Part 1:
PetSmart Inc.’s Business-level strategies are somewhat similar to its corporate-strategies as they focus on the overall level of organizational performance. Distinct from its general corporate-level strategy, they have particular emphasis focus on certain ends instead of a vast category of businesses. PetSmart Inc.’s business units are in most cases individual enterprise-like enterprises which are oriented towards the industry, it product or service type and its market (Kozami, 2002). The business-level strategies in this case are primarily concerned with the management of unit activities in order to have them conform to the overall organizational corporate level strategies. This will sometimes include cooperation with subsequent business units towards the achievement of ‘strategic synergy’. It is also instrumental in the development of competitive advantage distinctive capabilities and resources in each unit. The strategies at this level are also crucial in the identification of product or service-market perceptions and opportunities through developing policies that seek to succeed in each. The monitoring of the independent the business industry environments in a way of having the strategies conform to various needs of PetSmart Inc.’s markets at different stages of its development.
Further, its business-level strategies focus on the business unit threats, weaknesses, opportunities and strengths through particular emphasis in strategies on the independence of products or services unlike the corporate level which focuses on the overall investment portfolio. Business-level strategies can therefore actively contribute to differences in corporate-level strategies. One of the business level strategies of PetSmart, Inc. is cost leadership where the organization competes for a broader customer base with extended dependence on its pricing. Price is based on internal efficiencies as a way of having a margin, which effectively sustains PetSmart, Inc. above the average returns as well as the costs passed onto the customer in a bid to have customers purchase its products. This has worked well as its products are standardized. It also has generic goods that are acceptable to a number of customers and are offered at the lowest prices. PetSmart, Inc.’s continuous efforts in lowering costs, which are relative to its competitors, are a necessary component in successfully maintaining cost leader. This includes building the state of various arts efficient facilities (making it even more costly for its competition to imitate), maintaining tight control and monitoring systems over overhead and production costs as well as minimizing the cost of service, R&D, and sales.
At the business unit level, the strategic issues are less about the coordination of operating units and more about developing and sustaining a competitive advantage for the goods and services that are produced. The strategy formulation phase at the business level deals with the positioning of the PetSmart, Inc.’s business against its rivals (Kozami, 2002). There are also considerations of the anticipation of changes in technologies and demand and the further adjustments of the strategy for the purposes of accommodating them. There is also much influence in the nature of competition as strategic actions including vertical integration and political actions (like lobbying) are indeed due.
Part 2:
PetSmart, Inc.’s corporate level strategy is essentially concerned with reaching the organizational set goals and objectives. This is done through defining the issues, which are within the scope of corporate responsibilities. These could include the identification of the overall corporation goals, the types of business engagements in which it is should be involved in as a corporation. It also acts as a way to integrate and manage businesses (Hoskisson, 2008). It is also interested in attaining and retaining a competitive contact through the definition of where the corporation competition needs to be localized. Focusing on its case on marketing, the corporation has clearly identified with its commercial pet products while most of its competitors are yet to. The PetSmart, Inc.’s corporate level strategies are also concerned with the management of activities and Business inter-relationships.
Here, the corporate strategy aims at developing sustained synergies through sharing and coordinating staff as well as other resources. This could also use various business units in complementing subsequent corporate business activities (Furrer, 2010). The concept of organizational synergy in PetSmart, Inc. through corporate strategy ensures that management practices within the corporation are decided based on how the business units involved are governed. The choices of action in this case will include through autonomous government (decentralization) which has heavy reliance on rewards and persuasion or direct corporate intervention (centralization).
At this level of strategic decision-making, PetSmart, Inc. will be involved in scanning of the competitor's advertisements, which reveals much about the competitor’s beliefs on issues of marketing as well as their target markets. In addition, a change in the advertising message of the competitor reveals new production processes or a new segmentation strategy. It also may reveal new product offerings, a new positioning strategy, a new branding strategy, line contractions and extensions or research within the industry (Hitt, Ireland & Hoskisson, 2008). PetSmart, Inc.’s strategic evaluation on its performance also aims at establishing indicators of the new pricing strategies such as penetration, product bundling, price skimming, price discrimination, joint product pricing, loss leaders, or discounts. By extension, corporate level strategies in this organization will indicate new promotion strategies such as push, short term sales generation, pull, balanced, appeals, informational, long term image creation, affective, comparative, new creative objectives, reminder, new creative concepts, new unique selling proposition, themes, and tone, or new advertising agencies.
