Internal Analysis of PetSmart Inc
Resources are considered to be operational incentive, which a business or an organization may have. Identifying with the PetSmart Inc. the resources that the business has are analyzed from the perspective of the tangibles and the intangible resources. According to Ulrich (2013), the choice of the tangible and intangible resources can best fit the description of the internal environment, which the organization has in terms of business management incentives.
Tangible resources
The domain of the tangible resources is filled with the resources that are seen and can be handled by the metric measures of resource performances. In this case, the tangible resources are the finances, the technology and the physical resources.
Financial resources
The analysis on the financial resources focuses more on the financial performance, which the company has had over the last three years. The emphasis here is the check on the revenues, the current or working capital, and the equity that the company has. Looking at the data availed on Google finance, the revenues of the company have been steadily growing from the year 2013. This is with the records of the $ 1,729. 13 million recorded in 2013 to the $ 1,913.79 million for the year 2015. Similarly, the profitability that the company has posted slightly improved to $ 596 million up from $ 512 in 2014 and $ 515 in 2013. Focusing on the equity that the company has had over the last three years, the trend shows a return in value on the shareholders equity based on the increasing retained earnings for the company up to 2015. In 2013 and 2014, they retain $ 2,335 and $2,408 respectively, which are values lower than those of the year 2015 at $2,540.72. This is shown as increased shareholder value and therefore increased share value based on the average of the common shares outstanding having settled at 100 over the last three years.
Physical Resources
The description of the physical resources is attached to the valuation of the land the manufacturing equipment and the offices equipment (Greene, Brush, and Brown, 2015). With the position that is shown with the PetSmart Inc., the valuation of the physical resources chooses to assess the values reported on equipment, land and bullrings similar to the depreciation that the units have. The net property plant and equipment for the company are decreasing steadily all attributed to the almost similar increasing depreciation for the company. This is to suggest that the physical resources of the company have yet to be replaced up from the year 2010. The following trend shows the drop in the net values of the PPE similar to the rise in accumulated depreciation.
Technological resources
The technological resources from the base from which the company is able to have a competitive advantage over their competitors. This is developed with the items of technical assistance that is offered by the company’s services as stated on their website (PetSmart, 2016). Similarly, this is developed with the large operations domain that they have with over 1,400 pet stores creating their presence both online and physically. The online presence builds more on their technological resources advantages; therefore, creating awareness for the company a move that marketing techniques approve of (Anderson and Eshima, 2013).
Intangible resources
Having defined resources as aids that generate values once exposited, the tangibility does not limit the use or the classification of the resources. There are intangible resources that are used in the measure of the interest that resources have without having to quantify them. Such resources include the human resource productivity, innovation creativity, and the reputation that the company has generally considered as brand goodwill (Greene, Brush, and Brown, 2015).
Human resources
Human resources develop best under the stewardship of the HR management, the training, and the entire employee fraternity. PetSmart has about 53,000 employees and associates, therefore, creating a good team that will be handling the various pet clients’ needs. Such a diverse human resource field is detailed to the retail concern, to veterinary expertise such that the company is bale to conclusively care for their clientele. Identifying with the position influence that this intangible resource has, more is inferred on the ability that the company has had in growing therefore linked to the possibility of good and able human resource team. It is noted that 60% of the 1,433 stores have fully equipped expert veterinary services.
Innovation and creativity
The business has also sought to have itself diversify in their service provision. Reading from the PetSmart website, the company has adopted digital resources on their platform; therefore, providing services even where they fail to have a physical presence. With the collaboration of hospital, the company has also managed to include another 1000 veterinary doctors on their operations such that there is a full range of health care provision. The company has also sought to have their presence in major international medical and health care organization such as the MMI and the Banfield Pet Hospital. Such innovations to the practices of veterinary heath care are seen as very vital in the resources capital that the PetSmart Inc. has.
Reputation
The reputation has in this case been built aside from the main income generation services that the company has. These are the charity organization and the adoption center that the company runs. Under these organization, the most fundamentals of animal right have been seen as an interest that the company has at heart. This is a bonus on the reputation and the goodwill that the company gets from the communities around. Similarly according to the adoptions center philosophies, the company is in a position to fund the PetSmart Charities and the PetSmart Give back Team where more than 450,000 are adopted and helped to find homes annually. The interest and the values that this adds is that the company gives back to the community providing a boost on their business ethics and the corporate socials responsibility that the PetSmart Inc. has.
Value chain analysis
The value chain analysis focuses on the primary, secondary and the support activity that a company has to its production, manufacturing or service line (Alexander, 2013). These activities and processes are meant to reduce the costs of operations and similarly, increase the differentiation of the products and the services that the company offers. This assessment is to focus on two categories of the value chain analysis; these are the primary activities and the secondary activities.
