Pets.com Case Analysis
PETS.COM CASE ANALYSIS
INTRODUCTION
In this report I will analyse Pets.com’s short lived success as America’s number one online supplier of pet foods supplies and accessories. I will also identify what actually went wrong and present a refreshed offensive marketing strategy to the board of the company.
It was unbelievable how a public listed company led by some of the world’s best business executives, draped by all the funds that any company in the world would envy, partnered with the world’s number one e-commerce company and became America’s pet industry icon can lose everything in less than two years after its first introduction.
In my opinion some of the major factors that contributed to Pets.com failure were:
1. Bad strategic decisions made by the previous leadership including underestimating the cost of operations and overspending on marketing. The management was so obsessed grabbing the market share but at the same time losing their focus altogether on their actual goal and objectives, which is generating revenue for the company and become profitable to ensure sustainability.
2. Despite its success in building brand recognition, Pets.com overestimated the market trend and power of the internet. They were also overconfident in estimating the market real potential and risk due very shallow and weak market research. When everyone was rushing to jump onto the internet e-commerce guaranteed-for-success bandwagon,
Pets.com did not realize pet business was not that simple but in fact more complicated compared to selling books and clothes online. After all the costly marketing promotions and advertisements, overnight popularity, having the most complete online product offerings and latest technology at their disposal, still in the end Pets.com failed to show much added value and differentiators in the eyes of the customers.
3. Completely ignored the power of traditional brick and mortar business model. Pets.com failed to understand their
INTRODUCTION
In this report I will analyse Pets.com’s short lived success as America’s number one online supplier of pet foods supplies and accessories. I will also identify what actually went wrong and present a refreshed offensive marketing strategy to the board of the company.
It was unbelievable how a public listed company led by some of the world’s best business executives, draped by all the funds that any company in the world would envy, partnered with the world’s number one e-commerce company and became America’s pet industry icon can lose everything in less than two years after its first introduction.
In my opinion some of the major factors that contributed to Pets.com failure were:
1. Bad strategic decisions made by the previous leadership including underestimating the cost of operations and overspending on marketing. The management was so obsessed grabbing the market share but at the same time losing their focus altogether on their actual goal and objectives, which is generating revenue for the company and become profitable to ensure sustainability.
2. Despite its success in building brand recognition, Pets.com overestimated the market trend and power of the internet. They were also overconfident in estimating the market real potential and risk due very shallow and weak market research. When everyone was rushing to jump onto the internet e-commerce guaranteed-for-success bandwagon,
Pets.com did not realize pet business was not that simple but in fact more complicated compared to selling books and clothes online. After all the costly marketing promotions and advertisements, overnight popularity, having the most complete online product offerings and latest technology at their disposal, still in the end Pets.com failed to show much added value and differentiators in the eyes of the customers.
3. Completely ignored the power of traditional brick and mortar business model. Pets.com failed to understand their
Bibliography: 1. Pets.com: Rise and Decline of a Pet Supply Retailer by Dr Omar Merlo 2. The Rise and Fall of Pets.com: ”Because Pets Can’t Buy” by Cara L.O Peters (University of Georgia) and Marilyn J. Okleshen (Minnesota State University) 3. Pets.com failure and its causes http://my-espace09.blogspot.com/2009/01/petscom-failureand-its-causes.html 4. Pet & Pet Supplies Stores Industry Statistics Research Report – Anything Research 2010. 5. US Pet Market Outlook – Packaged Facts 2009. 8