Question

Business Case situation: You have decided to explore the idea of opening your own pet food and supplies retail store. You have 10 years of retail management experience, a college diploma in business and a strong love for animals. You currently live in the Toronto area – but are willing to move. You are leaning towards serving the higher end of the market – but are not sure. You want to provide a good range of products, maybe focused more heavily on higher quality goods that cater to other pet lovers like you. At the same time, however, you know the value of a dollar and that everything seems very expensive. You are a bit unclear on the specific direction you should take. You know that a great deal of research and analysis is needed to better understand the opportunity, formalize your mission/goals and shape your business. Your research will also help inform how your business may grow. You also know that at the end of the day, you may need to make very important assumptions – some of these at a very high level. Indeed, you know from your time as a student that the perfect set of relevant research may be unavailable or incomplete.

Please create a market analysis for a business plan (500-750 words)

Answer 1

Five Forces Analysis:

Bargaining power of Suppliers - Many suppliers in this segments offer low cost services which means bargaining power is less for suppliers.
Bargaining power of buyers- Since new organisation operates either in perfectly competitive market or Oligopolistic market across globe, buyers have higher choices and hence higher power.
Threat of New Entrants- Since new entries from lowcost generic service providers can eat up market share due to ease of taxation and licensing, threat is higher substantially.
Threat of rivalry between existing firms- This is comparatively very high as margins are wafer thin and innovation is constantly evolving making it difficult for the industry as whole.
Barriers to entry- Large initial investment, high marketing and distribution spends, constant innovation are biggest barriers.

Pestel Analysis :

Political - Canadian government bureaucracy and is amongst the most errant markets with high taxation and compliance and warfare tensions.
Economic - global economic degrowth and stagnant growth in mature markets is cause for worry.
Socio cultural - changing consumers preference and strong core culture is what has coped up with and reoriented itself across global markets to stay ahead of curve.
Technological - Wide-spread innovative solutions from competitors like Zomato and Uber eats have eaten up profits and scaled their innovative solutions to delivery using heavy discounts . However this company has been fast mover and easily stays ahead of curve with its unparalleled premium segment and upscale technologies which competitors match too lately.
Legal- the recall of licenses by Food administration agency for non compliance can be highest litigation based loss because of malfunctioning and lack of quality checks and also copyright infringement issues with other competitors in marketplace make it very cumbersome and difficult to deal with.
Environmental - the organisations has been keen ethical player and truly abides environmental laws.

Strengths

Global brand image
Economies of scale and cost leadership
Highest patent growth
Innovation and design capability

Weakness

High dependent on local talent
Product cannibalization due to less differentiation
Focus majorly on high prices and premium segment

Opportunity

Tieups with credit card compamies for heavy discounts
Focus on rural markets
Focus on low price segment
Focussing on diversified products

Threat

Generic services and hypercompetition
Uncertainty in government policies
High taxation
Retail markets collaboration with low cost players and private labels.