COURSEWORK

BUSINESS PLAN FOR ESTABLISHMENT OF

A DOG HOTEL “AMIGOS” IN BOJURISHTE VILLAGE, BULGARIA

Course code:                         EMBA108

Course Title:                         STRATEGY FORMULATION AND BUSINESS DECISIONS

Instructor’s Name                STELIOS KEHAGHIAS

Programme:                        EBMA

Word count:                         16 455

Group:

Elena Bocheva                                 (Reg. No. EX28105)

Lyuben Nanov                                (Reg. No. EX28108)

Lyubomir Iliev                                 (Reg. No. EX28055)

Petia Dombalova-Sechenska                 (Reg. No. EX28061)

Alexander Ivanov                                 (Reg. No. EX28104)

September 2009


EXECUTIVE SUMMARY

The aim of this work is to present a winning strategy for business development of a hotel for dogs in Sofia, under the name AMIGOS. We pursue a thorough analysis of the company's market positioning, growth prospects, resource planning and competitive advantages.

Initially, we shape our mission and vision and critically observe both the external and internal environment. We begin with PEST analysis, which enables us to understand better company’s macro surrounding, and afterwards continue with the industry analysis, based on Porter's five forces. Further, we outlay the company’s competitive positioning and derive driving forces to change, as well as key success factors. Moreover, determining strategic and financial objectives, we can define the desired market position through growth strategy and generic strategy.

The main marketing objectives along with a thorough marketing plan and a complete set of advertising tools is presented in the Marketing section.

Besides, Operational part gives the detailed outline of the practical organization and implementation of a whole business idea. We explore different techniques for process development and improvement.

The Finance section encompasses the investments, capital structure and scenario-based profitability analysis. As a result, business evaluation is derived under various assessment methods that are subsequently used in the exit strategy framework.

We conclude that a carefully-thought management strategy can turn into successful business venture, when comprehended as a complex of managerial skills, professional expertise and strong market awareness.  


TABLE OF CONTENTS


  1. INTRODUCTION

 

  1. Purpose and goals

The paper discusses the establishment of a dog hotel in Bulgaria. The goal is to draw a  business model, ensure financing and shape an exit or continuation strategy at end-Y3.

  1. Method and limitations

We try to create a conceptual model to a specific entrepreneurial activity that has no analogue in the country. As a ground for strategy development, we establish a closed-loop management system (Kaplan and Norton, 2008), describing the business process from various possible aspects – business strategy, markeing, operations and finance. To illustrate our proposal,  a strategic map is drawn and various Six Sigma tools are applied -- process map and Gantt chart, (George et al., 2005; Knowles et al., 2005). Besides, we refer to relevant research and to market data. In order to overcome the lack of specialized market expertise, we employ a multifunctional team and hire a professional consultant with extensive experience in dog care and training.  

  1. Management team

Petya Dombalova, 37 years old:

  • Education: Master Degree in Law, the Sofia University “St.Kliment Ohridski”;
  • Business experience: Legal Manager of a large-scale mining operation in Bulgaria, a subsidiary of a Canadian-based mining company. Recently appointed a member of the BD.
  • Professional skills: Experience in setting up commercial companies; employment issues; environmental protection legislation; commercial litigation.
  • Personal credentials: Hard worker; tough negotiator; strong team orientation.
  • Project-related responsibilities: Legal compliance, marketing and operations.

Elena Bocheva, 37 years old:

  • Education: Master Degree in Finance, the Sofia University of National and World Economy;
  • Business experience: Credit risk manager in a top 5 Bulgarian bank.
  • Professional skills: Experience in creditworthiness analysis, debt collection etc.  
  • Personal credentials: Hard working, motivated, strong team player.
  • Project-related responsibilities: Finance, overall structure and formatting.  

Lyuben Nanov, 38 years old:

  • Education: Master Degree in Accountancy from the University of Varna;
  • Business experience: Head of Treasury in a top 5 Bulgarian bank.
  • Professional skills: Experience in Financial markets and portfolio management.  
  • Personal credentials: Hard working, motivated, strong team player.
  • Project-related responsibilities: Strategy and business development, external and internal environmental analysis, project risks and exit strategy.

Liubomir Iliev, 42 years old:

  • Education: Master Degree in International Trading from Economic Academy, Svistov; Master Degree in Mechanical Engineering, Technical University, Sofia
  • Business experience: Head of Marketing in a foreign company in Bulgaria.
  • Professional skills: Ability to driving large-scale projects. Involved with staff training and marketing budgets preparation.
  • Personal credentials: Inovative thinking with managerial approach.
  • Project-related responsibilities: Sales and Marketing.

