Shazeeye's Blog Thoughts on User Experience, Technology and Business

31Oct/110

Using the Four Actions Framework to Craft a Firm’s Strategy

A firm has to have a clear vision in the form of a strategy to define who it is and where it wants to go. Sometimes somewhere along the way this strategy gets blurred and its customers can't differentiate it from its competitors. The four actions framework asks four questions to sharpen the focus and realign the firm's game plan. The four actions framework can also be used to reconstruct customer value in an industry to identify a gap or find new value. The four questions as seen in the image identify factors that reduce, eliminate, raise and create value.

Let's apply this to a case study- PetSmart vs. Petco. You can read the detailed analysis in my paper here - Petsmart vs Petco - 4 Actions Framework or get the highlights below.

Industry analysis

PetSmart and Petco compete in the Pet Care Industry which includes pet food, clothing, healthcare and other pet services. This is an attractive industry based on Porter's 5 forces analysis (read paper for details) with spending reaching $41 billion/year (number which doubled from a year ago). Americans spend more on pet care than what they spend on movies, video games and music put together.

PetSmart’s strategy was to connect emotionally with pet owners by providing services (services strategy) such as adoption, grooming, training, day care and pet hotels. These luxurious pet services made pet owners feel that their pets were being treated as well as family and thus commanded the higher market share (30%) of the pet care industry. Petco their rival which held 20% market share concentrated on selling a larger variety of pets at a premium price (11% more than PetSmart). As PetSmart was a services strategy it partnered with alliances such as Banfield to help in hospital needs and its stores were located in “power centers” unlike Petco whose stores were “neighborhood pet stores” and much smaller in size.

Recommendations to PetSmart to Refine their Strategy using the Four Actions Framework

Raise: Continue to focus on services and add to these based on trends. For example pet obesity is a big trend hence providing pet diet plans and support will grow the pet food (diet meals for pets) vertical as well as services vertical (customer support), which is recurring revenue and ties into their current strategy. A limitation of this suggestion is that existing diet plans companies can easily enter this market with some modifications to their food to cater to animals.

Create: Provide pet super stores: hotel, grooming and hospital all in one. Owners will be willing to come to pet super stores. Based on maximum revenue based on location super stores that are a one stop shop for all pet owners can attract and even take away from mom and pop stores. Visiting vets from Banfield (PetSmart's already existing pet hospital) can be a part of this super store. This will also increase revenue for other verticals. For example, after the dog is treated at the vet the owner may pamper him or her at the spa and then buy the month’s food supply at the pet supply store. A limitation of this suggestion is that a lot of capital is required to create this and Francis is already working on expanding his pet hotels so this suggestion can probably wait once that is implemented and a detailed cost-benefit analysis of this suggestion is carried out.

Raise: Owners like to be a part of the pet grooming ritual as it fills an emotional need for the owners. Provide see -through rooms where owners can watch pets being groomed or trained while they wait (instead of waiting in waiting rooms). Remember, this is a business that caters to human needs through the pet. Feelings of belonging, care and connections are expressed through pets and sharing in these activities only strengthens the connection. A limitation of this suggestion is that this may be a small market (or not). In today’s busy world few may want to watch their pets being groomed. Again market research and testing will clarify this point.

Eliminate: As only 2% of their revenue comes from selling other pets such as birds and fish, etc evaluate if you still want to keep that business or use the revenue from there to better focus on the lucrative services, supplies and food verticals at PetSmart. A limitation of this suggestion is that this will change or limit the scope to only dogs and cats.

12Nov/104

Web Analytics to Track your Blog

This post is dedicated to my loyal readers! Thank you for patiently waiting for each post (yes I know it's just 2 posts/month). So the question is how do I know I have loyal blog readers? I know because I am tracking my blog with software and I'm here to tell you about it. As of now all the tools listed below are free and the scope of this post of this post is limited to free blog tracking tools. Let's get started!

1. Google Analytics - my favorite free blog tracking tool as it has a wealth of information. With this tool you can answer the following questions.

