“Strategic competitiveness can be attained only when the firm’s selected structure is congruent with its formulated strategy” (Gomez-Mejia et al., Chapter 7, pg 28). Kudler Fine Foods continues to manifest growth based on Mrs. Kudler’s original vision of a one stop gourmet food store. Having direct control over hiring, ordering and customer service, she has built the company into an expanding entity. The following is a discussion of strategy implementation, technology and opportunities, strategic recommendations and external forces to be aware of.
Most growing companies have used information technologies (IT) to enhance operations and improve customer service. Mrs. Kudler has plans to add to the inventory and ordering automation by introducing new e-commerce capabilities and an online catering link (Kudler Fine Foods Portal, Strategic Plan, pgs 15-16). Strategic Information Systems have the ability to amplify strengths into potential sustainable competitive advantage. For example, British Airways implemented customer service online and self checking at the airports. Though the restructuring effected employee morale due to job loss, the company increased in efficiency and cost leadership. Mrs. Kudler is known for her kindness and generosity to employees, so the company will only prosper with new IT applications.
Two main approaches of Strategic Information Systems are mostly used: inwardly focused and outwardly focused. 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). Companies that develop a unifying strategic theme aligned with business unit activities have more of a chance of survival than the mirroring or boom and bust type companies. Thanks to new technology, the internal workings of Kudler Fine Foods can be optimized far beyond the owner’s initial vision. For example, the new website and inventory/ordering automation will allow cash flows to be directed towards geographic expansion instead of traditional operations functions.
Outwardly focused technology applications will help Kudler Fine Foods assess the external environment in the gourmet industry. “Such activities to gather information on competitors are part of competitive intelligence” (Turban et al., Chapter 13, pg 4). Knowledge of other products in demand will help Mrs. Kudler forecast changes and additions needed to remain current with the consumers she maintains. Additionally, developing an awareness of trends occurring will prepare for unpredicted threats to the organizational expansion plans. A strong example is how Frito Lay collects field data from all over the U.S. to assess inventory and product popularity. Common competitive intelligence information used is found on internet newsgroups, store websites, financial statements at the SEC (Securities Exchange Commission), customer input and professional research companies (Turban, Chapter 13, pg 5).
Kudler Strategy
Developing sustainable competitive advantage requires strategic awareness of how and what a company should focus on. The response strategies that Michael E Porter (and other scholars) has termed are very useful in describing Kudler Fine Foods. Due to the careful attention Mrs. Kudler has given to the company, she exhibits a combination of differentiation, focus and cost leadership. In addition, response strategies such as growth, internal efficiency and customer orientation are also identifiable. “Kudler Fine Foods is committed to providing our customers with the finest selection of the very best foods and wines so that our culinary visions can come true” (Kudler Fine Foods Portal, Strategic Plan, pg 1). The salient qualities of Mrs. Kudler’s products show differentiation, the commitment to gourmet foods displays focus and new plans to buy direct from local growers will achieve cost leadership. New store locations (growth), information technology applications (internal efficiency) and special ordering (customer oriented) are examples of the added response strategies (Turban et al., Chapter 13, pgs 7-8).
When Mrs. Kudler found that her community grocery store did not carry the products she needed for her own cooking, the company was born. Vision created Kudler Fine Foods, and this is the main reason that business activities continue to be improved every quarter. The central theme becomes part of the company structure as it expands. Now bakery goods are guaranteed fresh or they are free, special orders are taken, the store promises the freshest of organic meats and seafood, gourmet cheeses are stocked, and also an extensive wine inventory. Reliance on strong customer relationships supported by efficient information technology will hopefully, guarantee the company’s future. “Success is getting the right customers and keeping them” (Gomez-Mejia et al., Chapter 7, pg 28). Not only is growth important to Mrs. Kudler, she believes in satisfying the customer value chain.
