BUSA30000 Assignment 6:
Business Case
Mad Paws
Abstract
Client: Mad Paws
Student Name: Yizhi Li
Student ID: 1065822
Word Count: 1493
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Introduction
Mad Paws has generated a 244 percent revenue surge in FY22 through sector
consolidation and brand synergies (Simmons, 2022). With increasing competition in
the Australian pet products and service industry, Mad Paws needs to secure our current
market position while exploring new product categories to generate more profits within
the coming 12-18 months. By analysing the current market position, this report provides
effective judgments and recommendations for Mad Paws’ choice to enter a new product
category, pet souvenirs.
Part 1 Current Position of Mad Paws
1.1 Market Position
Mad Paws’ current market positioning is clear and distinctive, which is to pet product
consumers in Australia, Mad Paws is a brand that not only offers a complete pet service
through the online platform, but also provides a wide variety of pet products that can
cover all the needs of pets throughout their entire life cycle and create value for both
pets and pet owners (Savary & Elberse, 2006). The reason is that Mad Paws
continuously develops our own online pet service marketplace, while enhancing
integrated marketing communications capabilities and influence in the pet services
industry through the acquisition and integration of multi-brands such as animal health
platform Pet Chemist, pet food brand Dinner Bowl, pet toy brand Waggly and dog bed
company Sash.
1.2 SWOT Analysis
Brand synergies have made Mad Paws stand out in the pet care industry, but the constant
entry of new competitors and fierce competition also issues for Mad Paws to consider
in future strategies. It is important to analyse the current strength and weaknesses of
Mat Paws through the SWOT framework (UNICEF, n.d.).
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Strengths:
- Mad Paws has a large Australian consumer base and loyal consumer group, with a
database of over 19,000 pet service providers and 450,000 pet owners registered on
the marketplace (Mad Paws, 2022).
- Mad Paws focuses on online pet services and has comprehensive sub-categories
within the pet care industry.
- Mad Paws has a positive growing revenue to support further investment in new
categories.
Weakness:
- Mad Paws only takes account a small share of the pet care market in Australia. The
competition among leading players for market share is intense (MarketLine, 2015).
- Mad Paws' competitive advantage is gradually weakened. There are no high barriers
to entry in the pet care industry, and many pet care offline stores develop online
platforms.
Opportunities:
- The trend of becoming pet owners is growing and more and more people spend
money on their pets’ care services.
- The COVID-19 pandemic makes people spend more time staying with their pets
and shopping online for pet products.
- Revenue growth in the online pet care industry is high (Richardson, 2022).
Threats:
- In the next five years, competitive pressures from internal and external competitors
will gradually increase, which may affect the operational landscape of the online
pet care industry (Richardson, 2022).
- New business models and services are continuously emerging. Both niche players
and larger online pet care companies are constantly improving their technology and
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facilities.
- Demand for pet food in supermarkets and grocery stores also affects online sales
(Richardson, 2022).
Part 2 Judgements on the chosen new product category
Faced with a steady influx of new rivals in the industry and competition for market
share, Mad Paws need to expand a new product category that could consolidate our
brand positioning while achieving stronger synergies with our existing product
categories to attract new potential consumers and improve revenues.
2.1 7 Steps to Effective Decision Making
It is necessary to use the 7 Steps to Effective Decision Making Framework to identify
a decision, gather information, and evaluate alternatives to choose the optimal solution
for Mad Paws to expand a new product category (Dartmouth, n.d.). After the analysis
of the pet care industry and Mad Paws, our decision is to develop a competitive and
profitable product category targeting pet owners within 12-18 months. In a
comprehensive assessment of feasibility, resources and capabilities, risk, profitability,
and competitiveness, the following alternatives were generated.
Alternative 1: Pet amusement park & pet community
Mat Paws takes advantage of a large number of registered users in the existing online
marketplace to build a pet community online and a pet amusement park offline. Pet
owners can share their pets' lives through the pet community and make friends in pet
parks. Through online and offline interaction, consumer loyalty and brand influence
can be enhanced.
Alternative 2: Pet funeral supplies
There are 6.33 million dogs and 4.9 million cats owned in Australia in 2021 (AMA,
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2021). This is a category that many pet brands neglect and pet funeral products are in
great demand. Pet urns, commemorative badges and photo albums with pictures of their
pets are all products that pet owners will be willing to purchase to keep their pet
memories alive.
Alternative 3: Pet souvenir
Pet souvenir is a product category developed for pet owners' own purchasing
preferences and needs. Mad Paws currently offers products and services that are mostly
for pets’ needs, such as pet food, health care and pet grooming. Mad Paws goes from
pet owners’ emotional perspective, as fans buy their favourite signers’ souvenirs, and
lovers buy sweethearts outfit and couple accessories, pet owners are willing to buy
memorable pet photo albums, necklaces and bracelets engraved with their pets’ names
and pictures, costumes and decorations of holiday celebrations for both pets and pet
owners. This product category can enrich Mad Paws' brand positioning, make the brand
products more comprehensive, increase consumption and attract more consumers in a
short period of time.
