Situational Analysis Flashcards
What is the mission statement?
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We are committed to meeting all the needs of pet owners and pets by providing superior products that will keep pets healthy and happy throughout their lives. We wnat to give our customers the most captivating shopping experience that will ensure life-long relationships and loyalty. We wnat to be relevant not only to pets and pet parents, but also to our communities by supporting local animal-related charities
What is the vision statement?
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To create a better everyday life for pets owners and their pets by providing the highest quality of healthy, innovative, fun, and safe products for cats and dogs in stores that are staffed by pet-loving and knowledgeable people.
What are the core values?
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Have a positive impact on our pet parents and create lasting relationships
Sell only the highest-quality products that will foster healthy and happy pets
Provide pet parents with knowlegeable advice on products to help them make the right decisions for their pets
Value, develop, and reward contributions, service, and skills on our employees
Act always with the highest ethical standards, integrity and honesty
Care about, be involved in, and give back to our local communities
What are the key success factors (KSFs)?
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Attractive and eye-catching product presentation and displays to promote buying
experienced and knowledgeable sales staff to provide advice for customers on their specific requests
locations in high-traffic and visible areas to maximize traffic into the stores
a wide range of products to offer at various price and quanlity levels in order to attract all types of customers
consistent and good-quality products to ensure ongoing customer satisaction and continued customer loyalty
strong relationship with manufacturers and distributors to allow pet stores to purchase high-quality goods at a lower cost
investment in good technology and information systems allowing the store to control and record merchandising, distribution, sales and stock markdowns.
What were the original 4 shareholders concerned about?
Slowing revenue growth
Declining Margins
Future prospects
This resulted in conflicting opinions about the company’s future strategic direction
Who are the 4 shareholders?
Julia Hammond (40%) - 48
Steve Hammond (10%) - 50
Richard Davidson (40%) - 48
Elaine Davidson (10%) - 48
Rashid Baid - manages store opertions. Works closely with Julia
What is Julia’s position and thoughts about JRP.
dog lover and founder. Good at instilling passion and articulating her vision to employees. Was concerned about large pet chains.
Likes to be personall involved, and prefers a small network of stores. Wanted to invest in a new pet segment in its early life stages whose market is expected to increase.
What is Richard’s position and thoughts about JRP.
VP Product purchasing. Strength is his knowledge. He is the research and pet food information guy. He also trains the employees on his choices and how it can help pets.
Wants to expand nationally and increase the number of stores across Canada. Wants to expand on health-related products and services to gain more market share.
What is Steve’s position and thoughts about JRP.
VP real estate. He is the big guy for all decisions related to land - site selection, leases, leasehold improvements, equipment installation, communication with landlords. He is great at negotiating. Likes to personally handle everything related to real estate. Does not trust a non-shareholder to make the right decision (he has a list of criterias)
Wants to invest in a pet-food manufactuer or invest in a new emerging market. He belives success came from store sites, and he would travel for long periods to find the ideal location. No longer wants to do that and does not trust anyone else.
What is Elaine’s position and thoughts about JRP.
Has extensive accounting knowledge, but is not CPA. She does all the accounting, financial (external and internal) reports. Makes sure that all managers have some level of finacial literacy so they can understand and interpret their own report.
Agrees with Richard and JRP should stay in retail and adjust their product mix to have higher margins. Thinks this is the least risky since they already have the reputation and experience. Wants to hire experiened and trustworthy individuals to help expand and grow the company to the next level.
Name a few SWOT points
Strengths - Knowledgeable and well trained staff to deliver on their excellement customser service building customer lyoality and long-term relationships
Has develoepd a criteria for their store locations in areas with less than 150,000 people, above average income and high traffic areas where JRP operatines in an undeserved market. This has helped JRP tap into the higher income earner, which makes up a large % of this industries revenue.
Weaknesses:
- limited online sales presence at only 3% in 2022, but other pet stores have moved towards “brick and click” strategies to grow and capture some of the market share.
JRP has limiited points of differentiation outside of its customer service while numerous pet stores are entering the market.
Opportunities:
- increasing trend for pet parents who want their pets to have the best products. JRP product sclosely align to the this segment.
- JRP has access to various customer information and data with proper data analytics, this information can be used to better target custosre segment.s
Threats:
- price competition in industry form large retailed who are able to price match and access a larger array of products and gain exclusive rights to products could result in loss of suppliers for JRP.
- bank covanants with JRP and if any of thses are breached, the bank can demand repayment immediately.
What does PESTEL stand for?
Political, economical, social, technological, environmental and legal
Assess macro encironment of the entity
What are some quatitative high level analysis that can be performed?
Assessment of:
Cash
Gross margin
Inventory turnover
Sales Growth
Operating margin
Debt and Financing
Profit Margin
Staff turnover
What are some key ratios to know?
Gross margin
Operating margin
Profit margin
AR and Inventory turnover
What are some key analysis to know how to do?
Target Costing
Break even analysis
Payback period
NRV
ROI
RII