“Strategic management involves the major decisions, business choices, and actions that chart the course of the entire enterprise” (Gomez-Mejia et al., Chapter 7, pg 3). The success of Kudler Fine Foods has much to do with Mrs. Kudler’s effective leadership that inspires employee motivation. Her monthly operations meetings are very democratic which re-enforces transactional/relational bonds with employees. This is very important to the company, because staff members respond best to empowerment and support. By including management in product sampling at all the meetings, Kathy Kudler addresses staff needs that translate into proactive behavior and better results.
Tactics to Realize Strategy
Developing as a company that will sustain requires an understanding of strategic formulation and implementation. Primary to any strategy is a strong mission statement to define functions of the organization. Ideally, the overarching theme will connect through processes and lead to the completion of enterprise objectives. Kathy Kudler has grown the business because she has transformed her thoughts into a structure that produces returns. “Strategic intent is internally focused, indicating how the firm tends to use its resources, capabilities and core competencies to win competitive battles…strategic mission flows from strategic intent, defining its external focus in terms of what the firm plans to produce and market, utilizing the firm’s internally based core competence” (Gomez-Mejia, Chapter 7, pg 22).Establishing tactics for Mrs. Kudler to formulate successfully and implement her plans must include efficient resource allocation, cost leadership, differentiation and focus. How the company decides to manifest these strategies, and the combination there of, will decide the future of the company.
Suppose that another organization similar to Kudler Fine Foods arrives near to one of her locations. Depending on how sharp management is regarding optimal strategy combinations, the new rival store could decrease Mrs. Kudler’s market share. In this competitive world, one never knows when a developer will hire the best strategists, analyze the gourmet food market and construct an impeccable gourmet store business plan for Orange County. This could devastate the Kudler customer base. Therefore, Mrs. Kudler can mitigate this possible scenario by actively assessing the strength of her advantages and weaknesses in strategy.
“Each generic strategy is vulnerable to different types of attacks” (Porter, Competitive Advantage, pg 21). So often businesses favor cost leadership, which easily loses market share due to lack of differentiation. Management must always remember that efficiency is not gong to achieve competitive advantage alone, but must be married to strategy. Therefore, Mrs. Kudler should consistently remind employees that the consumers are loyal due to her rare/high quality products, customer service and relatively low cost. For now, this is sufficient for her to sustain. Preparing for the future survival of the company, however, requires careful analysis and internal evaluation of how various differentiation concepts will establish loyalty connecting to the customer’s family orientation. Kudler Fine Foods is focused on the gourmet chef, however, will have to formulate and implement ways to secure customers by becoming a part of their lives.
Kudler Competitive Awareness
As mentioned in the first section of this paper, Strategic Information Systems are more frequently used to enhance a company’s competitive situation. “Research indicates that the percentage of companies using IT to support competitive intelligence increased from 31 percent in 1993 to about 50 percent in 1999” (Turban et al., Chapter 13, pg 5). The internet has become a powerful strategic tool for organizations to gather data on rival companies. While information technology exponentially grows in the world today, Kudler Fine Foods should take advantage of applications for more informed strategic decisions.
An effective way for Mrs. Kudler to update her processes of analysis is to hire an experienced person trained in competitive intelligence IT applications. The company only has 2 computer support technicians on staff meant to solve tech problems. In order to function in this fast pace, constantly changing world, she will need to add competent analysts. Confronting un-predictable competition through active internal business intelligence should always bring hope to an organization’s stability.
Conclusion
The central point of this paper was to discuss the necessity for commitment orientation when deciding on formulation and implementation strategies. “In reality, strategy formulation and implementation are two sides of the same coin” (Gomez-Mejia et al., Chapter 7, pg 28). Mrs. Kudler’s company has a brilliant chance of continuing the positive cash flow it has been earning. All the organization has to do is accept the fact that strategy combinations and information technology is essential in updating and securing substantial returns. Mrs. Kudler will succeed by creating a connection between the store products/cooking ware and the consumer’s lives. This will help develop the sought after sustainable competitive advantage.
References
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Kudler Fine Foods Virtual Organization. Retrieved July 2, 2008. University of Phoenix
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