Alexander Ivanov, 35 years old:

  • Education: Master Degree in Finance from Economical University of Varna; Master Degree in Law from Technical University of Varna.
  • Business experience: Head of Sales, Toyota dealership, Varna.
  • Professional skills: Knowledge of Marketing, Advertising, Finance and Law
  • Personal credentials: Hard worker; team playerl tough negotiator.
  • Project-related responsibilities: Strategy, external and internal environmental analysis, overall structure.

External consultant: Krassen Hadjiev, 37 years old:

  • Education: Executive MBA, American University in Bulgaria, Bachelor of Arts in Business Administration, American University in Bulgaria;
  • Business experience: Senior Brand manager, Toyota Balkans
  • Professional skills: Knowledge of Marketing, Advertising
  • Personal credentials: Hard worker; tough negotiator; team player
  • Project-related responsibilities: Consultancy for the business setup based on   experience as a chairman of the Bulgarian Golden Retriever Club.

  1. Business model

Our business model rests on the following principles:  

  • Strong customer relationships;
  • Complex value proposition;  
  • Annual product and capacity expansion;  
  • High profit margins.

Value Proposition

Our value proposition includes professional upscale dog care and associated services (training, grooming, veterinarian care, consultancy, merchandising and entertainment) at a competitive price. With the growing number of pet raisers, we believe that this is the right timing for entering the market. Simultaneously, with busy schedules, vacations and other traveling occasions, owners need somebody to look after their pets.

Moreover, the dog care service is Sofia is underdeveloped -- there are eleven dog hotels with a total capacity of 125 dog crates, available to 150,000 dogs in Sofia. Further, new stringent regulations for dog boarding facilities, imposed by the EU, may force some market participants out of business, thus deeping the market inqualities.  

Customers

We will target dog-owners with above-average income, who are prepared to pay for a professional care for their pets in a high-level environment.

Facility Design Concept: We will develop our dog-care business as a green-field project, construct separate, spacious and cosy doghouses with autonomous electricity, gas heating and sewerage system. Besides, we will allocate large playground areas to ensure sufficient opportunities for our dog-customers to walk and play in the company of our staff and other dogs. Such design will help us to become the best and most preferred dog-hotel in Sofia and outperform all rivals.

Service Offering: The dog hotel AMIGOS would gradually expand and enrich the  services oferred, as follows:

  • Year 1 /project 1st phase/

        A1: Main service: dog care.

        B1: On-site behaviour training.

        C1: On-site grooming.

        D1: Vet service: medical check-up and vet care for occupants.

        E1. Retail sales: food, accessories, toys, books and equipment.

  • Year 2 /project interim phase/

        A2: Dog care: swimming pool oferred .

        C2: Grooming: at customers’ home.

        D2: Vet service: non-emergency manipulations (vaccinations, disenfestation).

        E2: Retail sales: dog fashion as an additional oferring.  

        F1: Entertainment: Dog birthday parties.

  • Year 3 /project 2nd phase/

        E3. Retail sales: vet pharmacy.

        F2: Entertainment: contests.

To enter from phase 1 into the interim phase, the business has to comply with the debt covenants. Likewise, a prerequisite for entering into phase 2 is net profit generation.

All services will be offered at easily accessible location, near Sofia. In addition, we will provide transportawhich from and to the hotel.

Capacity

We planning to start with 35 doghouses and to expand them to 45 in Y3 (App. 6).

Business start

The business will be carried out by AMIGOS limited liability company, co-owned by the PM team. The experience in setting up companies, construction project management, licensing, financing and marketing will allow us to set up the firm, obtain funding, construct doghouses and meet our first customers in two-month time.  

Business financing

Under the pessimistic scenario the start-up funding stands at EUR 10.000 (PM team), EUR 35.000 (a bank loan) and profit reinvestment after Y2 (see App. 2).

Revenue generation

Considering whether the investment will have a positive return, we used our pessimistic scenario (p. 49) for 31.4% dog-kennel annual capacity utilization. Our business model is based predominantly on services (boarding and training), which account for 89% of the revenue (App.11). Besides, the main revenue generator (dog hotel) provides regularly at least 54% of total sales.

Profitability

Low market penetration, economies of scale due to market expansion and utilized benefits of the learning curve are presupposing our business to gradually gain a substantial profit margin.

