Company Analysis: PetSmart Company

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Table of Contents

A Brief Overview of PetSmart
Research Aims
Reason to Choose
Enterprise’s Policies, Practices, and Analysis
Enterprise Policies
Enterprise Practices
Analysis
Summary and Conclusion
References

A Brief Overview of PetSmart

PetSmart is a United States pet shop network active in the U.S. and Canada. It emerged in 1986 and expanded rapidly in the 1990s, with acquisitions and new shop openings, as there was a time when many Americans started to have pets (Brennan, 2013). While in 2010, estimated Americans’ spending on pet were more than $45 billion, the 2021 number is more than two times larger: $120 billion (Insurance Information Institute, 2021). It means that the business is constantly growing, providing many new opportunities for a company as large as PetSmart. While at first, it was a discounting pet shop, it then developed into a supermarket of pet-related accessories of any kind, both online and offline. In addition, it provides services for pet owners, such as pet hotels and grooming sessions, operates a charity fund for pets, and organizes events.

Research Aims

The research aims to explore and understand PetSmart’s business policies and practices; then, they will be analyzed to provide thorough information about their efficiency and ethics. At first, the information about the company is found in articles, statistics, news, reports, and other trusted sources. Based on this information, consequences are analyzed, providing answers to the research questions. The main objectives are PetSmart’s business success, its policies about pet safety, employee safety and convenience, business tactics, and corporate responsibilities. While the company’s policies can be found in its own materials, third-party references in news and other articles are necessary for the full picture. Research articles and database websites are to be used to provide numbers necessary for the thorough analysis.

Reason to Choose

The company is the largest pet shop provider in the United States and one of the largest in the world, and, thus, has a large influence on the pet market and pet lives. Its annual revenues oscillate between $5 and $7 billion in 2019–2022, without significant growth and fall (Statista, 2022d). Its closest competitor, Petco, will have a much smaller $3.8 billion in 2022 (Statista, 2022d). However, while the pet market is constantly growing, the company’s earnings remain the same, which may point out the company’s stagnation. Still, PetSmart has all perspectives to keep its leadership position, and it is essential to understand what allowed it to reach this position. It is the first reason to choose PetSmart as the company for analysis.

As pets are living creatures who can feel, they should be treated with care and without harm, and it is crucial to see whether PetSmart corresponds to those requirements. It is the second reason to choose this company: from an ethical point of view, it is vital to check the decisions of the largest pet retailer in North America. It will give an insight into the current situation with animals’ safety and health, enabling one to see whether people have respect for those living beings.

Enterprise’s Policies, Practices, and Analysis

As one can see, PetSmart is a large and influential pet company. It has almost 90% brand awareness and 50% brand loyalty, which means that half of all Americans visit it regularly (Statista, 2022a). It was chosen as it is important to understand the ethical position of such a sizeable pet-related company and analyze how it reached its success. Primary information about the company’s business policies was taken from its own report about ethics and conduct, where they are thoroughly described (PetSmart, 2019). However, additional information from statistical databases and other sources was used as well, as some facts contradict the declared objectives. For example, there were several reported cases of animals’ violent treatment in PetSmart’s shops (Lewis, 2022). To understand how often the company breaches its own policies, as many cases as possible should be studied.

Enterprise Policies

Animal Policies and Their Breaches

PetSmart policies regulate the conditions in which the company’s animals should be kept, employees’ uniforms, and the code of conduct. Animal policies include the company’s official positions toward pets, requirements for their living, medical help, and safe food. All pets should obtain safe food, follow all applicable safety rules, and obtain medical help as soon as necessary (PetSmart, 2019). According to the company’s claims, they apply to the company’s vendors, customers, and partners as well as to PetSmart itself. Animals are considered part of the company’s family and treated with love and respect: their comfort and health are the first arguments for all employees and business decisions. In case of violations, all employees and pet parents are encouraged to report the company via speak-up resources.

Despite strong pet-protecting policies, the main breach is the company’s partnership with unethical pet providers and reported terrible conditions in some shops. The company is widely criticized for such a partnership, and there is a petition that calls for PetSmart’s condemnation of this (PetSmart Reptile and Amphibian Petition, 2022). According to PETA (People for the Ethical Treatment of Animals) investigations, some of its vendors are indeed cruel to their animals, such as in the case of Holmes Farm in Pennsylvania, where rabbits and other small animals live in small cages without proper hygiene (Schelling, 2016). Thus, the company can breach its own policies, which may be considered a disadvantage.

Employee Policies: Diversity, Inclusion, Equal Opportunities

Employee policies regulate the employees’ responsibility toward each other and the relations between them and the company. According to its ethical code, all employees have equal opportunities and are protected from unethical treatment, but they should follow their responsibilities well (PetSmart, 2019). They have access to speak-up resources, which they can use to report any violation of their right. There are reported cases of wrong treatment: low wages, up to the minimum, a lot of exceedingly hard work, and unsafe conditions (Lewis, 2022). It means that PetSmart’s employees’ policies are limited and constitute a weak place for the company.

