unning head: KUDLER FINE FOODS

Kudler Fine Foofs
University of Phoenix
MGT/521
June 24, 2009

Kudler Fine Foods
Reviewing Kudler Fine Foods business plans indicated one main area of concern, which is catering. Kudler Fine Foods has established itself in a niche market of fine foods. The original La Jolla, California store has been a total success and afforded the opportunity to move the business forward. Kudler Fine Foods needs to continue growing in strong areas while allowing weaker areas to be cut away.
Kudler Fine Foods has three locations and the idea of another location that would condense one existing store with a soon to be built location. The original La Jolla, Ca location services a population of 44,424 with the median home price coming in just over two million dollars. The second location at Del Mar, CA services a population of 4,389 with the median home price of $98,257. The third location is in Encinitas, Ca with a population of 50,000 and an average household income of $75,000.Kudler has three different locations with three different demographics and areas of opportunity (Kudler Fine Foods, 2003). Not only does the store have fine foods with many different departments the business also does catering.
The problem that Kudler Fine Foods faces is the entrance of new competition into the market and a weakening economy. The catering side of the business, which Kathy Kudler does by herself, has a 25% better profit margin than does the store. Kathy keeps costs low by doing the catering herself and receives tips that generally cover the expenses of the event. More time and energy needs to be spent on ways to increase the number of catering events to maximize profits.
Investing time and energy in finding ways to keep the level of service and quality high will create a lucrative catering entity of the business. The opportunity to hire someone to manage the day to day runnings of the stores must be realized. Kathy needs more time to devote to the catering service and work on expanding the business in the catering direction. The proper manager will help Kathy realize her dream by taking some of the more time consuming tasks and allowing more time for business development. The end state goal would be to have success on both side, the store and catering side of the business.
Other alternatives to expanding the catering side of the business would be to focus more on the stores expansion and success. The plan to condense the Del Mar store is a good decision. The market may not exist to support the type of store Kudler Fine Foods is. The opportunity exists to continue looking for new markets to expand into. With a weak economy and more competition this does not seem like the logical thing to do. The La Jolla store is catering to a very rich clientele. Finding similar markets may be possible but difficult.
The risks associated with expanding the catering business is less that the risk of expanding the stores. Hiring a manager is necessary with or without the catering side of the business, so that cost does not change. Currently Kathy is able to take care of the catering herself with very little cost. Expanding the catering business will cost money but with such high profit margins the risk is minimal. Even if the catering business is not as successful as hoped not much will be lost in that event.
The decision to Kathy is to hire the manager to take on the responsibility of day to day operations in the stores. Kathy is to devote her time and energy into expanding the catering business. Marketing and advertising will be Kathy’s focus. 10,000 flyers is a start but a much more aggressive attack must take place. Kathy will be able to maintain that good customer service, while catering, which has helped her business succeed up to this point.
The first task to developing and implementing the solution is to hire someone to manage the stores. Once the manager has been selected and trained Kathy can expand her catering business and have time to look at other avenues for expansion. Kudler Fine Foods will have the opportunity to advertise this new expanded catering service at little cost in the existing stores.
Kudler Fine Foods has a niche in the fine food market. The expansion of the catering service will have wonderful results for the Kudler Fine Foods family. The expansion and success of the catering business will open the door to other markets not yet reached by the store.