Primary activities
The interests that the analysis has in this internal environment are the processes that are key to the operations of the company and the 1,433 stores nationwide. The logistics are the first position that the company has its strengths. Identifying with the valuation of the inventories it is noted that the company has a large value of the inbound and the received inventories. These stand at $ 777 million for the last financial year. Such a valuation is to represent the total values of the inbound logistics that the company handles. Similarly, the nature of these items are the medicines available for the pet care, the different products recommended for pet care use and other marketing inventories used in the creation of awareness such as campaign magazines. The translation of the inventories can be equated to the outbound logistics where the sales will be inferred. Other items in this domain are the housing units on sale for the different pets such as fish, dogs, cats, and birds.
The operations of the PetSmart company are all interlinked to the provision of care for animals and the aid to animal care. These operations translate to veterinary services that the company offers, primary care for homeless animals and extended animal health consultation on private pets. Similar to the interest that the community has with animal care, the operations of the company are detailed in very wide geography area. This covers the United States of America, Canada, and Puerto Rico (PetSmart, 2016).
As suggested with the inbound logistics, the outbound logistics can be made an equivalent of their revenues when it comes to measurement. This is based on the nature of the company operations being intangible with the services industry. Thus, the growth of revenues similarly translates from the inbound logistics that simulates a direct addition of addition of values when looking at the inventory values. Looking at the difference in the inventories for the year 2015 and 2014, and simulating these values to those of the increased revenues for the year 2014 and 2015, it is noted that the addition of values is positive. This highlights as a positive point from which the PetSmart Inc operates. The outbound logistics similarly translate on the services that the company offers.
The services are linked to almost all the primary areas of concern. This is based on the company being a services based player. The accumulation of resources and the addition of value to the primary chain are all adding up to the services that the PetSmart has to offer. Lastly, the check on the marking and the sales that the company has fails to be seen as very high-spirited. Most probably, this will be the case of dominance in the industry. Their marketing has been more entrenched on the creativity and the innovation that the company as a brand has. Such can be termed as the differentiation of marketing by (Pharr, and Lough, 2012). This indicates the use of the stakeholder’s domain in creating strengths that the company enjoys in customer numbers.
Identifying with the primary set of activities that the company has one this is noted with the value chain that the PetSmart company has, this is that less emphasis is placed on the influence that the company would be having in terms of product differentiation. According to Ulrich (2013), the main interest that the value chain serves is the analysis of the product differentiations such that competition is cut off. In this case, the incentives that the series provide are the services differentiation of the PetSmart Inc. these are the additional presence that the company has had in the two countries other than the United States. Their physical presence in the republic of Puerto Rico and that in Canada can be seen as an added advantage on the services that the they offer. On a similar note, looking at the capacity development that the primary values chain has provided, the company is seen as one that is not limited in terms of the logistics.
Secondary
Analyzing the secondary value chain for PetSmart builds more reference to the intangible resources that were identified earlier. This is because they are identified as the aids to the development of the company’s overall performance position. This is linked to the nature that the company has in the service industry. Thus, the tenets to the secondary value chain are the process of procurement, the technological developments, the human resource management, and the general administration that the PetSmart Inc has.
Starting with procurement, Pharr and Lough (2012) defines this as the process by which the company makes supply orders and the process by which customers order from the business. This, therefore, has more emphasis on the interaction process that the customers and the business have. From the point of services, the inbound logistics would be the fact point at which procurement may be seen coming into the business. However, this being a very small inference on procurement more is inferred on the customer interaction with the company. As PetSmart Inc. states the services offered are the pet care, veterinary services, and the pet Medicare. Therefore, the procurement process will be the management in which the pets get through these three services. With the detailed team of professionals, it is assumed that the company faces little or no challenges in administering this services. The affordability can also be involving in the manner in which the PetSmart Company is supposedly operating. According to Alexernder (2013), procurement needs to be documented in completeness. This infers of the willingness of the customers to purchase of acquiring the services of the pet company, and provision of these services by PetSmart Inc.
A technology development comes in from the provisions of creativity and innovation that the company has presented as a pillar to their operations. This is basic to the treatment of the sustainability of resources technologies and the use of digital marking in reaching out to their online clientele. Reading from the annual report for the year 2015, and the subsequent information provided by the website, it is noted that the company has more in the technology tenets than can be simply seen on the website. The use of modern equipment at the pet hospital provides for a detailed cover on the customers and thus creates an edge on their services.
Human resources management forms the most basic or the most important section of the values chain. This is according to Hirano (2013) on the roles that the human resources managements has on the performance of the company. Suggesting from the economic perspective of an industry being capital or labor intensive the service industry is materially labor intensive. This indicates that the use of capital equipment is heavily limited in this industry of health care. Therefore, the position that is mostly seen as valid in terms of the human resource performance will be the qualification that the human resources team has. This is with detail to the top management and the employees that the company has. The company has skilled veterinary series in over 60% of their physical stores this therefore provides good detailed of the skilled labor force that the company has. Similarly, looking at the partners that the company has, the interest is developed as one that focuses on having a fully equipped employee composition for the clientele.
The general administration for the company is analyzed and recorded as the organization structure that the PetSmart Inc. has. This as developed with the annual report is seen to be coming from the top executive to the physical pet store management. According to the management team that the company has presented on their website and the annual report for 2015, the executive president is seconded by a number of executive vice presidents catering for the different dimensions of the company operations. These include the real estate, the purchases buying, and selling, and the distribution.
