Cat Fight in the Pet Food Industry

CAT FIGHT IN THE PET FOOD INDUSTRY

1. Description:

I strongly believe that Ralston Purina, which is current leader in dry dog and cat food segment, should facilitate a strategic acquisition of Anderson Clayton and establish itself as a leader in the moist food segment as well (Diversification of portfolio).

CP: The changing demand for dog food offerings

2. Assessment:

The pet food industry is hard to enter due to saturation and multimarket competitive battles for market shares. As a result, the consumer demand becomes very volatile. Therefore, if dog food demand is sustained or on a rise, the decision to buy Anderson Clayton would be very beneficial, since Ralston would be able to cater to two different segments: Dry and moist food offerings. However, if the demands shows continuous deterioration or if competitors come up with strong product differentiation, the acquisition would prove to be a loss.

3. Decontextualization:

The demand for pet food is derived from consumption needs of pets and consumer perception such as price, quality, packaging etc of the products, however, the pet population growth had witnessed a slump from mid 1980s, Therefore, demand was saturated in the pet food industry coupled with fierce competition from various firms. All the firms are huge, well positioned and benefit from Economies of Scale They resort to price wars, product diversification and aggressive advertisement campaigns to gain major share of markets. Not to forget, the consumer behaviour is also very dynamic in terms of key drivers that define an ideal pet product. Hence, the demand for pet food isn’t very concentrated.

4. Generic Solution:

Since, the pet population did not witness any