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. WhilePetSmart'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 (Chapter 6: Internal Analysis)
- To examine the strategies of differentiation and cost leadership in detail (Chapter 8: Business Strategy)
- To identify the role of implementation in strategic management (Chapter 10: Implementation)
- To examine the role of leadership and culture (Chapter 12: Leadership and Culture)
RELATED CHAPTERS
Chapter 1: Strategic Management, Chapter 6: Internal Analysis, Chapter 7: Long-term Objectives and Strategies, Chapter 8: Business Strategy, Chapter 10: Implementation, and Chapter 12: 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?