Finally the controlling aspect consists of having metric in place for measuring the impact of changes and using that as a basis for justifying future resource allocation or corrective action.
Management Structure At Kudler
The founder CEO of Kudler foods is Kathleen Kudler
There are three directorships who report to Kathy; Finance Harvey Stephens, Yvonne Reynolds of operations and Brenda Wagner of human resources. A vertical management style, with loose job descriptions whereby the owner performs many functions as was the case for Creative Gourmets (n.d) 1989, from customer facing to purchase ordering and marketing. Kudler Fine Foods lacks sales, marketing, and customer service or information technology directors.
Applying Porters Five Competitive Forces Model
1. The threat of new entrants –for Kudler foods this is an ever present reality. There are many potential entrants because the entry barriers are low. Many companies are already in the specialty gourmet food industry. The more players the more price becomes a factor.
2. Supplier bargaining power- suppliers or supplier groups may have an inordinate advantage in determining terms of business. For instance Kudler may not have need of high volume. Therefore they may be unable to negotiate deeper discounts and save costs as other large scale companies can. Bernard Casavant executive chef at Chateau Whistler resort in British Columbia says the” key to keeping the hotel’s food as fresh as possible is to maintain good relations with suppliers” Jaquette (1996). Some of Kudler’s competitors like whole foods enjoy volume purchase discounts. Kudler’s response is to pick a high end niche and differentiate, with personal service and product quality Clanton (2000).
3. The threat of substitute products- the market may have other food companies producing the same product bit at a lower price break. The Carlsbad and La jolla areas already have many bread and apples and wine suppliers. Further if customer loyalty
is low and the products are price elastic there may be customer defections to the competition. Kudler is well positioned nevertheless because they have positioned themselves as convenient and have a personal touch e.g. offering to make special orders and having in store demos as well as wine tasting.
4. Bargaining power of customers- if the products are price elastic to demand for Kudler’s specialty gourmets may fall with every price increase. In such situations customers may not be
loyal and therefore present challenges especially if margins are already low for Kudler. The importance of using technology to lessen costs and provide customers access to product in the least cost effective way is desirable. Fortunately Kudler’s customers are in the upper middle class range. High household incomes mean the presence of disposable income and price in exchange for value may not be an objectionable proposition.
5. While rivalry is healthy from customer standpoint, it may hurt Kudler’s bottom line if there is stiff rivalry within the industry, it may lead to price wars, Duff (2009) and cheap products undercutting quality and affecting revenues.
Conclusion
Kudler Foods is poised to grow into new markets. Its mission is to target its discerning high end customer’s need for fresh quality gourmet foods and wines. The industry is price competitive and entry barriers are low. Companies can enter and leave the industry with relative ease. While Kudler's target clients may have disposable income, the need for value added services deserves attention.
Deploying relevant technology and the internet can help Kudler achieve management efficiencies and better prepare the company for planned growth ahead.
References
Clanton, B. (2000). Gourmet-to-go trend goes over big with local diners. New Orleans CityBusiness (1994 to 2008), 21(6), 10. Retrieved from MasterFILE Premier database.
Jaquette, L. (1996). Getting freshest foods increases bottom line. Hotel & Motel Management, 211(5), 40. Retrieved from MasterFILE Premier database.
(n,d) 1989. Creative Gourmets." Restaurants & Institutions 99.14 (1989): 56+. Academic OneFile. Web. 7 Nov. 2010.
Mike, D. (n.d). Whole Foods Dropping Prices To Raise Its Prospects. R&FF Retailer, 7(10), 14. Retrieved from ProQuest: ABI/INFORM Complete database.
Young, B. (2002). Building a future. National Provisioner, 216(4), 28. Retrieved from MasterFILE Premier database.