Return on Investment (ROI): for both PM funding and the Bank, ROI is strictly positive after Y1 and economic value added to the company has been constantly growing to more than EUR 39.000 in all cases. The development of the other return indicators ROE and ROA also shows constant improvement (App. 14).

Expanding and profit sharing: Despite unsatisfactory results in Y1, in Y2 the enterprise takes advantage of its better brand recognition, business establishment and new service offers, hence, ending at a net profit under all scenarios (App. 14).

In conclusion, this is a financially viable business, which ensures a positive net return since Y2-end and generates dividends for the PM team after Y1 under all scenarios.


  1. MISSION AND VISION

According to Kaplan and Norton (2008) the management cycle begins with articulation of the company’s strategy. Similarly, Thompson et al. (2008) claim that developing a strategic vision is the first phase in the strategy-making process.

The MISSION of AMIGOS is to provide dogs of any breed, size and age a professional care in an upscale, safe and joyful environment and dog owners with comfort and peace of mind while leaving their pets away.

The VISSION of AMIGOS is to become the preferred dog hotel owner in Sofia by  providing the best combined dog-care service

Our aim is to gradually build customer loyalty and brand recognition in order to  achieve higher capacity utilization and to earn economy of scale. Thus, we would improve our financial performance and would generate higher profits.


  1. EXTERNAL ENVIRONMENAL ANALYSIS

  1. PEST analysis

  1. Political

Under Bulgaria's former tri-party coalition (2005-2009), Bulgaria joined the EU. Up to 2009, the country enjoyed increasing GDP growth and higher employment, but since Q4, 2008, it has been severely affected by the global financial meltdown. The latest parliamentary elections (July, 2009) were won by the centre-right Citizens for European Development of Bulgaria (GERB), led by Boyko Borisov. We do not forecast business risks related to the political environment.

  1. Legal

The new Bulgarian Constitution (1991), embraced the principle of free entrepreneurship. Since then, the legislation has been steadily developing towards enhanced business framework. In compliance with EU, regulations’ rules for environmental protection, and most recently, for animal care, were adopted. These include the Veterinarian Activity Act (2006), which established  requirements for pet’s registration, home and medical care, and also the Animal Protection Act (2008), which regulates the protection of life, health and well-being of animals. Further, the Animal Protection Act establishes requirements for at-home dog-care. A regulation regaring dog training was adopted in early 2009. Effective since July 2009, is a regulation on facilities for pet boarding. This regulation defines pets’ basic living conditions and sets rules regarding licensing of dog-boarding facilities, their design, staff, etc. The regulation watchdog is the National Veterinarian Service.

Regulation/de-regulation trends

With the recent election of a right-oriented government, we expect lowering of some  admistrative barriers for business establishment. The new government stands firmly behind the currency board arrangement (CBA) until the adoption of the EUR. Hence, our model assumption for fixed FX rate is sound.  

  1. Economic

Stage of the business cycle: In the absence of a new severe negative international shock and/or a serious domestic policy mistake Bulgarian economy will resume its upward GDP growth by end-2010. Currently, the economy is in recession with expected annual drop of -6% by end-2009. However, as each recession hits mainly the average income bracket, we envisage that our premium-based business segment (above-average income dog owners) would not be severely affected.

Industrial Production: Similar to other CEE countries, the real estate buble have been financed predominantly from abroad. Unfortunately, since the peak in Q2, 2008, FDIs are constantly falling down and, as a result, industrial production index has been steadily declining (Figure 1). Even so, it does not impose a threat on our business.

Inflation: Bulgaria faced an inflation peak (15.3%) in mid-2008, under the skyrocketing pricing of real estates. In the following quarters the confidence in the economy started to decline, as the economy was affected by the worldwide financial crisis and liquidity shortage. In the assumptions, we ensisage a moderate inflationaly enrioment of 6% p.a.  

Unemployment: In 2008, unemployment fell to 6.3% -- the lowest rate since early nineties, mainly due to GDP growth and positive expectations of the country’s EU accession. The real growth in the construction sector, tourism and services has the biggest contribution in the employment. However, due to the economic slowdown in EU countries, the unemployment rate is set to rise, in late 2009 and yearly 2010.

Short-term interest rates: Based on the above, Bulgaria started to experience negative FDI since Q3, 2008, initially provoked by massive flow out of the real estate sector. Simultaneously, locally operating branches of foreign banks started to reassess their country risk pricing/positions and to cease lending. In Figure: 4, we depicted the dynamics of the difference (spread) between the 3M SOFIBOR and the 3M EURIBOR. It shows how expensive (higher spread - risky) is lending between banks in local currency, compared to EU. The spread has widened to 4.71% in June 2009. Recently,  the spreads started to tighten on the basis of huge liquidity that foreign central banks were pouring into the banking system. It is expected the negative tendency to stop evolving. However, our price of capital is aligned with the latest interest rate statistics.