Part 3:
A possible criterion in evaluating PetSmart, Inc.’s competitive environment is creating detailed profiles for each of its major competitors. The profiles in this case will give a thorough description of the competitor's background, facilities, finances, markets, products, strategies, and personnel. In a finer approach, this will involves assessing the competitor’s background in terms of location of offices, online presences, and plants, history (key personalities, trends, events, and dates) and ownership for purposes of organizational structure and corporate governance. In the financials category, not many of PetSmart, Inc.’s competitors have a high command of financial strength therein. This is because of assessing the competitors’ P-E ratios, profitability, and dividend policy, various financial ratios (such as liquidity, and cash flow), and its profit growth profile as well as methods of growth (acquisitive or organic).
The range and scope of pet products offered by PetSmart, Inc.’s competitors is relatively wide. The main considerations here are patents and licenses, reverse engineering, quality control conformance, brands (strength of brand loyalty portfolio, and awareness), new products developed, their R&D strengths, and success rates and products offered (product portfolio balance, and breadth and depth of product line). The marketing strategies employed by its competitors are fiercely bold and heavily invested on (Furrer, 2010). The elements of analysis for this include distribution channels used (indirect & direct), alliances, exclusivity agreements, and geographical coverage, segments served (market shares, growth rate, customer loyalty, and customer base), promotional mix (advertising themes, promotional budgets, sales force success rate, ad agency used and online promotional strategies), as well as policies on allowances, discounts, and pricing (Hitt, Ireland & Hoskisson, 2008).
Part 4:
In my view, there will be substantial variation in the application of cost leadership as a competitive advantage strategy in the cycle markets. In slow-cycle markets, capabilities and resources will be essentially difficult to imitate as products or services strongly reflect shielded positions in resource management. Therefore, various competitive pressures are not able to penetrate the company’s sources of profitability and strategic competitiveness (Furrer, 2010). This would mean that the company might develop a monopoly position or rather a unique grouping of product attributes as well as complex product designs.
For standard cycle markets, the company's organization and strategy will be designed towards serving high mass or volume markets. The main areas of focus in this case will on the market control and co-ordination especially in the pet product industries. The extended market dominance (and global leadership) is made possible through the continued capital investment as well as superior learning. In the end, it becomes rather difficult to establish thorough positioning in standard-cycle markets due to the competitive intensity. However, PetSmart, Inc.’s competitors are able to efficiently imitate the company's source of competitive advantage and hence, expand its level of competition (Hill & Jones, 2012). To this point, PetSmart, Inc.’s will be focus to create and sustain a competitive advantage among standard - and slow -cycle markets. This process will consist of entrepreneurial and launching stages, periods of exploitation, and periods of counterattacking in which there is an erosion of its source of competitive advantage.
In fast-cycle markets, the attempts of sustaining competitive advantages are based on various sets of resources as well as competencies, which may translate into competitive inertia. This could also result into the company having to nurture inappropriate competencies in which the position of the company position could be overrun through aggressive global competitors (Carroll & Buchholtz, 2011). Further, the fast-cycle markets require certain keys to successfully sustaining cost leadership as the lead competitive advantage through to taking particular steps and launching counterattacks before the erosion of the sources of the competitive advantage sets in. It is critical to keep in mind the fact that even as the strategies are developed at corporate level to suit the business in various competitive levels the focus on strategy implementation starts to come into focus. This kind of focus is particularly essential in the implementation process as gives the real insight of the solutions developed by the company.
References:
Carroll A., Buchholtz A., (2011) Business & Society: Ethics, Sustainability, and Stakeholder Management. New York: Cengage Learning
Furrer O., (2010) Corporate Level Strategy: Theory and Applications. New York: Taylor & Francis
Hill C., Jones G., (2012) Strategic Management: An Integrated Approach. New York: Cengage Learning
Hitt M., Ireland R., Hoskisson R., (2008) Strategic Management: Competitiveness and Globalization: Concepts & Cases. New York: Cengage Learning
Hoskisson R., (2008) Competing for Advantage. New York: Cengage Learning
Kozami A., (2002) Business Policy and Strategic Management. New York: Tata McGraw-Hill Education
