Hero Dog Treats Case Study

Hero Dog Treats

It has been almost three weeks since Leendert Bolle, the company president, had a business meeting with two of his main distributor customers. He received the same message from both of them: they want new types of products at a competitive price and quality on the market. To sustain his competitive advantage in the market, Leendert wonders how he can broaden his ability to purchase raw materials, package globally and create a pricing leverage. His intention is to drive down by at least 20 % the production cost while, at the same time, to offer a wider range of types of organic food for dogs, packed in packages of various sizes. Leendert will have a new meeting with his main customers next week, and he has to decide about his new purchasing strategy.

Unfortunately, it is not yet decided whether to appeal to an intermediary company specializing in importing raw materials for organic food and packaging, or to lead the global acquisition process himself. In addition, he wonders how he could manage the foreign exchange swap process applicable to his commercial transactions. Leendert is asking how he could manage his business and negotiate payments with overseas suppliers. Would it be helpful to use letters of credit?

What strategy should Leendert apply to reduce procurement and financial risk? Would Leendert be able to manage the overseas cultural differences and language barrier? He has no prior experience negotiating with foreign companies.

Company background

The company is a craft and manufacturing company for processing and packaging of organic dog food. Leendert Bolle started the company four years ago as a result of a market opportunity to provide Canadian organic dog food at an affordable price for consumers. He started as a true entrepreneur having no experience or background in the pet food industry. Bolle worked in the military for over 15 years before starting his own company.

The company offers all natural and healthy dehydrated dog threats. Hero Dog Treats operates in St. Catharines, ON employing six people and has $1,000.000 in annual sales. His intention is to increase annual sales by 40% by the end of next year.

Bolle says that he has always had an entrepreneurial spirit, but never had the courage to follow through with it; that is, until a friend who worked in the pet food industry approached him with the idea of manufacturing dog treats.

The company mainly sells three types of dehydrated threats for dogs: Dog Treats from beef, lamb, chicken and rabbit meat; Bully Sticks, a 100% natural product, and Antler Chews, from 100% naturally shed antlers of animals raised on government inspected farms.

Hero Dog Treats sells its products through Canadian pet food distribution channels and has three main distributors. The company also has online sales with Amazon.