Critter Campus Two sisters, Toni and Jill, are giving serious consideration regarding whether they might go into business together to operate a kennel that would provide high quality services at reasonable cost and cater to all types of animals, not just dogs and cats.

It doesn't seem likely that the two women can use the strategy of cost leadership. They have not completely established whether they can build a large facility. According to their figures, it would cost $2 million dollars to build a 20,000 sq ft facility, not including the cost of land. They have found a source for help with the 30% they must come up with, and a possible source for the other 70%, but none of this is firm, and it isn't clear how much their interested party is willing to contribute to their business.

In addition, their discussion has not considered start-up costs. If they both keep their current jobs the business will not have to support them right away, but this means that they will have to hire more employees. It seems likely, however, that the strategy of cost leadership will be limited to large chains, who can truly use volume to hold costs down.

The women have carefully considered differentiation. They began by grouping kennels in the area into two groups: lower quality and higher quality, and have decided to compete with the best kennels in the area. Then they considered the strengths and weaknesses of each competing kennel. They have the background to compete very competitively in two ways in particular: in animal training and in their ability to accommodate a wide type of animals.

The women have done considerable marketing research. They know about the strengths and weaknesses of their major competition in considerable detail. They have also identified a hole in the pet care market in greater Des Moines:...

This is an area where both women have considerable expertise. Their research also included careful look at Des Moines demographics and have considered what kind of location would position them best as Des Moines grows.
The women have a presumed distinctive competitive advantage because they have the skills to provide high quality supplemental services, particularly animal training. There is a real need in Des Moines for quality behavioral training for dogs. Another competitive advantage they did not discuss much is that only one of the competing kennels offers day care.

One thing the women have looked at imprecisely is risk propensity. There is no indication that they have looked at the difficulties involved in hiring competent and honest employees. The cost for insuring such a business might be considerable, but there is no mention that they have looked at the cost of insurance. If they had a fire and many pets died, they might face multiple lawsuits. Insurance should be an important part of their plan.

They have come up with a clever name for their kennel: "Critter Campus." The name emphasizes the wide variety of animals they would be willing to board as well as how they intend to distinguish themselves from their competition.

The women seem very open to discovery-driven planning. They did not start out with a rigid idea of exactly how their kennel should be run and what services it should offer. Instead, they took each piece of research and considered its implications for their business and ways to exploit it. One example is that of location. Although both women own homes, they have not tried to save costs by using land they already own. Instead, they started with a careful analysis of where the best location would be. Generally they have refocused their ideas based on the…