Pets.Com
Lina Geoushy
900071827
MGMT480-01
Dr. Iman Seoudi
PETS.COM
Describe the situation faced by Wainwright when she joined Pets.com as CEO?
The market for pet products was extremely fragmented. Sales went through multiple stores like mass merchants, independent pet stores, and supermarkets
The Pet industry was attractive and it was appealing to a large number of competitors
Analysts were optimistic because the internet had already proven to be a successful distribution channel for software, music, and books
Pets.com had three main competitors: Petopia.com, Petsmart.com, and Petstore.com
Wainright had been hired to lead the company and to establish it as a market leader of the online pet supplies category.
Wainright feared and was worried that the well established company Amazon.com would be willing to enter the Pet supplies category, therefore she decided to offer shares of Pets,com to Amazon.com because that was the competitor she feared the most
Should Wainwright have offered a shareholding position to Amazon.com? Assess the rationale behind this. What are the advantages and disadvantages of having Amazon.com as a partner?
Yes she should have offered shares to Amazon.com because Pets needed capital, and they needed to eliminate the risk of a very strong potential competitor. They needed to be backed by a venture capitalist like Amazon.com who is well established with a successful business model to learn from.
Advantages
Receiving cash and raise more money
Pets.com obtained a link on Amazon.com’s home page
Amazon also offered a buddy system for Pets.com employee to seek guidance from Amazon.com’s employee for any business issue
Recruit top talents
Eliminated a very strong competitor
Enabled Pets.com to use the experience and strategic assets of Amazon.com to build a competitive edge
Pets.com growth strategy relied on heavy spending on marketing communication and low pricing. Critically appraise this strategy. What alternatives did
900071827
MGMT480-01
Dr. Iman Seoudi
PETS.COM
Describe the situation faced by Wainwright when she joined Pets.com as CEO?
The market for pet products was extremely fragmented. Sales went through multiple stores like mass merchants, independent pet stores, and supermarkets
The Pet industry was attractive and it was appealing to a large number of competitors
Analysts were optimistic because the internet had already proven to be a successful distribution channel for software, music, and books
Pets.com had three main competitors: Petopia.com, Petsmart.com, and Petstore.com
Wainright had been hired to lead the company and to establish it as a market leader of the online pet supplies category.
Wainright feared and was worried that the well established company Amazon.com would be willing to enter the Pet supplies category, therefore she decided to offer shares of Pets,com to Amazon.com because that was the competitor she feared the most
Should Wainwright have offered a shareholding position to Amazon.com? Assess the rationale behind this. What are the advantages and disadvantages of having Amazon.com as a partner?
Yes she should have offered shares to Amazon.com because Pets needed capital, and they needed to eliminate the risk of a very strong potential competitor. They needed to be backed by a venture capitalist like Amazon.com who is well established with a successful business model to learn from.
Advantages
Receiving cash and raise more money
Pets.com obtained a link on Amazon.com’s home page
Amazon also offered a buddy system for Pets.com employee to seek guidance from Amazon.com’s employee for any business issue
Recruit top talents
Eliminated a very strong competitor
Enabled Pets.com to use the experience and strategic assets of Amazon.com to build a competitive edge
Pets.com growth strategy relied on heavy spending on marketing communication and low pricing. Critically appraise this strategy. What alternatives did