All the alternatives above provide complementary synergies with Mad Paws' existing
product categories, and Mad Paws has a significant leading power given that
competitors are weak in each of these product categories. However, for the pet
amusement park, it needs time and money to search for places and build parks, so there
is a certain probability that the profits will not be seen in a short time. Launching pet
funeral products under the pet care brand is risky. When pet owners buy snacks for their
beloved pets, if they see signs such as "pet funeral", it may bring them negative
shopping experiences and brand perception. Thus, pet funeral products still need time
to do market testing. In contrast, pet souvenir is an optimal choice with the lowest cost
and the lowest risk, which can achieve revenues in a short time.
2.2 Minimum Variable Product
The implementation of the minimum variable product in the new product category, with
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the shortest time and the most effective cost to bring satisfaction to consumers and
achieve a “first-in advantage”, is also a factor for Mad Paws to judge (LeMay, 2018).
Mad Paws already has a consumer base, and the development of pet souvenirs can not
only increase the purchase of existing consumers but also attract more consumers
through market promotion. The design, research and development, production and time
costs of pet souvenirs are relatively low, the technical feasibility is high, and the
potential profit space in the market is large. It will bring both functional and emotional
satisfaction to consumers. Mad Paws can continue to evaluate consumers' preferences
and develop more products after consumers have acquired a certain awareness of pet
souvenirs in the early stage.
Part 3 Recommendations & Implementations
Mad Paws aims to create the most valuable products for both consumers and the brand
in the pet souvenir category, using a step-by-step product development strategy,
attractive pricing and promotion strategy to create the scarcity and irreplaceability of
the product category in the pet care industry, thereby achieving a sustainable
competitive advantage.
3.1 Product Offerings
Mad Paws uses a step-by-step product development approach to gradually scale up the
product offerings of pet souvenirs such as photo albums and accessories. In the early
stages of developing the new product category, Mad Paws focused on launching "DIY
souvenir" products. When consumers upload their pet photos or names on the purchase
interface, a picture of the product will be generated immediately, which will be made
and mailed within 2-3 days after payment. In the maturity stage, Mat Paws can launch
“Celebration souvenir” products, in which pet owners can choose matching costumes
for their pets and themselves during pet birthdays, Christmas and other festivals.
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3.2 Pricing & Promotion Strategies
There is no strong brand for the pet souvenir product category in the Australian pet care
market. Mad Paws can adopt value-based pricing, which is based on consumers'
perceived value of pet souvenir products (Dolan & Gourville, 2009). The pet souvenir
category can be advertised and promoted through Mad Paws’ own website and
streaming platforms such as Instagram and YouTube, with slogans such as "Record you
and your pet’s memories", " Dress up with your pet", "Celebrate every holiday together",
which can trigger emotional connections with consumers. When the public's awareness
of pet souvenirs becomes higher, more consumers will be attracted to buy the products,
and the perceived value of consumers will also increase. Mad Paws can do market
research to set a price that consumers can perceive the value and are willing to purchase.
Conclusion
Based on the comprehensive analysis of the pet care industry and Mad Paws, and
judgment analysis and strategic recommendation on the pet souvenirs category, Mad
Paws is well positioned to achieve revenue growth in the next 12-18 months.
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Reference List
AMA (Australia). (August 16, 2021). Total number of pets owned in Australia in 2019
and 2021, by type (in millions) [Graph]. In Statista. Retrieved November 06,
2022, from https://www.statista.com/statistics/1294587/australia-total-number-
pets-owned-by-type
Dartmouth. (n.d.) 7 Steps to Effective Decision Making. UMass.
https://www.umassd.edu/media/umassdartmouth/fycm/decision_making_proce
ss.pdf
Dolan, R.J. & Gourville J.T. (2009). Principles of Pricing. Harvard Business Press
LeMay, M. (2018, January 1). What is minimum viable product? [electronic resource].
LeMay, Matt. O’Reilly Media, Inc.
Mad Paws Holding Limited. (2022). PROSPECTUS. Mad Paws. https://s3-ap-
southeast-2.amazonaws.com/madpaws.public-documents/Mad+Paws+-
+Final+Prospectus+12.2.21.pdf
MarketLine. (2015, October 1). Pet Care in Australia. MarketLine Industry Profile.
https://advantage.marketline.com/Analysis/ViewasPDF/australia-pet-care-
30622
Richardson, A. (2022). Online Pet Food and Pet Supply Sales in Australia. IBISWorld
Report OD4086
Sarvary M. & Elberse, A. (2006). Market Segmentation, Target Market Selection, and
Positioning. Harvard Business Press
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Simmons, D. (2022). Mad Paws revenue more than triples as ‘network effect’ takes
hold. Business News Australia, August 30
UNICEF. (n.d.). SWOT & PESTLE. SWOT & PESTLE; UNICEF. Retrieved 3 March
2019, from https://www.unicef.org/knowledge-
exchange/files/SWOT_and_PESTEL_production.pdf