2010-02!14!064719 Kudler Strategy Implementation Original
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Transcript of 2010-02!14!064719 Kudler Strategy Implementation Original
Kudler’s Strategic Planning 1
Kudler’s Strategic Planning
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Kudler’s Strategic Planning 2
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 company
pondered 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 year 1998 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
Kudler’s Strategic Planning 3
Fresh Produce, Condiments and Packaged Foods, Fresh Bakery and Pastries, Fresh Meat &
Seafood and Cheese's and Specialty Dairy Products.
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 supply good quality or value for money food products & wines
to their consumers as per the demand at fair cost. Its mission statement also reflects that its
selection procedure is matched with experienced and well-versed staff and also wants to render a
delicious and delighting shopping outing or experience to all of their consumers.
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). The vision of the company is
to maximize its profitability through furnishing finest choice of the best quality food products. In
addition to this, its vision is to raise its market share in order to assert its growth. 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). The value statement
of Kudler focuses on employee’s equity, loyalty, high dedication, integrity & honesty, consumer
Kudler’s Strategic Planning 4
service, good quality standard, impertinence, cleanliness, following healthy criteria, etc. All its
values enable the company to effectively keep long term relationship with its customers,
investors, employees, etc. that ultimately proves beneficial for the company.
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
Kudler’s Strategic Planning 5
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
Kudler’s Strategic Planning 6
strategy like cost differentiation, cost leadership, stability & growth strategy, etc. function in the
industry and regard the specific situation of the company.
To effectively confront the critical issues, the recommended best strategy for Kudler is
the Combination strategy. In this strategy, the company merge product differentiation strategy
with a market segmentation strategy is an efficacious way, so that it will be easy to equating
product 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 fruitfully evaluate 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:
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Use of new techniques and skilled labor – enhanced IT and qualified personnel
Level 1 (Objective)
Level 2(Functional tactics)
Level 3(Action items)
Growth – To achieve 15% sales growth
Expansion
Diversification
Cost leadership
Product differntiation
Combination strategy
In local market – become no. 1 grocery food store
In Global market
New product development developing more healthy, fresh and nutritious food
Modification in existing products
Increase production process
Create brand image
Use of different features and design
Market segmentation
Product differentiation
Kudler’s Strategic Planning 8
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:
Kudler’s Strategic Planning 9
Risk Management Plan
Risk Management Plan is defined as a plan document that anticipates unexpected risks
and to formulate the response plans in order to minify risk. The risk appraisal matrix is a vital
part of this management plan. With this plan, it will be easy to key out, evaluate and prioritize
the 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 Kudler Fine 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 include lack 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.
Kudler’s Strategic Planning 10
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.
Thus, it is concluded that through applying this risk plan, the management can easily monitor
and control risks in the effective way and also increase the chances of achieving success.
Cover Letter
February 12, 2010Board of DirectorsKudler 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,
Your name
Kudler’s Strategic Planning 11
Bibliography
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.