Organic Pet Store the Legal and Regulatory

Organic Pet Store

The legal and regulatory environment for an organic pet store is relatively straightforward, with limited regulations. All of the products must be approved by the FDA, which means that all suppliers need to go through this process (FDA, 2011). Food that is advertised as being organic must be certified as such, either through the USDA or the Oregon Tilth. No generic organic certification is allowed -- all products sold as organic in the store are subject to the regulatory process. There are few major influences in the global, economic and technological environment, although organic pet food demand may be correlated to consumer confidence and discretionary income measures. The economic environment is challenging, since the economy is presently growing slowly and consumer confidence is relatively low (Conference Board, 2011). That said, consumer spending is rising (BEA, 2011) as the result of high confidence levels among the upper 20% of income-earners, an important demographic for our store.

Internally, the company has passionate management and believes it has sufficient capital and a good location. The main weaknesses for the company are its lack of brand recognition and the lack of business experience of the owners. It is believed that there is an opportunity for an organic pet food store in the area, based on observations of product availability in other stores and consumer behavior. The most significant threats come from major competitors, both in pet foods (Petsmart, etc.) and from health food stores that sell pet food (Whole Foods, etc.).

Using Porter's typology, the organic pet food store is operating on a focus differentiated strategy. This strategy implies that the product is of a differentiated nature and that the company has a narrow market segment (QuickMBA, 2010). In our case, we are limited in geographic scope, and we cater to a high-end audience that is interested in organic products and the well-being of their pets. This strategy demands that we are able to earn high margins on our goods, because we are unlikely to have a high sales volume.

It is worth noting that while still a niche, organic pet food is a rapidly growing niche. The category has grown from $14 million in sales in 2003 to $85 million in sales in 2009. The category grew by 48% in 2008 but suffered during the recession, growing only 10% in 2009. The organic pet food niche is just 6% of the natural pet food segment, so if we want to expand our potential business we can add natural pet food to our store. This begins to take us out the niche category and into the broader market.

It is not known who well the organization adapts to change. This is a new company that has yet to even open for business. How well it adapts to change will be tested when it opens, should business not be robust immediately.

The supply chain for the organization involves purchasing organic (and natural) pet food from suppliers. The wholesales will deliver the food to the store. There are no sophisticated ordering systems as of yet, although the store could develop one. The wholesalers deal with all of our competitors so it will be difficult to gain any competitive advantage as a small store through the supply chain. If local suppliers can be found from whom we can take deliveries directly, this would give us a source of competitive advantage, however.

Lastly, the organic mandate is part of the company culture. We are committed to having a casual culture that is based on strong ethical principles. This will guide us in our hiring and training processes, and we will promote a positive work environment that leads to the high levels of customer service that our target market demands.