Kudler’s Strategic Planning 1

Kudler’s Strategic Planning

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Executive Summary

Kudler Fine Food is a western United States based company, which is situated in San Diego

metropolitan area. It furnishes quality food products at the reasonable price and also texture

option of the best food product to their customers. In the year 1998, it started its functions to

serve ever-growing consumers demand. The company has three stores with different

departments. Its vision is to arouse its profit earning ability through capturing large market share.

The company was valued for its employee fairness and high customer services.

In comparison to the other competitors, the financial strength of Kudler is quite good as reflected

in the forecasted Income statement and Balance sheet. The forecasted financials of the company

pondered that its net revenues is showing tremendous growth. While analyzing this company, the

environmental scan was necessarily researched to better realize the current critical situation of

the company.

This scanning shows internal (strength & Weakness) and external environment

(Opportunities & threats), which reflects that despite of the number of threats faced by the

company, Kudler efficiently asserts a comparatively strong position in the global marketplace

through maintaining its apparent growth.

Company’s Background

In San Diego metropolitan area, Kudler Fine Foods is an incredibly renowned trendy

specialty food store that was opened in the year 1998 by Kathy Kudler. The company was based

at distinct California locations to serve the ever-growing consumer’s demand with high quality

products at reasonable prices. It has about three stores, which was located in La Jolla, Del Mar

and Encinitas. All of its three stores are equipped with the very good quality domestic and

imported food materials. Each store of the company is divided into different departments such as
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Fresh Produce, Condiments and Packaged Foods, Fresh Bakery and Pastries, Fresh Meat &

Seafood and Cheese's and Specialty Dairy Products.

Mission Statement

Mission statement ponders the function that the company acts in a society and

fundamental reason for the presence of that organization. The corporate philosophy, identity,

character, organizational image, etc. is reflecting in this statement (Ryall & Craig, 2003). The

mission of Kudler Fine Food is to supply good quality or value for money food products & wines

to their consumers as per the demand at fair cost. Its mission statement also reflects that its

selection procedure is matched with experienced and well-versed staff and also wants to render a

delicious and delighting shopping outing or experience to all of their consumers.

Vision Statement

Vision statement articulates the position that an organization would like to carry out in

the near future. It brings up the long term thinking of the company that will endlessly promote

the company towards its predefined targets (Ryall & Craig, 2003). The vision of the company is

to maximize its profitability through furnishing finest choice of the best quality food products. In

addition to this, its vision is to raise its market share in order to assert its growth. The vision

statement of the company reflects that it wants to spring up as a premier gourmet food market for

customers.

Value Statement

In achieving vision & mission, the value statement articulates the right direction to the

company. The value statement comprises of the organizational values set by Kudler Fine Food

that conceive ethical, social & cultural responsibility (Ryall & Craig, 2003). The value statement

of Kudler focuses on employee’s equity, loyalty, high dedication, integrity & honesty, consumer
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service, good quality standard, impertinence, cleanliness, following healthy criteria, etc. All its

values enable the company to effectively keep long term relationship with its customers,

investors, employees, etc. that ultimately proves beneficial for the company.

Environmental Scan

Environmental scan involves the internal as well as external scan of the foods grocery

industry. The environmental scan is extremely important for constantly revising the strategy of

KFF. It will help in staying in touch with the industry standards, forecasts and developments.

This knowledge is critical as the company works to build its suitable strategy. The internal scan

takes in the identification of the strengths and weaknesses; where as the external scan involves

the identification of the opportunities and threats (Wilson & Gilligan, 2005).

Internal environmental scan

Strengths

• Strong vision of end state: The Company has a firm vision of the end state goals that

are to be achieved in future. This makes the attainment easy and this in turn helps the

accomplishment of the overall objectives of the firm.

• Information technology: The developments in technology have facilitated the

employees to derive the critical customer, order and financial information by using

some simple keystrokes.

• The company has an established infrastructure and a dedicated workforce who works

for the benefit of the organization.

Weaknesses
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• Lack of distribution of power: The structure of the company is such that it is not

properly decentralized; most of the authority and power is not distributed among the

members - employees and the managers.

