Kudler_Fine_Foods_Problem_Statement

Kudler Fine Foods Problem Statement Management 521 November 29 2010 Kudler Fine Foods (KFF) is a premier gourmet grocery store with obligations to its customers and employees to remain a front-liner in the field and to provide quality produce and wine. KFF boasts a broad variety of organic produce, obtained from local as well as national producers, and a large selection of imported and locally produced wines and spirits. The variety of inventory is unlike any other grocer in the area. KFF puts customer service on the forefront and strives to provide an environment with friendly and helpful staff. This customer oriented approach has been the reason behind customer loyalty that brings repeat visits every 8 to 10 days. The sales of La Jolla location have been favorable which provides a need and opportunity to open a new location (Kudler Fine Foods Strategic Plan, 2003). Development of a small business presents new issues to a business owner. Along with a growing business, the number of issues that need dealing with also grows: The larger a company, the more issues it will be presented with. It is impractical for Kathy to continue on with all of the administrative duties if she is to take her business and her vision to the next level. With the size of the business also comes increased competition, a point that KFF is not fully realizing. KFF’s first attempt at expansion was not as successful as it was predicted to be. The Del Mar location did not do well as expected, in part because there was limited potential customer population in nearby areas. With the opening of the new Carlsbad location, the failing Del Mar store will then be merged with it (Kudler Fine Foods Strategic Plan, 2003). Issue and Opportunity Identification The KFF, La Jolla location has established itself, and the customer base is growing steadily. The business model that Kathy has envisioned has earned a strong reputation, and the next logical step was to expand the business. After much deliberation, Del Mar was settled upon to be the candidate for the second location for KFF. Del Mar was located at a distance far enough from that of the La Jolla location that it was not convenient for residents of Del Mar to drive there, but then still close enough for Kathy to visit regularly to oversee operations and ordering. Even after thorough research of Del Mar’s economic and demographic information, and that it appeared to be a prime location for a successful store, its population proved to be too small to support the gourmet grocer. After reviewing the financial projections and data, Kathy decided to close the Del Mar location and merge it with a new store to be built in Carlsbad. Carlsbad is a beach community that is projected to have high summer sales and, during summer the expectation is that they will experience high sales. Carlsbad has a much larger population at around 50,000 people with an average household income of $75,000 (Kudler Fine Foods Strategic Plan, 2003). Carlsbad is also a beach community, with high projected summer sales. Expanding to Carlsbad will prove more difficult for Kathy Kudler to oversee daily operations on a regular basis. Keeping good connections with customers as well as employees is a priority for Kathy Kudler, and with the locations of KFFs broadening, it will be difficult for her to cultivate these relationships and continue to maintain a hold on all aspects of ordering and finances of each store. Bartram (Growing Pains, 2010) states, "When you launch a business with a small group of people, the members all share the same beliefs, but when the company becomes larger, you end up with some people who don't necessarily share the same views.” Moreover, as her business grows in size Kathy will need to seek the expertise and knowledge that other more experienced individuals can provide. These people must also share her vision and beliefs in how her business should operate. Business owners must be able to recognize their shortfalls and solicit others. Problem Statement After close examination of the failed Del Mar location, KFF management has a responsibility to learn from its mistakes and reevaluate accordingly. A new location should be chosen on more criteria than the community’s median income and how easily it will be for Kathy to make frequent visits there. Factors, such as the total population including its average age and level of education, and potential competition should be carefully assessed as well. With careful analysis of these factors, KFF will enhance the possibility of success in their expansion efforts. Kudler Fine Foods will be the choice gourmet grocery store chain for the discerning shopper that is looking for the finest produce, meats, cheeses and wine. Expanding KFF into emerging markets in other cities is the ultimate goal. This long-term plan includes, but is not limited to, locations in California (Santa Barbara, San Francisco, and San Diego) as well as other states: Naples, FL; Scottsdale, AZ; Greenwich, CT (Kudler Fine Foods Strategic Plan, 2003).