Credit Default Swap: The new circumstances impacted the CDS (Credit Default Swap), a measure that represents the risk associated with the ability of the sovereign to repay its long term obligations, mainly in the form of bonds. It is used (traded) by market participants, possessing assets in the form of bonds as an insurance against default of payments of the respective sovereign. According to Figure 5, there was an increased concern over the economy of how the government and the business will tackle the problems related to the high indebtedness of the private sector, provided that current account deficit is increasing and the global economy is heading south, as the demand slumps to a record low levels.

FIGURE 5

Source: Bloomberg (copied August 3, 2009)

Currency stability: The probability of local currency devaluation is very low.

A discretionary policy of (BGN) lev devaluation together with ERM - II entry at a new central parity is a scenario with positive probability, but with enormous macroeconomic and prudential risks, in view of the large outstanding amount of private-sector FX loans and its potential implications for domestic growth and the medium-term inflation outlook. Maintaining the currency board for as long as it takes to enter the euro area is a high probability scenario and politically easier to implement as it avoids the short-run costs of devaluation and puts less of a burden on Bulgarian policy makers.

  1. Socio-Cultural

Demographics: Population has been steadily declining for the last 18 years and currently stands at 7.6 MN people. This fact is attributed to the negative population growth (-5%) and the high emigration. Market forecasts are for continuation of this trend. Urbanization is just another demographic trend. Presently, 70% of the population lives in the cities; 40% of those are concentrated in the 8 largest cities in the country. Our business is favourably affected by the latter, as Sofia is the larget Bulgarian city with the most densely populated area.

Population and age profile: An important problem is the aging of the population, which leads to a future decrease in the workforce. The average age of the population in 2008 was 41.5 years and the average lifespan in 2008 was 72.7 years.

Population attitudes towards dog kennel: There is no statistics of the distribution of pets among different ages of the population. Most young couple associates their well being with a home and a dog. The average number of dogs in Sofia is 150 000.

Socio-Cultural changes: In Bulgaria, the majority of the nation used to have pets in-home. This fact could be explained with deeply rooted psychological factors (pets are the best human friends etc.). Hence, Bulgaria has one of the highest rate of pets per 1.000 people.

Technological Factors: Internet has a multifunctional aspects to our business, as to watching online your pet playing, during its morning walk in the kennel, or just simply click and buy its favourite food from the online shop.

 

  1. Five forces analysis of competition

Trying to analyze sector’s attractiveness, we pursue the Porter’s five forces analysis.

Rivalry among Existing Firms: Our own research shows existence of 11 dog hotels in the town of Sofia, with total capacity of 125 cells for appr. 150 000 dogs in Sofia (Punchev, 2009 and Krasteva, 2007). This data indicates low rivalry in this sector.

The dog market in the town of Sofia can be determined as a market of a monopolistic rivalry. This market is characterized with the presence of a large amount of similar in size competitors and absence of significant barriers to entry. Differentiation of the product appears to be the only possible way to influence the price. According to Savov et al. (1998), a successful product differentiation in monopolistic rivalry can be provided by active and well–prepared advertising campaign.

Other basic characteristic of the sector is that neither one of the rivals has a dominative part on the market, which according to Stankova (2005) is an appropriate indication for the possible coordination between competitors. As a measurement of the number and relative strength of the companies in the field, Porter suggests defining a coefficient of concentration. Its value for dog kennel market in the town of Sofia is 52%, but this number is relative and can’t be a measurement in a still growing market. According to Stankova (2005), coefficient’s significant deficiency is its "insensitivity" to the options for allocating shares among competitors and to the life stages of market development.

Further, there is no clear product differentiation between market rivals. According to Stankova (2005), entering of new companies into that type of market can be very destabilizing for the other entrants. Neither of the rivals has excess capacity.

The main characteristics of the existing hotels were as follows:

Other specifics of the dog kennels market are the equality in values of variable and total costs. For the company’s success are important the facilities as well as staff quality. Dependence on specific assets represents an exit barrier.

Basic factors for rivalry in the sector are price and quality. The dog owners are more sensitive to quality, rather than price.

Another characteristic of the industry is that it is influenced by seasonal changes in consumer demand (peak during the summer and holidays and low winter season).  