Business Policies: Legality and Corporate Responsibility

According to PetSmart’s code of conduct, the company is intolerant of bribery, corruption, information breaches, unfair competition, and other unethical business practices. All employees are prescribed to reject proposals for bribes and report them to the speak-up resources (PetSmart, 2019). Fixing prices, dividing markets, and boycotting other companies are prohibited as elements of unhealthy competition. The company’s Legal Department is responsible for solving all these issues and ensuring that the company’s staff comply with all laws. In addition, the company’s policies encourage participation in political and social events aimed at defending the environment, protecting human rights, and improving the community in general (PetSmart, 2019). Lastly, policies connected with corporate responsibility include those aimed at protecting human rights, social order, and the environment.

Enterprise Practices

While policies are prescriptions of how the company and its members should behave in various situations, PetSmart’s business practices are actual company actions in multiple situations. It is the field where a company’s ethics and efficiency may be measured. While a company’s policies and ethical codes are well-designed, they are only sometimes applied well. As PetSmart is a pet company, three primary practice areas may be specified: business decisions, practices with pets, and employees.

Successful Business Decisions

As mentioned, PetSmart’s growth was significantly caused by acquisitions: it purchased fast-growing local pet businesses in the 1990s and various online pet-related startups in the 2010s. In 1990, it grew in different U.S. states, primarily by purchasing local stores and rebranding them as PetSmart (Brennan, 2013). It caused a snowball expansion due to the emerging popularity of pets among Americans, and soon, the company spread its presence to Canada. Starting from the 2000s, PetSmart buys young progressive companies, adapting their business models and actively conquering the online pet market. For example, in 2017, it acquired Chewy, a large online retailer of pet-related goods, which was highly successful (Debtor, 2019). Today, PetSmart offers a wide choice of pet accessories, services, medicals, as well as various small animals (MBA Skool Team, 2020). To summarize, the company’s business decisions are primarily successful, providing it with a leadership position in the market.

Pet Protection, Charity, and Controversies

Pet protection is one of the crucial missions of PetSmart, as is stated in the company’s vision and mission, and the company strives to apply this principle in its practice. It has a special division, PetSmart Charities, which acts as a fund for pets’ needs, such as food and medicals. Instead of selling cats or dogs, it provides its stores as shelters for them, allowing them to live there as long as necessary (Find a Pet Adoption Center near You, 2022). The company offers many unique accessories for cats, dogs, and other animals, which are personalized (Brennan, 2013). In addition, it propagates the idea that animals are living beings that deserve equal treatment as humans. However, as one will see, there are issues with PetSmart’s animal treatment, which question its good intentions.

These issues may be divided into two categories. First are unethical practices in the PetSmart shops, hotels, or grooming rooms, and second, PetSmart contacts with unethical vendors. There were cases of pet death during grooming sessions, more than 40 cases in total from 2010 (TMZ News, 2022). Despite being infrequent, each is a serious question to pet safety in PetSmart. While the company strives for pet health and safety, there are cases of wrong treatment in some stores, such as small animals being denied medical care and dead bodies of animals being hidden in refrigerators (Lewis, 2022). In this way, the company’s realization of its own principles and policies could be better, and it should work with it to improve its practice.

While tragic situations in PetSmart’s shops and grooming sessions are infrequent, the company’s partnership with unethical pet supply organizations is much more concerning. Despite it clearly stating that the company’s policies apply to its vendors, in reality, partnerships with such businesses are present. As mentioned, there is a petition urging the company to stop the collaboration with organizations that keep lizards, turtles, frogs, and other reptilians and amphibians in terrible conditions (PetSmart Reptile and Amphibian Petition, 2022). In addition, there is evidence that some suppliers of small mammals, such as rabbits and hamsters, are unethical, such as the mentioned Holmes (Schelling, 2016). Therefore, pet practices in PetSmart are controversial: while, in general, the situation is good and there are many facilities to help animals, there are infamous cases of violence and neglect toward them. Each similar case is enormous damage to the company’s reputation and the violation of its own ethics and principles.

Practices with Employees: Serious Issues

There were cases when PetSmart employees were treated unjustly, and while it is not a regular case, work conditions are still quite poor. As mentioned, they often do not obtain the necessary training before working with animals, which leads to their inconvenience and animals’ increased suffering (Lewis, 2022). Employees’ reviews on platforms such as Indeed are mixed, and many reported exceedingly low salaries at part-time jobs and unpleasant relationships with colleagues and managers (Working at PetSmart: Reviews, 2022). There were even reported cases of working fraud when they were obligated to pay for courses that were presented as a part of the corporate training (Shumway, 2022). As mentioned, the company has special speak-up resources that employees can use to report unethical cases; however, as one can see, work satisfaction is still relatively low (PetSmart, 2019). Thus, it has severe issues with employees’ safety and working conditions, which is a big company’s weakness.

