Industry Background
The pet industry has seen rapid transformation in the USA in the recent decades. The ownership rates have gone up by 21% in just 25 years and this shows a consistent growth.
The number has grown at a CAGR of roughly 5% in the last decade and this is an encouraging number. The expenditure on pets has also grown by nearly 40% from 2011 to 2018 which makes the industry highly attractive to enter.
Case Overview
Our client was a new market player who wanted to enter the US pet industry with pet after-life services offering.
(A)The objective was to develop a go-to-market strategy as well as define the target group for the company. The space is highly attractive due to low threat of new entrants, low bargaining power of suppliers and high capital expenditure associated with the nature of the industry, However, a strong trend of consolidation exists in the industry.
Challenges
The key challenge was to deliver a Go-to-market strategy for the client with clearly defined segments to target, strategy on how to capture them and sizing the segments for prioritization.
The key challenges were –
Finding the different customer segments
Sizing the segments and deciding the target segments
Strategy on how to enter the market & develop the business model to maximize the financial profit with an exit plan
Solution
We approached the problem by first conducting pet industry research & understanding the competitive landscape. We then understood the major segments that could be targeted, sized them and decided on an expansion plan for different segments. The key takeaways are as follows –
Industry analysis and competitive benchmarking to find out the most important segments along the parameters of geography, customer generation (like Generation Z, Millennials, etc.) and so on
Calculated the potential market size of different segments and prioritized the segments basis size and willingness to pay for our service
Decided the ideal business model & strategy on how to enter the market (on our own, acquisition of existing company, joint venture etc.) basis the competitive whitespace in the market to maximize financial return with an exit strategy in the next years
