HERO DOG TREATS Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

HERO DOG TREATS Case Solution

Issue Identification

Leendert Bolle, President of Hero Dogs met with his main distributors, who were now demanding new products at low price with high quality. Bolle was thinking to reduce product cost by 20%. He has to come up with a strategy on whether he should contact any import intermediary or whether he should acquire products internationally by himself. Moreover, how will he manage volatility in exchange rate? How will he negotiate with international suppliers and how will he accommodate in diversified culture? How will he manage financial risk? Leendert needs answers for each question.

Environmental and route cause analysis

Canadian pet food market is growing at a tremendous rate of 4% per annum during last five years and it is expected to grow at a rate of 2.2% in for coming 5 years. As humans now prefer healthy and hygienic food, in the same way, dog owners now require same hygienic and healthy food for their pets because they consider them as their family members. Existing and new players make huge investments in this industry. New product development is taking place very fast. Hundreds of products are made each year. The population of dogs in Canada has also reached 5 million.

Dry dog food in particular is mostly sold food in Canada, with sales of around $600. This is because dry food was a bit less expensive than dry food. Dog's treat and mixers sales increased at a rate of 4.7% in previous five years and dry dog sales increased by 4% per annum. While sales of wet dog food have just increased at a rate of 2.6% per annum. Regulations in Canada regarding foods are also now strict because of the increasing health awareness among people. Every imported food item is monitored by CFIA and its standards are matched with benchmarks. If food is up to the standards, then product is allowed to enter the canadian market, otherwise the product will not be imported. It is the same case with the United States as well; In U.S., all manufacturers and suppliers are required to keep a record of their supplies in database, so that it can be easily traced in tough time from where this product has come.

The world is rapidly accepting new digital changes. Everyone has access to the internet through smart phones; people use to search what is good for their health and what is safe for their health. While taking advantage of this trend, Hero Dog's competitors are running fast to improve their sustainability.

Alternative options

Following alternatives are available for Leendert Bolle.

Import food products from foreign markets himself: Leendert should import products himself from abroad. He can save cost of an intermediary because of this, which is ultimately a part of product cost.

Pros

No intermediary fee: As Leendert will do purchasing himself; there will be no intermediary fee.
Independence: company will not be dependent on any intermediary channel.
Can remain immune from fraud
He will understand the dynamics of international market.

Cons

May be unable to find suppliers
He may face problem while communicating in a diversified culture.
Exchange rate fluctuation can increase cost
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