DISCUSSION OF CHAPTER 4 INCIDENTS. Incident 1: Competitive Strategy at Buddy Dog Foods. Buddy Dog Foods makes and sells dog food for puppies and adults. It has been a leader in the industry for more than 25 years. Until recently, the company has successfully pursued a low-cost strategy by selling a limited number of food recipes and holding down manufacturing costs. However, Buddy Dog has lately been struggling to maintain profitability because many new competitors offer low-cost food choices. Thus, the leadership team has decided it is time to change its strategic focus.  Buddy Dog’s extensive market research shows that niche dog food markets have emerged where pet owners are willing to pay more for hypoallergenic food made only with all-natural ingredients. There are only a few competitors in this market space, and most do not have Buddy Dog’s excellent reputation. The company’s leadership believes they can manufacture hypoallergenic dog food to dominate niche markets. By distinguishing itself from the competition, Buddy Dog’s leadership believes they can create a sustainable competitive advantage.  Having considered market factors and its manufacturing capacity, Buddy Dog will shift from a current low-cost strategy to a differentiation strategy by manufacturing hypoallergenic dog food. Buddy Dog must now make many tactical decisions in various functional areas of the company to support its new strategic approach. Its priority is to restructure the product development function. They will hire and retain talented veterinary nutritionists and food allergists. The company will also hire operations specialists. Finally, the leadership recognizes that job redesign will be needed and they must consider how to bring current employees up to speed. Clearly, Buddy Dog has a lot of work to do to ensure a successful implementation of its new strategic approach.  QUESTIONS 4-27. Strategic planning at all levels of the organization can be divided into four steps. Which step in the strategic planning process led Buddy Dog Food’s management to change its focus? 4-28. Following Buddy Dog’s shift in competitive strategy, what must the company’s HR professionals consider? 4-29. What kinds of challenges could Buddy Dog face in the areas of recruitment, training, and compensation?