Hero Dog Treat Harvard Case Solution & Analysis

Hero Dog Treat Case Study Solution

Executive Summary:

Hero Dog Treats offers single component dog treat products that bolster the Troops, the Canadian Service Dog firm, and contracts Community Living work force. The majority of the products are all-regular, sourced from government-assessed providers.

Along with this, the company provides an extensive variety of products accessible across the nation; from chews like prong, bully sticks, to renowned training treats, for example, meat liver with the purpose of treat your HERO for all that they do.

The company is facing the problem of development of new products as the demand for pet food is increasing and hence, the company wants to make a suitable purchasing strategy that would help to maintain the budget and competitive advantage. For this purpose, the case provides a number of alternatives and it allows selecting best one based on its advantages and disadvantages. The alternatives are such as; alternative 1:  Strategic outsourcing; alternative 2: Current supply chain in order to optimize the cost and lastly, alternative 3: Different supply chain for each different line of products.

After the analysis, it was observed that that alternative 1 is the best option and implementation plan is also provided with effective monitor and control process.

Introduction:

The company’s distributors want to expand the range of products at a very competitive price and with high quality in the market. The company is facing the problem of purchasing raw material as it would increase the overhead and budget cost.The total of 701 new pet products has been introduced in the Canadian market from 2006 to 2011, which includes sub category in this industry such as;

  1. Dog snacks and treats
  2. Dry Dog pets
  3. Wet dog food
  4. Dry cat food
  5. Wet cat food

Therefore, the firm wants the growth of new and diverse pet food that focuses on age, breed and health of the pets. The Canadian market’s demand is in an increasing trend and it has been assumed that it will increase the sales by 2.2% and with the amount of $ 1.1 billion by 2016 because the customers treat their pets as their family members.

Issues Identification:

The demand for the pet food is increasing at national and international level and the distributors and suppliers of the company want to increase and develop the new types of products with high quality products at the competitive price in order to maintain the competitive advantage in the industry.

Therefore, the problem arises that the company would have to adopt new purchasing strategy by creating the pricing leverage that would provide the ability to purchase the raw material at 20% reduced cost of production by providing different range of products in various packages. The new purchasing strategy would help to decrease the procurement cost and financial risk.

On the other hand, Leendert is considering importing the raw material through commercial transaction, and he expects that it would be challenging to negotiate with the international suppliers. It would be very difficult to manage the cultural and language differences as he has no experience in dealing with overseas companies.

Environmental and Root Cause analysis:

The Canadian market is growing by increasing its range of products because it is analyzed that the demand for pet food is increasing that would generate more income and profit for the company. Therefore, the company wants to increase the range of products by changing its purchasing strategy that would reduce the cost of production. The root cause of problem includes:

  • To manage the internal operations
  • To meet the objective of increase revenue
  • To remain competitive by developing range of products at low cost
  • To provide traceability
  • Weak links with procurement companies
  • High cost and price risk

Alternatives:

Most of the companies have added to the moving of the purchasing strategies because complex plans of action at worldwide scales combined with market demands have required organizations to set up assembling closer to the business sectors and additionally in areas where conversion expenses are moderately less expensive. This would encourage the business by a strong vendor base, which can guarantee supplies in all locations. Therefore, in order to shift its purchasing strategy, following alternatives have been examined that will provide expected benefit by developing buyer to supplier relationship.(cemtre, 2015)

Hero Dog Treat Harvard Case Solution & Analysis

 

Alternative 1:  Strategic outsourcing:

The large multinational organizations see the world as one huge market and source from numerous suppliers, irrespective of its origin country as it would help to attract the customers. Strategic outsourcing implies getting the best raw materials at the best expected value by using a procedure that accomplishes a notable decrease in operating expenses.........................

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