Analysis

All mentioned policies and practices elucidate that, despite having a strong ethical code, the company does not always follow it properly. While its success was caused in the 1990s by the active acquisition of local stores and in the 2000s and 2010s by acquiring startups, the company seems to be stagnating now. Its revenues do not grown for the last several years, compared with Petco, whose earnings, while being much smaller than PetSmart’s, continuously grow (Statista, 2022c; Statista, 2022d). Therefore, the company has quite hard times today, and to understand them deeper, PetSmart’s overall success, advantages, disadvantages, and controversies are analyzed.

PetSmart Overall Success

The company may be considered successful: it is a market leader with perspectives to grow even further. It has the largest revenue among pet retailers in North America, despite, as mentioned, the company is stagnating now (Statista, 2022b; Statista, 2022d). Its brand has a strong reputation among customers, confirmed by the extensive brand awareness and loyalty of almost 50% of Americans with pets (Statista, 2022a). Mentioned problems with ethics and wrong employee treatment are likely one of the reasons for its stagnation.

Advantages and Disadvantages

The company’s strong sides are market leadership and high brand loyalty, robust policies and ethical values, large pretense on the market, and a wide offering of goods. The company’s pet policies and ideas of unconditional love for animals are the reason for the high people’s trust in the company, even despite occasional breaches. Its projects aimed at providing shelters for cats and dogs and organizing funds for helping animals are examples of good deeds and ethical decisions, improving the company’s reputation. It made smart business decisions, buying various businesses to expand and adopt new technologies, and this practice is one of the primary factors of PetSmart’s success. Goods in its shops, online stores, and acquired companies, such as Chewy, have good quality and are present in many variations; thus, each pet parent can choose something for their loved one.

The company’s current weaknesses include revenue stagnation, policy breaches, and unethical treatment. Stagnation, as mentioned, means that the company’s revenues are not rising and even falling in some years, such as in 2020. The company is not expanding for a long time and operates only in the U.S. and Canada, limiting its possibilities. Policy breaches are quite often, especially in dealing with employees: work satisfaction is low and, thus, employees’ work efficiency falls. One can see that work dissatisfaction and a lack of expansion are two principal reasons for the company’s stagnation. The unethical treatment of animals is another major disadvantage, which breaks the company’s reputation and is very dangerous. As mentioned, PETA had several investigations against PetSmart’s shops and partners, showing serious issues in the company’s ethics.

Controversies

While the company’s principles and policies emphasize pet-friendliness and consider them part of their family, there are many problems and unethical decisions. They may be divided into three categories: controversies with animals, and employees, and dishonest business decisions, such as unfair competition. PetSmart’s code prohibits unjust competition, corruption, bribery, similar illicit, unethical activity, and any violence toward animals (Brennan, 2013). There was, however, a case when Nestle sued PetSmart for unfairly using its cat litter design (Little, 2019). While Nestle won this case, there is no evidence that PetSmart uses unfair business practices regularly. However, the situation is much worse with actions related to pets and employees. As mentioned, most of the company’s employees are dissatisfied with their job due to low salaries and unsafe conditions, and cases of unethical treatment of animals are common. While the company strives to protect animals’ rights, it often violates them by itself. It is the worst disadvantage of the company, and it should certainly change its approach to animals and better comply with its own policies.

Summary and Conclusion

Executive Summary

To summarize the report, research aims, reasons, creation, and structure are to be reviewed.

The research aims at elucidating and analyzing the company’s policies, business practices, overall performance, and ethics.
PetSmart was chosen as a leading North American pet company due to its leadership position in the market and significant influence on it. Two main reasons are to see how the company reached its position and whether its decisions about animals are ethical.
The research was conducted in three steps: gathering general information, providing evidence and support for it, and analyzing it. First, general information about the company and its policies was found on the company’s websites and in its code of conduct. Then, various articles and database statistics were searched to find supportive information, enabling an understanding of PetSmart’s business practices. Eventually, all this information was analyzed to answer the research’s questions and reach its aims.
This report includes three parts: the company’s overview, description and analysis of its policies and practices, and summary.

Summary

PetSmart is a large and successful company with a robust code of conduct and corporate responsibility; however, its actual business decisions are not always ethical. PetSmart’s overall performance is high, but the company is stagnating, showing no revenue growth for the last several years. The company’s ethics is controversial: while it strives for animals’ good, helps them via PetSmart Charity, and protects them in its shops, there are many reported cases of unethical treatments and partnerships. It has severe issues with employees’ safety and work satisfaction, which limits its development. Therefore, PetSmart has a leading market position and strong ethical code but still makes unethical decisions sometimes and is vulnerable to competition due to its stagnation.