In summarizing, the primary and the secondary values chain that the PetSmart Inc as the following two-phase decomposition is developed.
Under this valuation, the creation of values is seen with the differentiation that the company has with their services to competition. These are the advantages of a wider scope of coverage on the services that the company provides for the pets and parents. In fact, the company they develops more inference on the value addition that the company has “providing total lifetime care for pets and parents.” The success of the company in terms of the growth that has been seen in Canada and Puerto Rico can only be seen as factual evidence of the relevant position that value addition plays to the PetSmart Inc.
Core Competency Analysis
Competencies are developed as the major pillars that the company will have in terms of their operations and situational performance. Identifying with the roles and the services that the company has in the US, Canada, and Puerto Rico, the core competency annalistic chooses to focus on the services delivery that PetSmart Inc. has. Thus, this section segregates into the core organizational competency analysis, then the skills and abilities specific to the business, the VIRO analysis, and the key success factor that the PetSmart Inc. has had over their history and as they move into the future.
Organizational capabilities
Other than the provision of the veterinary services, the interest that the company has is with the preservation of human rights act more to the capabilities. This is attached to the influence that the company has on supporting the various industries in the regions that operate. Such areas are those of employment creation with the over 53,000 employee and associate staff, the performance of the company in terms of recruitment is very high. Similarly, looking at the wide are coverage that the company has, their core capabilities comes in the abilities that they have in venturing into areas where they are yet to have a physical presence. This is through the sales that they are able to make in the untapped and unrepresented areas. Therefore, with regards to the capabilities that the PetSmart company has, they stand as a majority employer and a majority supplier to veterinary health services.
Specific knowledge, skills, and abilities
Veterinary skills and services can be stated to be less famous to those of human health care. This practice has long been taking second fiddle to other medical related practitioners. However, looking at the values addition that the processes and the services of the PetSmart inc. has been introducing and the revenues that are attached to it, one notes of the specific skill and abilities in service provisions that they have. The interpretation of the high revenues will be taken as due consideration for the performance of a good market existing for the care or pets. Arguably veterinary health care in the majority of developing economies and region has been limited to the care of animals considered as agricultural. This, therefore, puts the care of domestic pets assumed based on the lack of interest or the lack of ability to care for these pets. The set of skills that the company introduces, in this case, are the ability to provide health care to these best friend to man, and offer a set of skill that is mostly missing in many communities. Similarly, the professionalism that the company has is commendable with the over 60% physical store equipped with professional veterinary services.
The abilities that the company similarly has are not limited to the care of sick pets only. there capacity building is in this case seen to be more detailed in the provision of more than medical care to hospice care and animal adoption centers. Other than this, the primary care and the capabilities that the company has are developed with the interest that the company has in corporate social responsibility. This is seen from the charity events that the PetSmart inc. has been organizing, funding, and participating in over the last few years.
VRIO Analysis
The VRIO analysis is an abbreviation of the values, the rarity, the imitability and the organization abilities that a company may be having. A positive score on all these four demensions will be adding a very competitive advantage to the operations of the company.
Key success factors
The success factors are developed from the incentives that the company has managed to develop for themselves with the resources and the operations environments. This analysis notes that following success factors are unique to the performance that the company has.
Detailed client base – with a client base that needs to the services that they have provided, the position that the company has is one that is attracting, even more, clients and revenues. Looking at the inference that the company has on the regional customer base, the diversified and large customer base is what provides and incentive for the company in terms of operations.
Professional veterinary services – according to Ulrich (2013), the main interest that the growth of the company may be having can be linked to how professional they are. This is seen as the main incentive that the clients have in identifying and seeking the services of the company for their pets. Pets are known to have high owner values, therefore, making them precious to warrant good and professional care.
Compliance and business ethics – the growth and development of any business cannot be unwatched by regulations, for the company to have managed to grow into the three countries, their journey has been aided and supported by business ethics and compliance to regulation (PetSmart, 2016).
References
Alexander, S. (2013). Innovation journey: design thinking in the value chain. In Proceedings of the 27th Australian and New Zealand Academy of Management Conference: Managing on the Edge: 4-6 December 2013, Hobart, Tasmania, Australia.
Anderson, B. S., & Eshima, Y. (2013). The influence of firm age and intangible resources on the relationship between entrepreneurial orientation and firm growth among Japanese SMEs. Journal of Business Venturing,28(3), 413-429.
Greene, P. G., Brush, C. G., & Brown, T. E. (2015). Resources in small firms: an exploratory study. Journal of Small Business Strategy, 8(2), 25-40.
Hirano, M. (2013). Human Resources Departments of Japanese Corporations: Have Their Roles Changed?. Japan Labor Review, 10(1), 81-103.
Pharr, J. R., & Lough, N. L. (2012). Differentiation of social marketing and cause-related marketing in US professional sport. Sports Marketing Quarterly,21(2), 91.
Ulrich, D. (2013). Human resource champions: The next agenda for adding value and delivering results. Harvard Business Press.
