In the pet medication industry, the buying power of customer is high because of the presence of different competing products, other substitutes and less differentiated products (Porter, 1985).
Suppliers are another critical input of the organization. PetMed is primarily a marketer of prescription and non-prescription pet medications, and other health products direct to consumers. It does not manufacture its own product. The company purchases its products from different sources such as manufacturers, domestic distributors and wholesalers. Its goal is to obtain the lowest cost of goods by having multiple suppliers for each product. The bargaining power of suppliers is low for the company because it can switch suppliers quickly at a lower cost (Porter, 1985). However, the threat of forward integration where manufacturers would sell their own products directly to consumers and compete with PetMed's products is high. This threat will not guarantee the supply of the company's products to meet customers' demands.
Prescription pet medications are governed by state laws and state regulations. PetMed requires different licenses in different states in order to sell and deliver prescription medications. The company's failure in obtaining or renewing such licenses would hamper its sales and cease its distribution of pet medications. Reprimands, sanctions, probations, fines and suspensions from the regulatory bodies could have material adverse effect on the operations of the company and the reputation of its brands. (PetMed Express Inc, 2009)
For most industries, the level of profitability is determined by competition between the firms in the industry (Sadler, 2003). Pet medications industry is competitive and highly fragmented. PetMed's industry rivals include veterinarians, traditional retailers, mail-order and online retailers of pet medications. Aggressive price competition occurs because of the diversity of competitors and largely undifferentiated products. The sales performance of the PetMed will be greatly affected the sales performance of their competition.
The resources are the individual assets of the firm which includes human resource, capital resource, technology, information and brand name(Sadler, 2003). PetMed offers its products through the Internet, contact center and direct mail-order catalogues. Customer care representatives and marketing employees are essential to the operations of the company in retaining and expanding the customer base. Effective training sessions of their representatives become a competitive advantage of the company against its rivals. The marketing activities are aimed at building brand recognition, increasing customer traffic and building strong customer loyalty (Best, 1997).
As a marketer, PetMed exploits the different technologies available to promote their products. This includes television advertising, direct mail, email and online marketing. The brand is made available to Internet consumers by purchasing targeted keywords and optimizing search engine placement. As a distributor, the company has an in-house fulfillment and distribution system that manages the entire supply chain. As a retailer, it utilizes integrated technologies in call centers, e-commerce, order entry, and inventory control. The technology and information