Since 1998, Kudler Fine Food (KFF) has established itself as one of the premier upscale epicurean stores in the greater San Diego area. Kathy Kudler, founder and president of KFF, established the first store in 1998 and launched two more within the next 5 years. KFF has a top-level team of directors and managers who are committed to the ongoing success and growth of the organization. This paper will
identify the primary functions of management and KFF personnel who satisfy these functions, explore the role of information technology within the organization, and analyze KFF’s market using Porter’s Competitive Forces.
Primary Functions of Management
Planning and Strategizing
One key function of management involves identifying organizational goals and developing a plan necessary to achieve these goals. This planning and strategizing requires a realistic assessment of the organization, including strengths, weaknesses, opportunities, and risks (Gomez, p5.).
Kathy Kudler, having served as a vice-president of Marketing for a large defense contractor, is a proficient strategist. Her initial business plan led KFF to a profit within the first nine months of operation. Kathy and her department managers use forecasts to extrapolate past data into future projections (University of Phoenix, Supply Chain Overview).
A company’s organizing function of management facilitates its resources. An effective organizer will arrange personnel, funds, physical assets, technical resources and information when working to achieve desired goals (Gomez, p.6).
Harvey Stephens, the director of finance and
accounting, demonstrated his organizing leadership style initiating the implementation a company-wide database. The director of store operations, Yvonne Reynolds, has also shown effective organizing management in managing the inventory, purchasing and logistics of each store.
Some leaders are very effective in motivating and empowering individuals to do their most capable work. The function of leading involves clear communication of corporate goals, employee motivation, and careful attention to working environment (Gomez, p. 6).
Kathy Kudler demonstrated effective leadership by communicating her vision and KFF corporate goals to her executive management. Further leadership of Yvonne Reynold’s encouraged department managers to collaborate with there counterparts at other stores by comparing merchandise price, quality, and delivery.
A controlling manager assesses the company goals, evaluates its direction, and unifies the direction and focus. This leader will measure performance and implement necessary changes while monitoring their progress (Gomez, p.6).
As director of administration and human resources, Brenda Wagner develops policies and directs and coordinates human resource activities (University of Phoenix, Job Description). Because both operations and information systems management deal with specialized issues related to control (Gomez, p.6), it is reasonable to identify Harvey Stevens and Yvonne Reynolds as other chief controlling managers.
KFF management has successfully implemented information and technology management. A wide area network (WAN) allows each store real-time communication to effectively manage inventory and vendors. The La Jolla and Del Mar stores host two inventory servers that can communicate with each other and utilize information received from the point of sale (POS) servers at all three stores (University of Phoenix, Information Technology: Networks). The automated data transmission of the POS servers makes inventory management and control manageable. The POS system also allows for electronic payments.
The KFF database stores information about customers, vendors, orders, and inventory. This data provides the executive team with key information when determining direction, developing strategies, and setting clear and focused goals.
Finally, KFF can attract customers with a relevant and useful website, allowing customers to view store locations and products through simple one-click navigation.
Five Forces of Porter’s Model
According to economist and management strategist, Michael Porter, any organization can build a competitive advantage by understanding and focusing on five competitive forces. Because “competition is at the core of a firm’s success or failure” (Turner, p. 606), KFF management can develop key organizational strategies by assessing how each force currently affects KFF operations.
Threat of Entry of New Competitors
Kathy Kudler found an open market for a gourmet food store in the late nineties. Since that time, epicurean cooking has grown into a rapidly increasing American trend. Mintel International Group estimated that serious cooking enthusiasts account for an estimated $25 billion in sales of specialty food and drinks, kitchen appliances, and other kitchen related spending (Moran, 2007). As the demand increases there will be new competitors who share Kathy’s combined interest in gourmet cooking and business opportunities. Additionally, large chain grocery stores are constantly reinventing themselves as customer interests change. These stores can become new competitors as they add products and services currently offered by KFF.
Bargaining Power of Suppliers
KFF relies on suppliers to offer the best possible prices and timely delivery. Management understands the importance of these suppliers, their services, and continuing a positive relationship with each vendor. Marketing has recently emphasized the need to reduce ordering costs, minimize the quantity of food ordered, and make sure a product does not sell-out. The purchasing department followed up with a supplier relations program currently being rolled-out (University of Phoenix, Marketing Overview).
Bargaining Power of Customers
A 2007 customer survey indicated that 85% of customers surveyed believed the merchandise sold was a good value for their money (University of Phoenix, 2007 Market Survey). This survey showed favorable responses regarding store hours, product selection, product quality, and overall satisfaction. Through this survey, KFF management realized that their customer service and staff knowledge was not at an acceptable level. The marketing department has proposed new initiatives that will cater to the customer including cooking classes and frequent buyer points programs (University of Phoenix, Marketing Overview).
Threat of Substitute Products or Services
KFF products are the primary factor in their success. Kathy Kudler has managed to create an enterprise based on desirable products and the trend of home-based gourmet cooking. As trends continue to change, KFF will need to adjust to consumer demand.
Rivalry Among Existing Firms in the Industry
KFF continues to encounter rivalries in the industry. Trader Joes currently has 10 locations in San Diego county, including a store in Encintas and one in La Jolla (Trader Joes). Whole Foods has over 20 stores throughout Southern California including one store in La Jolla (Whole Foods Market).
Understanding the power of rivalries, recent KFF marketing strategies include advertising in all forms of media and hosting public relations events and programs (Marketing Overview). The sales and marketing department has approved additional expenditures on market analysis through size and opportunity studies, food marketing trend studies, and benchmarking.
KFF is aware of many influences affecting corporate success. By exploring KFF’s history, examining their current business and identifying future strategic implementations, this paper has demonstrated KFF’s thorough attention to leadership functions, technology advantage, and competitive forces.
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