STR 581 Week 4 Learning Team Assignment - Strategy Paper
STR 581 Week 4 Learning Team Assignment - Strategy Paper
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Date Created: 11/06/15
Running head ALTERNATIVE STRATEGIES FOR KUDLER FINE FOODS Alternative Strategies for Kudler Fine Foods STR5 8 1 NAMES DATE NAME OF PROFESSOR ALTERNATIVE STRATEGIES FOR KUDLER FINE FOODS 2 Alternative Strategies for Kudler Fine Foods Kudler Fine Foods is a gourmet food shop owned by Kathy Kudler whose sole purpose for opening such a store was driven by her passion for gourmet cooking Kudler Fine Foods has experienced huge success since its birth in 1998 because of the consumer s need for organic products Kathy currently has three locations La J olla Del Mar and Encinitas and specializes in sales of the following organic products meat seafood produce cheese dairy and wine Kudler is the only gourmet food shop in its vicinity and is committed to providing customers with the finest selection of gourmet food while maintaining a competitive edge As a result the executive team has expressed desire to expand more rapidly throughout the industry Team Alpha will summarize five strategic alternative plans 1 concentrated growth 2 product development 3 horizontal integration 4 growth industry strategy and 5 differentiation Team Alpha will conclude with selecting the best alternative that will aid in Kudler Fine Foods future growth Concentrated Growth To streamline product management Kudler will implement a department that will process and track customer product transactions through Internet and store locations Concentrated growth allows for aggressive marketing where an organization strong position and favorable market allows it to control resources and efforts for future growth First Kudler will establish a purchasing department that will organize transactions to ensure quality organic foods wines and spices for the lowest price Second Kudler will establish longterm relationships with suppliers that will ensure availability of the quality and quantity of orders Pearce amp Robinson 2009 Third Kudler will partner with FedEx for delivery of all Internet sales In addition the purchasing department will arrange delivery of products from the supplier to individual stores ALTERNATIVE STRATEGIES FOR KUDLER FINE FOODS 3 Last the department will utilize an automated ordering system that facilitates in collecting valuable information on Internet and store sales and Kudler catering service For instance it will determine profitability for each store location and Internet transactions Product Development In an effort to increase cash ow with limited financial exposure Kudler has the opportunity to apply product development as a strategy Product development is the substantial modification of existing products or the creation of new unrelated products that can be marketed to current customers through established channels Pearce amp Robinson 2009 Kudler can undertake product development based on the research obtained in the environmental scan and from data extrapolated from the customer loyalty program It will know which new types of cuisine customers are trending towards and make these products readily available in the stores Cooking utensils and lessons can be marketed to the same clientbase using this strategic initiative The firm could also introduce tableware such as linens napkin rings and candles Additionally customized holiday baskets could be sold to existing clientele supporting the product development strategy Horizontal Integration Horizontal integration is a strategy that Kudler would use to enter its products into other markets To achieve this strategic plan Kudler would acquire Cardiff Seaside market and implement catering services through restaurant operations Profit margin from Kudler catering service is 25 higher than stores profit margin This is due primarily to the lowoperating cost The acquisition of Cardiff will enhance Kudler s ability to enter another market through lowcost supply raw materials would come from its local stores or current supply chain Setup and operating cost for Kudler catering services would be minimal using resources from Cardiff Currently 12 of Kudler perishable goods are either thrown away or donated to local charities University of Phoenix 2010 By acquiring Cardiff perishable goods can be delivered to the ALTERNATIVE STRATEGIES FOR KUDLER FINE FOODS 4 restaurant daily to supplement food preparation for both restaurant and catering operations The restaurant and catering service would also market new store products with minimum marketing cost Acquiring Cardiff will generate superior profit gain for Kudler Kampe 20042005 Growth Industry Strategy A growth industry strategy is a type of business strategy that is advantageous for firms participating in rapidly growing industries Schulz amp Hofer 1999 At this stage a growth strategy that focuses on expansion and emphasizes product recognition can be key strengths for the Kudler organization Although Kudler has experienced tremendous growth since its birth further expansion to Carlsbad will give Kudler the competitive edge the executive team is striving to achieve Kudler dominates the market at its current locations experiencing little competition Therefore now would be the appropriate time to expand into a new market It would offer both organic products and the catering service from this expansion Kudler s major weakness is its limited presence Therefore Kudler should leverage its brand reputation for offering premium quality food through its new catering service Besides bringing premium quality products to the area Kudler will bring it to the consumers doorstep Kudler has achieved much success but to reach its true growth potential it must be ready and willing to make some definite location and servicing changes to meet the needs of the consumers Differentiation It would be profitable for Kudler to implement a skillbased strategy in order for the company to realize its growth and differentiate Implementing this strategic plan would allow Kudler to place emphasis on the company s overall resources and build competitive advantage over its competitors In this capacity Kudler would profile the skills of its manpower and the potential opportunities the company could capitalize on while factoring in its current customers and competition Schulz amp Hofer 1999 ALTERNATIVE STRATEGIES FOR KUDLER FINE FOODS 5 It would also be beneficial for Kudler to explore its dynamic capabilities followed by static assets thus creating a unique level of service to its customers By Kudler gaining an understanding of its skills and resources the company will have the capacity to recognize opportunities considered valuable for organizational growth Additionally once the requirements and desires of the customers are categorized Kudler would be equipped to develop a competitive advantage by focusing on its customer base Having this kind of competitive advantage would provide the company with the differentiation the company wishes to possess within its industry Best Recommendation for Kudler to Realize Growth Kudler Fine Foods is an organization poised for growth it is necessary for the company to evaluate several strategies that will accommodate growth This paper evaluated five strategic plans 1 concentrated growth 2 product development 3 horizontal diversification 4 growth industry strategy and 5 differentiation With the assistance of the grand strategy matrix Team Alpha selected concentrated growth as the strategic plan most relevant and beneficial to Kudler Establishing a Product Management Department and focusing on market needs knowledge of buyer behavior and customer price sensitivity Kudler will be able develop the infrastructure to build on its core competencies and achieve growth Pearce amp Robinson 2009 It will accomplish this by focusing on selling quality organic products with the implementation of catering services In doing so Kudler will achieve growth from increased productivity better coverage of its productmarket segment and more efficient use of its technology Pearce amp Robinson 2009 ALTERNATIVE STRATEGIES FOR KUDLER FINE FOODS 6 References Kampe E 20042005 Horizontal Integration Small Business Pro tMaker Bootcamp Integrative Performance Retrieved from httpwwwintegrativeperformancecommarketingglossaryhorizontalintegrationhtm Pearce J A amp Robinson R B 2009 Strategic management Formulation implementation and control 11th ed New York McGrawHillIrvin Schulz W C amp Hofer C W 1999 Creating Value through SkillBased Strategy and Entrepreneurial Leadership Technology Innovation Entrepreneurship and Competitive Strategy 1 ed London Pergamon University of Phoenix 2010 Kudler Fine Foods Computer Software Retrieved from University of Phoenix Simulation STR5 81 Strategic Planning amp Implementation website
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