Kudler’s Strategic Planning 1

Kudler’s Strategic Planning

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Introduction

Kudler Fine Foods is one of the gourmet food shops which built in 1998 and the owner is Kathy Kudler. The company products include beverages and gourmet food at its three locations in CA. Kudler is trying to expand its services as well as to improve its day to day operations by efficiency (Kudler, 2007). They are trying increasing their consumer purchase cycle by increasing loyalty and satisfaction among its consumers. For expanding purposes, Kudler needs to get large amount of capital by going public. Therefore they can issue shares and preferred stocks. This paper will specify Executive summary, company background, environmental scan, and recommendations for best strategies.

Executive Summary

Kudler Fine Food is a western United States based company, which is situated in San Diego metropolitan area. It furnishes quality food products at the reasonable price and also texture option of the best food product to their customers. In the year 1998, it started its functions to serve ever-growing consumers demand. The company has three stores with different departments. Its vision is to arouse its profit earning ability through capturing large market share.

The company was valued for its employee fairness and high customer services.

In comparison to the other competitors, the financial strength of Kudler is quite good as reflected in the forecasted Income statement and Balance sheet. The forecasted financials of the companypondered that its net revenues is showing tremendous growth. While analyzing this company, the environmental scan was necessarily researched to better realize the current critical situation of the company.

This scanning shows internal (strength & Weakness) and external environment (Opportunities & threats), which reflects that despite of the number of threats faced by the company, Kudler efficiently asserts a comparatively strong position in the global marketplace through maintaining its apparent growth.

Company’s Background

In San Diego metropolitan area, Kudler Fine Foods is an incredibly renowned trendy specialty food store that was opened in the year1998 by Kathy Kudler. The company was based at distinct California locations to serve the ever-growing consumer’s demand with high quality products at reasonable prices.It has about three stores, which was located in La Jolla, Del Mar and Encinitas. All of its three stores are equipped with the very good quality domestic and imported food materials. Each store of the company is divided into different departments such as Fresh Produce, Condiments and Packaged Foods, Fresh Bakery and Pastries, Fresh Meat & Seafood and Cheese's and Specialty Dairy Products.

Need for mission, vision, and value statements

Every organization needs mission, vision and values statements, these are like north star of strategic planning. “The development of mission, vision and values statements can provide intentions, direction, and allow employees freedom to put their own on implementation – an essential part of enthusiastic execution and good governance. With the help of these statements organization cancompel the board of directors to agree on the organization’s long-term direction and can set a new course if required or to get the organization back on track” (Ryall & Craig, 2003).

Mission Statement

“Mission statement ponders the function that the company acts in a society and fundamental reason for the presence of that organization. The corporate philosophy, identity, character, organizational image, etc. is reflecting in this statement” (Ryall & Craig, 2003). The mission of Kudler Fine Food is to provide finest selection of their foods and wines. Its mission statement is to provide best food and beverage value that they can find anywhere and to provide them with the information required for informed buying decisions.

Vision Statement

“Vision statement articulates the position that an organization would like to carry out in the near future. It brings up the long term thinking of the company that will endlessly promote the company towards its predefined targets” (Ryall & Craig, 2003). Kudler’s vision statement is to provide friendly, helpful services, quality products and competitive prices. The vision statement of the company reflects that it wants to spring up as a premier gourmet food market for customers.

Value Statement

“In achieving vision & mission, the value statement articulates the right direction to the company. The value statement comprises of the organizational values set by Kudler Fine Food that conceive ethical, social & cultural responsibility” (Ryall & Craig, 2003). Kudler value statement is about the policies and procedures that they focus on employee’s well-being and fairness. Their priority is customer satisfaction and Kudler provides tool to keep their employees motivated.

