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Kudler’s Strategic Plan Essay

The mission statement should be a clear and succinct representation of the enterprise’s purpose for existence (BRS Center for Business Planning, 2010). Kudler Fine Foods mission statement is to supply the finest assortment of their wines and foods with a knowledgeable support staff. Vision

Kudler Fine Foods vision highlights their image for the future and their motivation. The gourmet grocery store’s vision is to sustain superior and quality foods, at competitive prices, with friendly service. Values Statements

The values statement provides boundaries on how such success will be achieved and establishes a covenant you ask all stakeholders to accept by answering the question: “How will we behave as we pursue success?” (Magus Consulting, 2010). The value statement of Kudler Fine Foods focuses on employee’s dedication, high standards, and cleanliness. Their employees and customers are priority and Kudler provides the means to inspire employees, which in maintain long-term relationships with customers. Environmental scan

Kudler Fine Foods performed an SWOT analysis scan to determine the company’s new strategies. To conduct the analysis, the company conducts SWOT analysis to establish its current conditions. Strengths

Kudler Fine Foods is small, customer-oriented organization in which the owner, Kathy Kudler, interacts with staff members weekly. The company offerings include a wide variety of quality fruits, vegetables, wines, and cheeses. In addition, the stores are in excellent economic regions where customers can afford the prices. Furthermore, the firm has repeat customers, which demonstrates that the company has an impeccable reputation and high customer satisfaction (Apollo Group, Inc., 2007).

Weaknesses

Kudler Fine Foods sells mostly perishable foods, and about 12% of the stock is removed from the shelves to ensure freshness, which also results in waste and lost profits. In addition, the stores have high payrolls associated with specialty positions and small management that makes managing, ordering, and maintaining inventory difficult for the owner. Kathy is managing all the stores, ordering supplies, and maintaining inventory. A management model in which Kathy performs all major activities limits growth and represents a risk because if she became ill, she would not have a replacement, which would have a negative impact on store operations (Apollo Group, Inc., 2007).

Kudler’s Fine Foods External Analysis

Opportunities

Kudler Fine Foods has the opportunity to fulfill other market needs by including additional gourmet products to their offer such as coffee and tea, a fish counter, a deli counter, among others. This horizontal expansion of the business will attract new customers and increase the share of wallet from current customers.

Other expansion opportunities for Kudler Fine Foods include the consolidation and growth of the catering business and the entrance to the e-market by offering delivery of gourmet products and ordering of catering services. The Internet is usually a lower cost channel given that fewer employees are needed to maintain it and to drive an increase of the customer base.

Finally, the most obvious growth opportunity for the company relies in geographic expansion. Opening more stores in the California area and in other states is a possibility for Kudler Fine Foods if they can increase their management capabilities. (Apollo Group, Inc., 2007).

Threats

Kudler Fine Foods, like other businesses, faces threats relative to the economic conditions of the region in which it operates. The market for gourmet products is very sensitive to economic downturn because consumption of such items usually responds to desire rather than necessity. Current unstable weather conditions and natural disasters (like earthquakes) due to global warming also pose a threat of increased costs of produce if it affects local producers that supply Kudler Fine Foods.

Other threats come from direct and indirect competition. If competitors choose to expand geographically or to extend their product lines to include the products Kudler Fine Foods today provides, this expansion could have a negative impact on the company’s bottom line. Another threat could be that traditional supermarkets are expanding their offers to include organic products and some gourmet items. Traditional supermarkets usually have higher bargaining power, which allows them to offer lower prices, and they have the advantage of covering a wide rage of needs in a same location. (Apollo Group, Inc., 2007).

Review of the individual strategies from Week Four and a recommendation for the best strategy for Kudler see strategies below (in pink) and choose best strategy

Strategic Plan Kudler’s strategic plan involves increasing efficiency of their management and employees. Firms that implement the strategy of operational excellence typically restructure their delivery processes to focus on efficiency and reliability, and use state-of-the art information systems that emphasize integration and low-cost transactions (Pearce & Robinson, 2009). Kudler Fine Foods requires exceptional customer service because the store is a customer-oriented. Companies excelling in customer intimacy combine detailed customer knowledge with operational flexibility. They respond quickly to almost any need, from customizing a product to fulfilling special requests to create customer loyalty (Pearce & Robinson, 2009). Therefore, their strategic plan will include ways to retain their customers, as customers are the most important to their bottom-line. Concentrated Growth Strategy

Kudler Fine Foods should consider the concentrated growth strategy. According to Pearce and Robinson (2009), the concentrated growth strategy is the least risky grand strategy. Successful implementation of a concentrated growth strategy would increase KFF’s market penetration. Smaller companies such as Kudler Fine Foods with limited resources can increase market position with a concentrated growth strategy. In addition, this strategy can help KFF to increase the number of repeat customers and their usage rates (Pearce & Robinson, 2009). However, this strategy does entail some risks. These risks include changes in the economy, possible slow market growth, vulnerability to high opportunity cost related to alternative strategic approaches, and the probability of financial losses by KFF related to poor forecasts (Pearce & Robinson, 2009). Product development focused on new products Kudler could develop

Product development is the process of creating a new product to be sold by a business or enterprise to its customers. A product can be any item from a book, musical composition, or information service. The task of developing outstanding new products is difficult, time-consuming, and costly. However, quality products are not simply designed, but instead they evolve over time through hours of research, analysis, design studies, engineering and prototyping efforts, and finally, testing, modifying, and re-testing until the design has been perfected (Riley, 2009). Kudler Fine Foods is already a supplier of gourmet food and adding coffee products to the company’s selection would put them another step ahead of the competition.

