Petco’s Business Strategy
Petco’s Business Strategy
This is a one page summary. It should be self--contained, i.e., it should provide a busy reader with the most important information from the report, even if he/she never reads the body of the report. This is NOT a preface that merely introduces the report. Write this section after completing the rest of your report, even though it is placed at the beginning of the report.
2. Introduction (250 words)
Strategies and Performance: Identify or infer the organization’s current mission, major business objectives, and strategies (especially corporate--level and competitive strategies). Evaluate the effectiveness or appropriateness of these strategies, including the organization’s portfolio of businesses (for diversiVied Virms) and competitive strategy -- don’t just describe them. Evaluate its performance (refer to its ROIC, growth rate, proVit margins, etc.). BrieVly summarize how well the organization has been performing against their objectives and in general.
?3. Analysis of the External Environment (250 words)
Scan and analyze important factors, trends, and probable future conditions to identify key opportunities and threats for the organization.
• General Environment: What are the TWO most important general and signiVicant trends in the
environment of the Virm? How will they affect the Virm?
• Business Environment: Industry structure and competitive environment (use Porter’s 5--force model,
the extended version if appropriate, the industry opportunities framework). Include industry growth trends, key success factors. Is the industry attractive? What are the TWO most important threats and the TWO most important opportunities in the Virm’s industry?
4. Internal Analysis (250 words)
Scan and analyze each of the major functional areas, particularly to identify the organization’s strengths and weaknesses. What are the TWO most important resources and/or capabilities that the Virm has? Are they valuable/relevant, rare/scarce, inimitable/durable/transferable/non--substitutable/costly to imitate? Add value beyond mere description to ask and evaluate, how well is this working? Look for distinctive competencies, sources of competitive advantage, and major ways the organization creates value through its operations. The following Vive areas are one convenient breakdown. Listed under each are some topics that could be important, but don’t consider these as a mandatory checklist.
• Marketing: product mix, customer segments, pricing strategy, distribution, promotion (note connections between this and the business environment analysis in the External Analysis section).
• Financial: draw conclusions about their Vinancial condition from analysis of proVitability, liquidity,
leverage, activity, and investment community relations. You need to use comparative Vinancial information (industry averages or Vigures for key competitors) to make sense of the organization’s Vinancial data and trends. It is vital that you present conclusions, including an assessment of their overall Vinancial condition -- not just numbers and graphs.
• Production/Operations: locations and capacities of facilities relative to demand, output allocation (what is done where, when, in what cycles), labor/capital intensity, efViciency, aging & obsolescence, inventory levels, quality objectives and results.
• Technology: technology strategy, technological position, how this position was obtained and is maintained, extent and thrust of R&D, industry trends and competitor strategies (note connections with the External Analysis, which deals with technology developments outside the company).
• Organizational: everything else worthy of note, including top management and key staff resources, board of directors, employee/labor relations, organization structure, reward systems, culture.
Your report must include an analysis of the TWO most important resources/capabilities. One good way to handle this is to put it in an appendix, then refer to it in the sections on Internal Analysis, External Analysis, and Integration of Major Strategic Issues.
5. Major Strategic Issue (250 words)
In this section, integrate the major Vindings from your analysis in the previous two sections. State clearly the most important (ONE) major critical issue you have identiVied, and summarize the reasons that led you to choose it as the major critical issue. What is the issue? And why is this issue the most critical? You may also discuss a few other issues, but please make it clear which you have chosen as the critical issue. A critical issue may include problems, threats, or weaknesses (occasionally opportunities), but will more likely involve the interaction of several of these (e.g., a Virm’s current strong market position being challenged by an innovative competitor). Consider both short-- and long--range issues.
6. Available Alternative Strategies (250 words)
Present TWO strategic alternatives available to the organization that can be considered reasonable in the context of your analysis/diagnosis. This does not mean listing every textbook strategy, but does require identifying a range of alternatives for this particular business situation, showing understanding of the current strategies. Consider corporate level strategy, competitive strategy, and (possibly) other functional
strategies. In addition to identifying an alternative, provide a balanced critique of the alternative, as it relates to the situation, for example: issues and problems addressed by the alternative, problems created, and how the alternative relates to the strengths, weaknesses, opportunities, and threats of this business situation. Be sure to consider implementation implications. As you perform this part of the case analysis, you should make clear which is the best strategy.
7. Recommendations (250 words)
Present a speciVic strategy recommendation. The recommendations will be chosen from the two alternatives presented and evaluated in the previous section. There should be recommendations for corporate level strategy, competitive strategy, and (if not already covered in the previous two subsections) other strategies to address the critical issues you identiVied (with a subsection for each of these three). Be sure to include the rationale for your choices and that you have considered the availability of resources to carry out your proposed strategies. These actions can be reafVirmation of, replacements for, or changes in, current objectives and strategy. Check to ensure that your recommendations have addressed all the critical issues you identiVied.
A. Corporate Level Strategy Recommendations B. Competitive Strategy Recommendations
Include copies of key research material you used, including industry Vinancial data (with sources cited); details on Vinancial analysis; and anything else that would clutter the main text (e.g., you can put your Porter 5--force details here). Be sure that any appendices are referenced and used in the body of your report.
Things you should keep in mind as you prepare your report:
• Assume the reader (your top management client) is at least as familiar as you are with the
organization/case (therefore, don’t waste time describing the case details without adding value).
• Avoid the common trap of exhausting yourself with too much analysis, and consequently short--
changing the conclusions and recommendations. Instead, keep in mind the whole report and balance
your effort among the sections.
• Use the quantitative data in the case to full advantage (if there are Vinancial data, you must include
analysis and conclusions from it). Support your analysis with numbers whenever possible. (For example, if you believe that the Virm has a competitive advantage, include in your analysis at least some of the following: What are the Virm’s net margins over the last several years? What are Returns on Equity, Returns on Assets, Return on Invested Capital? Compare with the competitors’ ratios.)
• Distinguish among facts, opinions, and assumptions.
• Check your work for completeness (are all issues identiVied and addressed?), justiVication (do you back
up what you say with evidence?), logical Vlow (is it clear how you moved from analysis to critical issues
to alternatives to recommendations?).
• Organization is important. Think of the reader as you write and edit; make your report easy for the
reader to follow and understand. Use headings and paragraphs. Check spelling and grammar.
Carefully edit and proofread your report.
• Use lists, tables, and Vigures as appropriate to communicate.
• Write this as a business report and don’t turn in anything you would not be willing to deliver to the
president of your most important consulting client company.