variety of product lines<br />Store exclusive brands<br />Martha Stewart Pets and GNC Pets<br />
  12. 12. Reconfiguring Value<br />Radically New Value Chain<br />In 2000, PetSmart evaluated their mission and vision and changed it<br />Changed from a warehouse mindset to a more service driven pet retailer<br />Expanding pet services<br />
  13. 13. First Movers<br />First movers in the pet industry in almost every service offered<br />PetSmart Charities <br />Veterinary Services<br />Pet Training <br />PetsHotels<br />
  14. 14. Types of Diversification <br />Vertical Scope <br />Adding pet services to their existing business structure<br />Subsidiary companies of PetSmart<br />Provided the company with increased control and power in the market<br />Fortunate in the successes of the integrations<br />
  15. 15. Types of Diversification <br />Geographic Scope<br />Acquired an established pet retailer in the United Kingdom<br />Eliminated some of the start up risks in the market<br />“Bit off a little more than they can chew." <br />Opened new stores in the Canadian market<br />Eight stores <br />Ontario Market<br />
  16. 16. CAGE Framework<br />Cultural distances<br />PetSmart chose to enter markets with a similar culture as the U.S. market<br />Value of having a pet<br />Language and social norms<br />Administration distances<br />European Pet Food Industry Federation<br />European Union <br />
  17. 17. CAGE Framework<br />Geographic distances<br />Locations of the stores purchased<br />Distribution centers<br />Possible shipping from U.S.<br />Economic distances<br />Consumer buying trends<br />Consumer incomes<br />
  18. 18. Entry Vehicles<br />Nonequity Vehicles<br />Opening the new stores in Canada<br />Licensing<br />Franchising<br />Equity Vehicles<br />Acquisition <br />Pet City Holdings, plc<br />
  19. 19. Alliances<br />In 2010, PetSmart teamed up with two major retail companies<br />Martha Stewart<br />GNC<br />Smart business move <br />Opened up different segments in the market<br />
  20. 20. Martha Stewart Pets<br /> “Exclusive Product Line Combines Martha's Dedication to Pets with Quality and Style”<br />Product line hit the shelves in June 2010<br />Expanded the pet accessory division<br />apparel, collars, leashes, bedding, feeding, grooming and bathing supplies <br />Products designed, tested and approved by Martha and her pets <br />
  21. 21. GNC Pets<br />Designed a dietary and supplement product line for dogs and cats<br />Targeted for health consensus pet parent<br />Partnership came from the customer requests<br />Demonstrates the shift in the view of pets by our society <br />
  22. 22. Acquisitions<br />Started acquiring companies in 1993<br />UniPet Distributors<br />The whole pet product warehouse idea got started with this company<br />Almost every year of business since 1993, PetSmart has been involved in an acquisition<br />
  23. 23. More Acquisitions<br />PetStuff, Inc in 1996<br />Pet Food Giant in 1996<br />Sporting Dog Specialties, Inc in 1996<br />Medical Management International, Inc (MMI) in 1999<br />PetsHotel Plus in 2000<br />
  24. 24. Creating Synergy <br />Adding the specialty product lines increased PetSmart market share and power<br />Increased their financial strength, especially during the current economic standings<br />Creating the alliances helped PetSmart gain access to others’ capabilities<br />
  25. 25. New Venture Creation<br />PetSmart started as an opportunity in 1986<br />Knowledgeable management staff <br />Constantly generating new “ideas” <br />
  26. 26. PetSmart’s Management<br />Multidivisional organizational structure<br /> finances, marketing, counsel, store operations, supply chain, real estate, human resources, and strategic planning and development <br />All divisional leaders report to the President and CEO <br />Bob Moran elected in 2009<br />
  27. 27. Changes in Our Economy <br />In 2008, our economy took a downward turn for the worse<br />“Great Recession”<br />Luxury market <br />However, pet industry seems to be unaffected the recession<br />
  28. 28. Recession<br />
  29. 29. Pet Industry Statistics <br />Total U.S. Pet Industry Expenditures<br /> Year                 Billion <br /> 2011                 $50.84 Est.<br /> 2010                 $48.35 Actual<br /> 2009                 $45.5 2008                 $43.2 2007                 $41.2 2006                 $38.5  2005                 $36.3 2004                 $34.4 2003                 $32.4 2002                 $29.5 2001                 $28.5 1998                 $23 1996                 $21 1994                 $17  <br /><br />
  30. 30. PetSmart Statistics<br />Reported strong first quarter 2011 results<br />Net income of $71 million on $1.5 billion in revenues, with earnings up 33%. <br />12% dividend yield, based on closing stock price of $45.37 as of 7/5/2011<br />
  31. 31. PetSmart’s Stock<br />
  32. 32. Recommendations<br />Be conscious of individual margins on sales of high and low end merchandise<br />Continue to track product trends with the PetPerks program<br />Monitor services that have outgrown their profitability or their marketability cause budget cuts may be looming <br />Explore new niche markets<br />
  33. 33. Sources<br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br />