True to its name, Kudler Fine Foods (KFF) is a California company that specializes in gourmet foods including a European-Style Bakery, a certified organic meat department, a produce section with fresh fruit and herbs, gourmet cheeses, and an extensive wine collection. Kathy Kudler created the company 1998 and since then has expanded her company to include three stores including locations in La Jolla, Del Mar, and Encinitas.Kudler still shoulders the majority of the responsibility for Kudler Fine Foods including replacing inventory, managing payroll, catering, and firing/hiring of staff. Kathy’s immediate goal is to close the Del Mar location that has not been profitable, and open a new location in Carlsbad which is close enough to Del Mar to service current customers but closer to Oceanside which has more than 160,000 residents with higher average incomes. Kathy’s long-term goals with the company are to expand store locations while striving to offer more fine food options.She is looking to enlarge the coffee and tea section of the store, and construct a fish counter and deli in the meat department of each store.
One of her primary goals is to create a niche within the market. Trader Joe’s has a similar setup as KFF but with 167 locations in California alone, Trader Joe’s is much larger in scale, contracting with companies throughout the world to stock their shelves with unique items for adventurous shoppers (Kowitt, 2010). Although competing directly with Trader Joes is probably unrealistic, Kathy wants to expand KFF before selling the company and retiring with the profits.The Problems Although KFF has done fairly well within the gourmet food market, there are some problems that need to be addressed before further expansion occurs. The primary problem is that Kathy Kudler is overly involved in the day-to-day operation of the company, managing the financials, making decisions about inventory, and even running catering events. She is running the business like an entrepreneur instead of managing it like a burgeoning business. If she ever became ill, the company would not be sustainable.
Another problem is her staff is paid generously for overly narrow responsibilities and the positions are difficult to fill when employees quit. For example, she currently has butchers, bakers and wine stewards at every store even during non-peak hours. Another blaring problem for KFF is the underperforming Del Mar location. The town only has 4389 people and so far residents of neighboring cities have not made the trip. Kathy wants to continue expansion but closing down this location is the priority. In looking at expansion, Kathy will target wealthy areas with higher populations.She would like to buy a location near bristling San Francisco, an affluent city with a high Asian population (much of the store appeals to the Asian community).
Finally, competition is a concern although the Strategic Plan for Kudler Fine Foods downplays direct competition. As Wiebe said, a common refrain from small businesses is “when I stopped competing, my business really picked up,” (Wiebe, 2007). He also mentioned that small businesses are wise to enter niches or develop new niches to avoid direct competition with major businesses (such as Trader Joe’s in the case of KFF).In general, small businesses service discriminating consumers with high-end products instead of inexpensive ones. As the Strategic Plan mentions, “KFF appeals to the person who sees themselves as a discriminating gourmet. ” Even so international markets vie for the same Asian clientele, and Jonathan’s Market is a specialty store in La Jolla that offers similar products to KFF. Trader Joe’s and Whole Foods also offer outside competition but their selection is more limited and tends to be more healthy and organic.
One of Kathy’s primary duties is to determine popular mainstay items, finding the foods that accentuate her “niche,” and avoiding direct competition with companies that may offer a product/service less expensively or more definitively. Because KFF deals with perishables, if Kathy does not fulfill these responsibilities the company’s bottom line goes down as the dumpster’s fill with fermented food. Problem Statement In order for Kudler Fine Foods to expand, Kathy Kudler needs to stop running the business like an entrepreneur and begin managing the company like a multifaceted business.The easiest way for Kathy Kudler to do this is to hire an outside executive with extensive experience to take over many of her day-to-day responsibilities (specifically hiring/firing, marketing, expansion strategies, etc). This would free up Kudler to return to her creative roots and resolve other pressing problems facing the company. End State and Goals. Kathy’s stated goals are to expand Kudler Fine Foods across California and possibly other states, add more product lines/specialty services, and offer more catering services.
Additionally, Kathy would eventually like to sell the company and retire from the proceeds.In order to accomplish these objectives, Kathy will need to continually consider and shape her company’s niche and spread the brand across California through a well considered marketing campaign. Most importantly, Kathy will need to hire help instead of hoarding responsibilities like a squirrel with acorns.References Kowitt, B. (2010). INSIDE TRADER JOE’S. (cover story).
Fortune, 162(4), 86. Retrieved from MasterFILE Premier database. Wiebe, M. (2007). Small Companies Find Ways to Prosper Among Giants. Bicycle Retailer ;amp; Industry News, 16(3), 33. Retrieved from Business Source Complete database.
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