Content metrics: Which posts interest my readers? Which posts do they spend more time on? Which posts do not interest users? For example, the image on the right shows content metrics for the first month of starting my blog. Readers were most interested in my portfolio (most page views) followed by my bio (about me) and the post on 'trust and e-commerce homepages'. A further look shows  that the post on  'listen to your customers' was not as highly viewed (22 vs. 81 views) as the post on 'trust and e-commerce homepages' but readers spent more time on 'listen to your customers' (4.17 minutes vs. 1.39 minutes) and it had a lower bounce rate (bounce rate= when someone immediate leaves the page/blog after they have come to the post) which is also a critical metric of interest. Bounce rates below 30% for any post or blog are preferred as it means your audience is engaged in your content and is not leaving the blog. Bounce rates can also be high if the audience is not your target audience though your content is good. Page Analytics shows  readers clicked (in pink on image above) on my blog's home page more than my portfolio and bio page. This will help you understand which links get more attention from your readers.

Traffic sources: It's equally important to monitor your traffic sources to attract traffic as it is to write great content. A summary of my traffic sources for 3 months (since my blog's birth) shows organic traffic (readers who type my name in a search engine to come to my blog)  and direct traffic (readers who open a browser and type my blog address) to be highest which is natural. I also get traffic from social media (Facebook, Twitter, LinkedIn, Stumble Upon and Hootsuite) and Blog directories (Blog Search and Blogged). The more effort I put into finding channels to send traffic to my blog the better my outreach but I should also be aware of targeting the right audience through these channels. For example, the bounce rates and average time on my blog indicate LinkedIn, Facebook and Organic sources to be good traffic sources but Twitter and direct traffic to not be good traffic sources. This could mean I'm not attracting the right audience on my Twitter and my readers want more frequent updates on my blog as they have nothing new to read other than the 2 posts/month. It's also important to monitor  the keywords that readers put into search engines to come to your blog. For example, the image above shows the keywords and the corresponding times spent on my blog. Google Adwords (not shown) identifies which keywords people most search for in my field.  Once, I identify these keywords I can tailor my content accordingly and thus get more traffic.

Visitors: My blog has about 50% new and 50% returning visitors. I am extremely interested in 2 metrics: visitor loyalty and visitor depth. The images below indicate that I have a loyal following and 70% of my readers visit my blog 8 or more times. 55% of my readers read 2 or more pages on my blog. Thank you my loyal and interested visitors!

2. Bit.ly- This tool measures the number of readers who clicked on a link that you shared. You could share this link on Facebook, Twitter or your Blog. The link could be an image, a link to a blog post or a video. For example, of all my links that I have shared on Twitter, Facebook, Shazeeye's Blog or LinkedIn the link that got the most interest (maximum clicks) was the one on "25 Most Influential Business Women in San Francisco" that I shared on Twitter (@shazeeye).

3. PercentMobile- a critical tool to monitor your mobile traffic. I have not done well in this area and I'm changing that immediately. For example, I had 39 visitors who came to my blog last month using 6 different mobile devices and unfortunatley as my blog was not easy to read on the mobile device 97% left immediately. I lost important traffic. Though I use a free wordpress plugin - WPtouch- to make it easy to read on a mobile device it has not worked well for me so I've finally decided to buy my first tool -WPtouch Pro.

4. Google Feedburner- measures the number of subscribers to your blog.

5. UserVoice- moderates and tracks user comments at a post and page level on your blog. These will be the orange tabs you see near my portfolio and bio page. Now that it's established that this blog has a few fans do you want to show me some love and post a comment using the comment form below. Thanks!

Where can I find these tools?

Google Analytics, Bit.ly, PercentMobile, Google Feedburner, Google Adwords and User Voice

Instructions to add these tools?

Google Analytics, Bit.ly, PercentMobile (sign up and it guides you through the process), Google Feedburner, Google Adwords and User Voice

If you know of any tools that I forgot to write about please let me know.

Page 1 of 11

Switch to our mobile site