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Cat Fight in the Pet Food Industry

In: Business and Management

Submitted By vbeni07
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Cat Fight in the Pet Food Industry

While reading the case the first thing that comes to my mind is to analyze the market and competition.

The pet food industry seems to be very hard industry to enter for the new companies back in 80s. If we look at the firms, all of them are big, experienced and benefit from Economies of Scale, so for the new firm to enter this industry would be hard. So, that is why most of the firms in this industry do product diversification and enter multiple lines inside the industry, rather than trying to avoid threats from potential entrants. Among the competitors, I think, the best-positioned firm was Ralston Purina, because they were strong in almost everywhere: Cat Food, Dog food and all the sub-segments of these 2 major segments. But we have to also mention here that there were some other well-positioned firms on the market, especially in a specific niche like moist cat food, half-moist dog food, etc. One of the firms, that was very well-positioned on the market in moist-dog-food segment, holding more than 60% of market share, was Anderson Clayton, which was basically dominating the moist-dog-food market. However, they did not have strong position on dry dog food market and have not even entered cat food market. I am outlining this company, because the sentence in the ends of the case: “In mid-1986, the industry structure appeared as though it might change, as Anderson Clayton was rumored to be up for the sale.” So we know from the case that Anderson Clayton was sold, and some other player on the market would have bought it. It would be very reasonable for Ralston Purina to buy Anderson Clayton, because RP is not very well positioned on moist-dog-food market so they would strengthen their position, plus this company has big resources, so it would be easier for them to buy Anderson Clayton, so that they will keep being leader on the

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