“Demand for both coffee and coffee “drinks” is so high that recent surveys estimate that coffeehouses alone sold $8.3 billion in coffees and coffee drinks and that amount is expected to reach almost $19 billion by 2011, according the Specialty Coffee Association of America. It reports that the United States coffee industry has grown almost 50% from $7.76 billion in 2000 to more than $11 billion in 2005 and the figures keep climbing” (Rosen, n.d., p.1). The type of coffee products that Kudler Fine Foods could market is gourmet coffee, flavored coffee, and decaf coffee. Differentiation and customer responsiveness

Another alternative strategy that Kudler Fine Foods may consider to realize growth would be “differentiation.” Differentiation is “designed to appeal to customers with a special sensitivity for a particular product attribute” (Pearce & Robinson, 2009, p. 204). ” Differentiation assists in building loyalty with customers as well as it enables an organization to charge a “premium” for its products and services (Pearce & Robinson, 2009). Differentiation helps separate a brand from others and build a reputation for “excellence” (Pearce & Robinson, 2009). Kudler may use differentiation to separate itself from competitors and help build its reputation, which would result in increased customer loyalty and would appeal to those customers seeking for specific attributes.

Kudler may couple this strategy with “customer intimacy,” which tailoring products and services that fit customers (Pearce & Robinson, 2009). “Customer intimacy” assumes certain degree of knowledge about customers and the flexibility to make necessary adjustments. This long-term approach is designed to satisfy customers. Because Kudler is a relatively small operation with centralized management, it has the flexibility and the resources to grow to know its customers and build the kind of relationships that will result in lifetime customers. Market development by adding a sales channel

Kudler Fine Foods has been successful in marketing its products through several stores where customers can choose and buy gourmet products. As revealed in the company’s SWOT analysis, the superior selection of a variety of products has been a critical strength to support such growth. According to Pearce and Robinson (2009), “market development allows firms to leverage some of their traditional strengths.” In this proposed strategic alternative Kudler Fine Foods can use its excellent selection of products to appeal to an even larger base of customers by selling its products through the Internet. Online sales have presented two digit growth rates in the past four years (Greene, 2009). Internet can be considered a cheaper channel to drive growth given that it requires less capital investment than opening a new location and it reaches a larger base of customers. Advertising in other media

Other strategic option includes advertising with newspapers, a local radio station or television advertisement. Placing a weekly ad in a local newspaper, KFF will become a known brand for fine gourmet in the Del Mar area. Because the advertisement will be in a local paper, it pinpoints the target market and reduces costs. Kathy should advertise on the radio during peak hours her free cheese samples and wine meetings. If the cheese, dairy, and wine areas are in the front of the store, Kathy should consider placing it near the back. The goal is to compel consumers to walk around the KFF store to see their products before arriving at the cheese and wine area.

Another way to market Kudler is through television. Because Kudler is selling locally, expensive commercials will work against them. By using a local advertiser, the intended message will be seen by consumers in that particular demographic area. Costs will be minimal because advertising in local newspapers, radio, and television will be done locally. Implementation Plan: Create a WBS and Gantt chart for the new strategy. Include objectives, functional tactics, action items, milestones, tasks, resource allocation, and a deadline. In addition, analyze the key success factors for plan implementation. Include cash budget for the implementation plan and forecasted financials for Kudler. I did this last week, but I was not sure if I did this correctly. See excel spreadsheet Work Breakdown Structure (WBS)

Incorporating a work breakdown structure will assist KFF in their efforts to assign responsibilities and manage time. Currently Kathy is responsible for each department and which takes away her time from other managerial duties. The WBS has four sections, planning and supervision, inventory management, staff management, and marketing. Planning and supervision refers to how Kathy will operate Kudler Fine Foods. Kathy will make plans, verify the budgets, and meet with shift-supervisors for each department.

Inventory management is crucial for a gourmet grocery store. Forecasting sales will help reduce chances of ordering too much food. A customer count can be incorporated by issuing savings cards so customers can attach to his or her key ring. This device not only tracks what customers are purchasing but also their geographic location. Food count will let shift-supervisors know how much food should be ordered every two days. Food management must be accurate because KFF offers the freshest foods and ordering too much food will cost the company.

Kathy has to manage her staff so that she is not over or understaffed. Because there are six sections to KFF, there should be at least three employees in each department. Employees should strategically be placed in their area of strength. For example, an employee with excellent math skills, they should be placed on the register. In addition, the employees should be cross-trained in the event of someone taking leave. Shift-supervisors are also responsible for coordinating employee’s schedules.

Marketing for a gourmet store is chief to earning sales. Kathy has to study the local businesses, schools, stores, and understand who the competitors are. This understanding will assist in becoming more profitable and peaking customer’s interests. Once Kathy is aware of the other factors, it is easier to strategize. In addition, considering holidays and vacations will alert Kathy of when to expect crowds and order more inventory. To continue to attract customers, Kathy should continue to offer free samples on Saturdays. Once a potential customer is interested, he or she has a higher chance of coming into the store and spending. A guest check average will assist with ordering inventory because the average calculates the number of customers divided by the money spent in the store.


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