Environmental Scan

Environmental scan involves the internal as well as external scan of the foods grocery industry. The environmental scan is extremely important for constantly revising the strategy of KFF. It will help in staying in touch with the industry standards, forecasts and developments. This knowledge is critical as the company works to build its suitable strategy. The internal scan takes in the identification of the strengths and weaknesses; where as the external scan involves the identification of the opportunities and threats (Wilson & Gilligan, 2005).

Internal environmental scan

Strengths

  • Strong vision of end state: The Company has a firm vision of the end state goals that are to be achieved in future. This makes the attainment easy and this in turn helps the accomplishment of the overall objectives of the firm.
  • Information technology: The developments in technology have facilitated the employees to derive the critical customer, order and financial information by using some simple keystrokes.
  • The company has an established infrastructure and a dedicated workforce who works for the benefit of the organization.

Weaknesses

  • Lack of distribution of power: The structure of the company is such that it is not properly decentralized; most of the authority and power is not distributed among the members - employees and the managers.
  • Lack of industry knowledge: KFF lacks the knowledge of the industry which is extremely important to frame its strategies and face the competition adequately.

External environmental scan

Opportunities

  • There is an opportunity to develop an exclusive position in organic catering. This opportunity is consistent with growth strategy of KFF and it will enhance the revenues of the company.
  • It can explore the opportunity to grow the business in international markets and increase its market share in the grocery food industry.

Threats

  • The company faces the challenge of competition and the use of enhanced technology by the other companies catering in this sector.
  • Also, there is a potential lack of interest in the area of product offering. The company needs to go in for new product development and product modification to cope up with the competition.

Recommended Strategy

Strategy concerns to plan formulation and actions taken to empower an organization to carry out its intended objective effectively. To effectively determine a strategic plan for growth in such a explosive business environment, the company must understand how the various strategy like cost differentiation, cost leadership, stability & growth strategy, etc. function in the industry and regard the specific situation of the company. Our strategy also includes different measures for instance management should try to have market research to please their customers as well as managerial competence and effectualness. Company needs to develop strategic management techniques to stand in the open market economy and can satisfy their customers needs.

To effectively confront the critical issues, the recommended best strategy for Kudler is the Combination strategy. In this strategy, the company mergeproduct differentiation strategy with a market segmentation strategy is an efficacious way, so that it will be easy toequatingproduct strategy (supply side) to the dimensions of the business systems target market segments (demand side).

With this strategy, it will be easy for Kudler Fine Food to fruitfullyevaluate the foodstuff demands & supply and align its output plan consequently. With the product differentiation strategy, Kudler Fine Food Company easily make out its product image profitably and minifying competitive rivalry. Thus, it is concluded that only effective strategy makes an organization enable to cope with business requirements and attain predefined targets.

Work breakdown Structure

Key success factors

To efficaciously implement the plan, the following are the key success factors that must be considered planning system, time, roadmap, environmental characteristics, strategic continuum, control, etc. With the proper planning system and road map, we can systematically implement project tasks in the right way with effective manner. Thus, it is concluded that at the time of plan implementation, the company should consider each and every aspect related to the strategic plan.

Cash Budget:

Through making the cash budget, the financial analysis of the expenditure can be done efficiently. With this budget, Kudler Fine Food easily ascertains excess and shortage of cash at any time. In this cash budget, following are the major financial items that affect the propagation of cash flows (Shim & Siegel, 2000).Such items are Sales and Cash Collections (Cash inflows) and Purchases, Wages & salaries paid, Rent, Depreciation, etc. (Cash Outlfows). In the Cash Budget design, the following are the assumptions taken such as sales is assumed to increase by 15% every month, 85% of sales is collected in next month, purchases cost is considered 60% of sales revenue and paid in same month and total wages to management is 222000 yearly, which is equally distributed monthly.

