Kudler Fine Foods is the brain child of Kathy Kudler. She envisioned a one stop gourmet food store and has grown to three locations to date. She continues to maintain direct control over large bulk purchase order items, stringent customer service policies, and hiring. The following is a discussion of how the organization competes in the marketplace and the strengths and weaknesses of the firm as indicated by the marketing surveys completed by their customers. There will also be discussion of the market structure which best applies to the organization and how that structure positively and negatively affects the firm, how the effectiveness of the competitive strategies in the market structure affect the organizations long-term profitability, and what competitive strategies recommendations may be made. How Does Kudler Compete Kudler Foods competes on a differentiation strategy. While the advertising is similar to the average grocery stores in the area, the advertising is not built on a loss leader criteria. Kudler Foods is one of only a few competitors in Orange County that offers a complete gourmet shopping opportunity. The company considered the greatest competition is the Cardiff Seaside Market and is direct competition to the Encinitas and Del Mar locations. If left unchecked and depending on how effective the new competitions managers are at strategic combinations, the competing store could negatively impact Kudler Foods market share. A situation of this nature could decimate Kudler Foods customer base. Active assessment of strategy strengths and weaknesses is necessary to mitigate the challenges of this possibility.Not the Essay You’re looking for?GET A CUSTOM ESSAY Strengths and Weaknesses Kudler Fine Foods marketing surveys were quite revealing of the firms strengths and weaknesses. Customers are happy with the displays and lay-out of the store. Customers were happy with the merchandise they purchased even though they were not happy with the value they received for their money. Customers are split almost down the middle in regards to how they feel about the customer service they receive. That sentiment is not a reflection on how knowledgeable was the customer service person; customers overwhelmingly voted positively when asked that question. Overall, the customers feel good about the organization, how the company is branding itself as a premier gourmet market, the quality of the products and the knowledge level of the service representative. Best Market Structure The best market structure for Kudler Foods is oligopoly. Oligopoly, as defined by Investopedia is, A situation in which the market is controlled by a small number of firms. (Investopedia, 2012) Oligopoly requires strategic thinking. A real life company that has the same market structure as Kudler Foods is The Fresh Market. The Fresh Market carries specialty/gourmet food items, meats, wines, cheeses, and bulk food stuffs. The Fresh Market also offers food and wine tastings, and attracts a wealthier clientele who fancy themselves as gourmet foodies. A large portion of their inventory is organically produced. Their customer service levels are a point of great pride as they know it is not just the food but the service that keep customers coming back. There are however, positive and negative effects of this market structure. Positive and Negative Effects A negative effect of oligopoly is that it is largely inefficient-both productively and allocatively. What this means is that oligopolies neither produce in the least costly manner nor produce the right amount of product according to societys wants. A positive effect of this market structure is the economic profits. These profits, for the growth purposes of Kudler Foods, could be used for technological advances so they may offer improved products, costs, prices, and allow them to stay ahead of the competition now and in the future and maintain long term profitability. Recommendations A firm recommendation is to use information technologies (IT) to enrich operations and increase customer service; specifically inwardly focused systems. An inwardly focused system is focused on enhancing the competitive position of the firm by increasing employees productivity, improving teamwork and enhancing communication (Turban et al., Chapter 13, pg 3). Employees are certainly knowledgeable, as per the marketing survey results, but could use some additional training in increasing customer service skills. This could be accomplished by hiring an expert in the field to come in and teach service skills to the employees. To ensure the skills are used, Kudler Foods could tie a small part of the employees compensation to good reports from customers. In addition, Kathy Kudler is making plans to introduce new e-commerce capabilities as well as a catering link on the new website slated for launch in 2004. These steps will add automation to inventory ordering and reach potential customers outside of the geographical area they currently service. (Kudler Fine Foods Portal, Strategic Plan, pgs 15-16). The use of strategic IT will showcase strengths and perhaps give sustained competitive advantage. This new automation will also allow cash flows to go to the geographical expansion Mrs. Kudler wishes to achieve rather than operations functions. Conclusion The central point of this paper was to offer a market analysis for Kudler Foods and offer recommendations based on that analysis. Commitment to strategy both in formulation and implementation are vital. In reality, strategy formulation and implementation are two sides of the same coin (Gomez-Mejia et al., Chapter 7, pg 28). Given the current circumstances, Kudler Foods has an excellent opportunity to maintain the positive cash flow it has been earning. If Kudler Foods will accept that strategy formulation, implementation, and technological advances are essential to securing future significant returns. Kudler Foods will succeed by creating a connection between increased customer service, an internet presence, automated ordering and customer buying habit tracking, and customers lives. The sustainable competitive strategic advantage that Kulder Foods wishes to maintain and elongate will most certainly be realized. References Gomez-Mejia, Luis R. Balkin, David B. (2002) Management 1e. New York: The McGraw Hill Companies. Investopedia, Oligopoly (2012) Retrieved on April 13, 2012 http://www.investopedia.com/terms/o/oligopoly.asp#axzz1rygOkvlL The Fresh Market, The Food (2012) Retrieved on April 15, 2012 http://www.thefreshmarket.com/Company/foods.html Turban, Efraim. Rainer, R. Kelly. Potter, Richard E. (2003) Introduction to Information Technology. New York: John Wiley and Sons Inc.
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