MedicAnimal represents a classical “product business model” in the pet supplies retail sector. The online retailer, located in London, sells pet products such as pet food, accessories and prescription medicines. The company, which is registered both as a veterinary dispensary and as a pharmacy in the UK, has the added benefit of offering its clients free advice through its team of pharmacists and veterinarians. The advice service is a work-for-hire business model that the company operates alongside its product business model, and this write-up will focus on the product business model.
MedicAnimal was founded in October 2007 by Ivan Rezignac, an ex-Goldman Sachs broker and Andrew Bucher, a veterinarian. A private equity firm Iris Capital invested £5 million in the company in 2010. This was followed by an investment of £10 million made by Balderton Capital in 2012. The investments were used to fund the acquisition of two rivals, Petmeds and Pet Supermarket between 2010 and 2012, thereby making MedicAnimal.com a near monopoly. The investments were also used to improve its website in two ways: (i) translating the website into eight languages for customers from other countries and (ii) offering customers veterinary and pharmacist advice via the phone, email or the online chat function.
CUSTOMERS – WHO THEY ARE:
MedicAnimal.com has a single type of customer. These are private Pet owners / individuals who have access to the internet. Customers like convenience and prefer to shop online for pet food.
ENGAGEMENT – VALUE CREATION PROPOSITION:
The value proposition of the product business model is to provide customers with a website to buy pet products and have them delivered to their homes. These products can be pet accessories, healthcare items, pet food and prescription and non-prescription medicines for pets. This dyadic product is a bus model since it provides the same range of products for all pet owners. MedicAnimal.com is able to provide cheaper prices than a veterinary practice since the company buys products directly from wholesalers and benefits from volume discounts. Also the firm does not mark-up prices as vets do across the medicine range ensuring that customers pay the lowest possible price for any medicine whilst maintaining a healthy margin.
However the website also provides a work-for-hire service for customers who require advice from veterinarians and pharmacists. This advice is free for customers and MedicAnimal.com’s team can be reached through phone, online chat or email. Although MedicAnimal.com effectively has a portfolio of business models, the product business model is the main business model with the work-for-hire model operating as a free service that is complementary. Therefore the overall business model will be assumed to be a dyadic product Business Model.
DELIVERY – THE VALUE CHAIN:
MedicAnimal.com buys items in bulk from wholesalers who give it a bulk-buy discount. Since they benefit from big discounts, they avoid the huge mark-up prices that vets normally demand and can supply to customers at a lower price than vets, but also can maintain a good margin. These products are placed on the website and customers who prefer convenience could buy it online for a better price and less hassle. The products are delivered through postal service or external courier service providers depending on the size and weight of the packages. The cost of delivery is additional to the cost of the products, as it is in other online-stores, although orders over £10 are delivered for Free and orders less than £10 incur a shipping charge, which depends on the weight of the package and the speed of delivery. In addition to this, the team of in-house veterinarians and pharmacist provide free advice to customers via live chat, email or phone. To add more value to its customers, it also publishes news and advice related to general animal care and health issues, both which are free for customers.
MONETIZATION – VALUE CAPTURE:
MedicAnimal.com captures value by charging customers on a product basis as other online retailers do including a charge for delivery.
Balderton.com, (2015). Venture Capital | Early Stage Funding | Our Portfolio - MedicAnimal. [online] Available at: http://www.balderton.com/portfolio/medicanimal [Accessed 13 May 2015].
Londonlovesbusiness.com, (2013). Bow-wow! The £80m London pet business you’ve never heard of | Features | LondonlovesBusiness.com. [online] Available at: http://www.londonlovesbusiness.com/entrepreneurs/f... [Accessed 13 May 2015].
YHP, (2013). We “burnt our ships” – we invested all our own money, quit all other jobs/opportunities and focused full-time on MedicAnimal - Ivan Retzignac - YHP. [online] Available at: http://yhponline.com/2013/08/01/ivan-retzignac-med... [Accessed 13 May 2015].
Medicanimal.com. 'Delivery | Medicanimal.Com'. 2015. Web. 2 July 2015
Written by Allen George and edited by James Knuckles under the direction of Prof Charles Baden-Fuller, Cass Business School. This case is designed to illustrate a business model category. It leverages public sources and is written to further management understanding, and it is not meant to suggest individuals made either correct or incorrect decisions. © 2016
Published 21 April 2016