Forecasted Financials:

Forecasted Financials would facilitate the company to know about its financial performance over the last years. With the forecasted Income statement, it will be easy to know its expected net income in the future. On the other side, projected balance sheet reflects its entire future financial performance and nature of the business (Shim & Siegel, 2000).The forecasted financials of Kudler Fine Food are shown below:

Risk Management Plan and Contingency planning

Risk Management Plan is defined as a plan document that anticipates unexpected risks and to formulate the response plans in order to minifyrisk. The risk appraisal matrix is a vital part of this management plan. With this plan, it will be easy to key out, evaluate and prioritizethe risks through unified and efficient application of resources in order dilute, scrutinize and control the impact of inauspicious consequences (Portny, 2006). To cope with the critical risks, the KudlerFine Food should follow the following risk management plan. Such risk management plan includes:

  • Identification of risk: This is the first and foremost step in the risk management plan. In this step, organization identifies all the risks associated with project. The following are the risks faced by KFF includelack of a management team and poor planning.
  • Analysis of alternatives: This is another important step in which we key out the various alternatives to solve out the various risks. The various alternatives are implementing good strategic plan, develop appraisal and planning system.
  • Implement strategies:In this step, we will choose best alternative that ultimately proves to be beneficial for the organization to cope up with the contingencies. A good strategic plan is the best alternative that furnishes the information regarding the different elements of the strategic management.
  • Corrective actions or feedback: In this step, we will assess the actual and standard results in order to key out the difference, so that it will be easy to take corrective actions accordingly.

If our sales become less than expected then we will our bests to do some extra promotional activity and if vice versa then we will try to assess the reason why. Kudler is going to monitor which products are selling well and which ones don’t. They also need to improve automated system that will help them monitor more.

Conclusion

The aim of every business is to prosper and increase the bottom line for the
stakeholders. Kudler Fine Foods shares this distinction, too. Customer satisfaction,
lower costs and prices, increased quality; productivity, enhanced profits and market share
are the seven aspirations of the Deming Chain Reaction (Cohen, 2010). The strategic
ambition of Kudler Fine Foods' is to achieve and sustain all the above values at all
times; especially when challenged by unfavorable conditions of the marketplace, like
global trends and competition. Such leadership requires a comprehensive management
plan (TQM) to achieve efficiency, solve problems, global ISO 9000 standardization,
statistical control other aspects of Kudler's business (Britannica, 2010). New statistical
data are an asset in areas like developing a balanced scoreboard; means of assessment;
reviews and audits; a control system for managing data systems (Godfrey, 2010). All the
above coupled with the consistent expressions of strengths and other SWOTT positives
will generate a healthier the return on the investment (ROI).

Cover Letter

March 14, 2010

Board of Directors

Kudler Fine Foods

Dear Sir/Madam,

I would like to share my thoughts regarding strategic plan. Kudler’s strategic planning is an effective way that facilitates in attaining objectives. The strategic planning renders the information related to the varying strategic management elements. In addition to this, this planning also furnishes the manner in which the company and its strategists propose to put the strategies into action. The company's vision, mission and value statement entirely depends on the strategic planning. In keeping the plan current, Kudler Fine Food may incorporate this thinking through properly coordinating all its statements with strategy. In addition to this, company should keep in mind the time frame in the formulation of their strategic plan.

Regards,

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Bibliography

Britannica Concise Encyclopedia (2010). Total Quality Management. Retrieved 3/20/10.

Answers.com.

Cohen, P. (2010). Deming's 14 Points.Retrieved March 20th, 2010.

Godfrey, A. B. (1997). Statistical Standards and Quality. Retrieved March 20th, 2010.

Portny, S.E. (2006). Project management for dummies. (2nd ed.).

For Dummies.

Ryall, M. J. & Craig, J. C. (2003). Strategic Management Kogan Page Publishers.

Shim, J. K. & Siegel, J. G. (2000). Financial Management (2nd ed.). Barron's Educational Series.

Wilson, R. M. S. & Gilligan, C. (2005). Strategic Marketing Management: Planning,

Implementation and Control (3rd ed.). Butterworth-Heinemann.