Reflection Paper: Entrepreneurship Failure
Table of Contents
Introduction and History of the Small Business Failure……..…………. 3 Reason for Business Failure ………………………………………………5 Analysis of Failure and Opinions ……………………………………….. 7 References ……………………………………………………………….. 10
Of the many failed businesses to do my research paper on, I found Pets.com’s failure to be of particular interest. Introduced and launched to the world in August of 1998, Pets.com was originally created as a way to sell pet food and supplies over the internet. The basic idea was to serve all the pet owners in the billion dollar pet industry. They wanted to offer people who owned pets the convenience to make purchases over the internet and have the items shipped without having the hassle of driving to their local pet store. Pets.com wanted people to “take advantage of their strong buying power” and thus eliminate the middleman. Potential customers may easily browse through their various categories on their website, pick out products they want and have them quickly delivered to their home. Pets.com made available to consumers an extensive product selection, large-scale inventory, competitive prices, and expert consultancy coming from a staff of pet-industry experts and veterinarians (Gray, 2009). The concept was pretty much like that of Amazon when they first started (Amazon was also an investor of Pets.com) but instead of books it was pet products. Pets.com had a dog sock puppet as their mascot/spokes-dog and their motto on their commercials was “because pets can’t drive”. Pets.com had hoped to become the “one-stop shop for pet supplies" by providing a much wider product range for their customers compared to its competitors. A few of their main rivalry within the online pet industry were Petsmart.com, PetPlanet.com, Petopia.com, and Petstore.com. However, Pets.com did have a first-mover advantage as one of the very first of these virtual pet stores to penetrate the marketplace. They later went on to acquire Petstore.com (Crosby, 2000). Their whole approach to business was quite interesting and new at the time due to advances in technology. Pets.com was based in San Francisco but only as an e-tailer (an online retailer) meaning it only existed online as a virtual company. In spite of the increasing competitiveness in the online pet market, Pets.com did looked like it was on a path to success initially. At its peak, the once ever popular talking sock puppet/mascot even made an appearance in a multimillion-dollar Super Bowl commercial and also as a balloon in the Macy's Thanksgiving Day Parade. In the end no matter how cleverly marketed Pets.com was; it simply wasn’t able to give pet owners a compelling reason to buy supplies online. Unfortunately, the branding success it saw in the beginning was simply not enough to sustain itself and Pets.com proceeded to shut its virtual doors in November of 2000, just a couple of years after it had launched.
Reason for Business Failure
There are many different reasons for why a business fails. The most common reason according to the United States’ Small Business Administration (SBA) is attributed to the fact that many small business owners don't have the basic experience and knowledge for dealing with the challenges of their company in the early stages of their business. This was the case for Pets.com. The startling fact is somewhere around 90% of all small business owners fail terribly within their first two years of operating and being in business. No one wants to focus on failure when they first set out to start a small business. However, if a business owner is not able to address the common causes for business failure ahead of time, then they're more than likely to fall victim and just become a statistic themselves. The following are the three most common challenges encountered for small business owners and also the same...
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