Threat of Substitute Products and Services: The hotel for dogs has no direct substitute. Hence, we subscribe for a clear differentiation strategy.  

This brings the idea of strategic partnership with vet cliniues, transport companies, online retailers, in order to achieve customer satisfaction.

Presently, market participants try to play a cost-cutting strategy, which does not attract a lot of clients, who are exceptionally sensitive to service quality, rather than price.

Bargaining Power of Buyers: The ratio between potential clients (150 000 dogs) and the total capacity of the existing dog kennels in Sofia (125 cells) shows low concentration. Actually, the dog owners are unable to influence the switching costs. We can determine that the price sensitivity of the buyers is on a medium level, while sensitivity when it comes to quality is high. That buyers’ power is not big is evident from their mentality on the market – in case that they are not satisfied with the services offered, they just don’t use them.

Bargaining Power of Suppliers: Suppliers of dog hotels include food and accessories re-sellers. Presently, there are enough suppliers of both items. A popular dog hotel with developed veterinary clinic will always be a priority for the client and for the supplier. All this determines the strength of suppliers as low to medium.

 

Threat of New Entrants: The basic entry barriers are:

  • Existence of regulations;
  • Specific business equipment;
  • Economy of scale/scope;
  • Expectated retaliation by entrenched market participants in response to new entrants;
  • Brand loyalty;  
  • Initial investment

At this stage, due to underdevelopment of the offered dog hotel services, the investment needed is insignificant. However, a decent hotel can be built with about EUR 50 000. After a few years, though, this barrier could be increased.  

Conclusions: Dog kennel’s market in Sofia is undeveloped, which provides exceptional business opportunities. In addition, market concentration is low and the competition is weak. There are no substitute products, and after years it are unlikely to appear. The power of the buyers is expressed in their sensitivity to the service quality. In the presence of more rivalry and increasing of service quality, the number of customers will increase, but in parallel, their requirements will also increase, in accordance with their market power. At this stage, there are no signigicant entry barriers (except for the legal one), but as the business matures, they are likely to increase. The outcome of the five forces analysis is represented below:

FIGURE 6

Source: Adapted from Porter (1985)

  1. Three pairs of strategic maps

According to Thompson et al. (2009), strategic group mapping displays market positions of rival firms. Strategic Group Map indicates a clear absence of dog hotels in many of map’s zones, which proves possibilities for differentiation. AMIGOS’s policy is to present a higher-level quality compared to its rivals, on prices similar to the existing one. We are positioned closely to Dog Hotel Chopper, which is one of the licensed hotels with the biggest capacity and best market quality. Chopper is the rival which position we must follow most carefully after entering on the market.

On the market there are no companies with big capacity of doghouses. The plan of 41 cells in Y3 will turn AMIGOS into the hotel with the biggest capacity.

FIGURE 7

Source: Adapted from Thompson et al. (2008)

GE matrix

The relationship between the strength of the rivalry and the attractiveness of the sector is done by General Electric’s matrix. The market of AMIGOS is characterized by medium to high attractiveness. This is predetermined by the underdevelopment of the market, expected high growth in the next few years, low barriers to entry and possibilities for differentiation. Simultaneously, the rivals’ positioning will be medium to high level, because of the clear strategic and marketing analysis, the expected new level of service, rightly defined KSFs, early entering into the field and high planned capacity. Hence, the positioning of AMIGOS shows great growth prospects.

FIGURE 8

Source: Adapted from Kotler et al. (2005)

The BSG Matrix

The low market share when entering the market and the expected high growth rate determines the positioning of AMIGOS in the category Question Marks, according to BSG matrix. This positioning is logical to the connection of BSG matrix with the stage of life cycle of the sector as a whole, which we can determine in the stage of Growth.

At the stage of Question Marks, the company should decide either to continue to invest money, aiming to turn a business item into Star, or to leave the market. According to BSG this is a stage, in which the company will have to very precisely plan and predict the return of its investments because of the relatively high demand, combined with small amounts of income, because of the low market share. The basic purpose will be generating a larger market share and turning into Stars.

FIGURE 9

Source: Adapted from BCG Matrix (1998)

  1. Key success factors

According to Thompson et al. (2008) KSFs are those competitive factors that most affect industry members’ ability to prosper in the marketplace. The correct definition of the key factors of success will give us the ability to develop a working strategy. The correct introduction and the willing for constant improvement in the introduction of the key factors will give us rival advantage.

