Question

Scenario

Between recalls on mass-produced commercial dog food and a general understanding of the benefits of a healthier diet for pets, the demand for natural or organic dog food is experiencing a significant increase. Wanda’s treats are more expensive than the “mass-produced” treats found in most grocery and big-box stores but she prides herself on providing high-quality products and believes that her customers are willing to pay the extra money for quality.

Forces behind Supply and Demand

How does Wanda’s strategy of being a high-quality provider take advantage of the shifts in consumer demand for healthy dog treats?

Analyze the Impact of Shifts in Demand on Business Operations

Identify and describe an event that might occur in the economy that would cause Wanda’s strategy to no longer be successful for Salty Pawz. If this event occurred, what actions would Wanda have to take in response and what impact might they have on her business?

Answer 1

Wanda's strategy of being a high quality producer has led to increased demand by consumers due to awareness among consumers that her products are better and more beneficial.

This leads to increase in demand, shifting demand curve for Wanda's products to right leading to increase in its price.

The one situation can be when her Wanda's products show no health benefits in the long run, leading to a fall in demand for its products.

In this case Wanda should respond by actually increasing its products quality and show laboratory results for the same to assure consumers of the high quality.