Quality of service: Presently, many clients do not use the dog kennels’ services due to low hygiene. Hence, the basic rival advantage of AMIGOS has to be the high quality service. We permanently have to work to provide a clean, upscale, enjoyable environment conductive to giving professional trusting service. This will affect in general on increasing the complete customer satisfaction, which is a guarantee for increasing the sales.  

Availability of excellent professionals: One of the important features for business success is the availability of good specialists, working with the dogs. In the previous chapters we mentioned about the BCG’s experience curve, which indicates the effect of increasing profitability with time (Hindle, 2008).

Product complexity: Other things being equal - for example, high quality service at equal price levels and availability of good specialists - offering a wide range of services in one place is seriously a key competitive advantage.

Strong e-commerce: In the era of high technological development, AMIGOS should rely on timely introduction of technological improvements. Hence, for the urgent developments of a new business, the existence of website is exceptionally important. The site would include options for online ordering, shipping, and payment.

Convenient location: The proper positioning of the hotel and easy access to the service are extremely important key to success.

Environment: AMIGOS would provide a clean, upscale, enjoyable environment conducive to professional service.

Wide range of services oferred at one-stop location. 

Reputation and a well-known brand name: Over time, good service creates a positive image and attitude in clients. This is a major key factor in an yet devoloping business, especially when sensitive to service quality. Besides, good image creates customer’s loyalty to the brand, which is a long-term guarantee for success.

  1. Driving forces to change

Changes an industry’s long-term growth rate: Since this is a type of business which is absolutely new and is yet to develop, we envisage systematically increasing growth rate. By improving the service and through various marketing activities, we can expect increasing demand.

Demographic changes: Unlike the national trend, Sofia, Varna and Burgas are expected to grow in population (Chernev, 2009). Further, Sofia offers the highest ROI with average salary is twice higher than for the country.

Growing use of the Internet: According to Thompson et al. (2006), the Internet is an important distribution channel. The number of consumers using the Internet systematically is increasing every year. Hence, we can expect an increase in the number of users who need different types of services related to domestic animals and are looking to solve their problems by using the global network.

Technological change and manufacturing process innovation: Technological advance affects every area of human activity. Along with Internet, technological innovations facilitate the provision of video connection between the dog and its owner.

Entry or exit of major firms: Entering of one or more foreign companies in the geographic market, dominated up to this moment by local firms, always changes rivalry. (Thompson et al., 2008) In this connection with the growing market of dog hotels in Bulgaria we can expect invasion on the market of both local and foreign companies which will try to settle, bringing in the experience they gained. Moreover, they will be attracted by the high profit margins in the marketplace. Moreover, we  expect horizontal and vertical integration as a result of strategic partnerships with food suppliers, medical suppliers, breeders, etc.

Regulatory influences and government policy changes: The tendency in strengthening the impact of eco–organizations and associations for animal protection on turn cause modification of national law. This necessitates the need to establish legal regulations governing the requirements to objects for the rearing, breeding and supply of pets.

Changing societal concerns, attitudes and lifestyles: There is a clear trend in people of retirement age, whose grown up children have left their homes, to pay attention to their pets.  In this case pets turn into integral part of the family and the diligence of their owners to take care of them as grown up people. Our aim is to develop beliefs and attitudes in the target market participants, as to provoke a buying decision behavior.

Another tendency is to work more hours and more days, which serves as external stimuli for buying behavior. Many professionals are willing to pay more for good breeding of their pets in an environment that closely resembles dog homes.


  1. INTERNAL ENVIRONMENTAL ANALYSIS

  1. SWOT 

In order to enrich the first stage of management system -- strategy development, we prepared a detailed SWOT analysis (Kaplan and Norton, 2008).

  1. Competitive advantage

Further enhancement to strategy development is achieved by the company’s competitive positioning (Kaplan and Norton, 2008). Consistent with its differentiation approach, the PM team compared AMIGOS with other market participants and, as a result, derived its competitive edge out of the sources:  

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  • Complex value proposition: one-stop, high-quality dog care product  /dog care enrivonment and resources – the best; unique combination of dog hotel with a shop, medical care and vet pharmacy that are sold both on-site and online/;
  • Innovation through new market oferrings (grooming and dog-related entertainment since Y2);
  • Constant enrichment and expansion of the the service line (i.e. swimming pool oferring since Y2, vet pharmacy introduced in Y3). Contrary to other market participants, our PM team is tighly focused on continuous development;
  • Superior product quality based on customer service, flexibility and upscale environment with conference facility with camers, ...

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