• Lack of industry knowledge: KFF lacks the knowledge of the industry which is

extremely important to frame its strategies and face the competition adequately.

External environmental scan

Opportunities

• There is an opportunity to develop an exclusive position in organic catering. This

opportunity is consistent with growth strategy of KFF and it will enhance the

revenues of the company.

• It can explore the opportunity to grow the business in international markets and

increase its market share in the grocery food industry.

Threats

• The company faces the challenge of competition and the use of enhanced technology

by the other companies catering in this sector.

• Also, there is a potential lack of interest in the area of product offering. The company

needs to go in for new product development and product modification to cope up with

the competition.

Recommended Strategy

Strategy concerns to plan formulation and actions taken to empower an organization to

carry out its intended objective effectively. To effectively determine a strategic plan for growth

in such a explosive business environment, the company must understand how the various
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strategy like cost differentiation, cost leadership, stability & growth strategy, etc. function in the

industry and regard the specific situation of the company.

To effectively confront the critical issues, the recommended best strategy for Kudler is

the Combination strategy. In this strategy, the company merge product differentiation strategy

with a market segmentation strategy is an efficacious way, so that it will be easy to equating

product strategy (supply side) to the dimensions of the business systems target market segments

(demand side).

With this strategy, it will be easy for Kudler Fine Food to fruitfully evaluate the foodstuff

demands & supply and align its output plan consequently. With the product differentiation

strategy, Kudler Fine Food Company easily make out its product image profitably and minifying

competitive rivalry. Thus, it is concluded that only effective strategy makes an organization

enable to cope with business requirements and attain predefined targets.

Work breakdown Structure:

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Level 1 Level 2 Level 3

(Objective) (Functional tactics) (Action items)

In local market – become no. 1

grocery food store
Expansion
In Global market

New product development

developing more healthy,
Diversification fresh and nutritious food
Modification in existing
products

Growth – To Increase production process

achieve 15% Cost leadership
sales growth Use of new techniques and skilled labor
– enhanced IT and qualified personnel

Create brand image

Product differntiation
Use of different features
and design
Combination strategy
Market segmentation

Product differentiation
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Key success factors

To efficaciously implement the plan, the following are the key success factors that must

be considered planning system, time, roadmap, environmental characteristics, strategic

continuum, control, etc. With the proper planning system and road map, we can systematically

implement project tasks in the right way with effective manner. Thus, it is concluded that at the

time of plan implementation, the company should consider each and every aspect related to the

strategic plan.

Cash Budget:

Through making the cash budget, the financial analysis of the expenditure can be done

efficiently. With this budget, Kudler Fine Food easily ascertains excess and shortage of cash at

any time. In this cash budget, following are the major financial items that affect the propagation

of cash flows (Shim & Siegel, 2000).Such items are Sales and Cash Collections (Cash inflows)

and Purchases, Wages & salaries paid, Rent, Depreciation, etc. (Cash Outlfows). In the Cash

Budget design, the following are the assumptions taken such as sales is assumed to increase by

15% every month, 85% of sales is collected in next month, purchases cost is considered 60% of

sales revenue and paid in same month and total wages to management is 222000 yearly, which is

equally distributed monthly.

Forecasted Financials:

Forecasted Financials would facilitate the company to know about its financial performance over

the last years. With the forecasted Income statement, it will be easy to know its expected net

income in the future. On the other side, projected balance sheet reflects its entire future financial

performance and nature of the business (Shim & Siegel, 2000).The forecasted financials of

Kudler Fine Food are shown below:

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Budgeted Income Statement

Sales $2,001,115
Cost of Goods Sold $1,200,669
Gross profit $800,446
Wages and salaries $222,000
Advertising $60,000
R&D $30,000
Rent $24,000 $336,000
Net income $464,446

Budgeted Balance Sheet

Cash $324,583 Accounts payable $192,609
Accounts receivable $272,863 Accumlated depreciation $36,000
Inventory $5,000 Long term loan(Bal.figure) $59,391
Fixed assets, net $150,000 Net income $464,446
Total assets $752,446 Total Liabilities $752,446

Risk Management Plan

Risk Management Plan is defined as a plan document that anticipates unexpected risks

and to formulate the response plans in order to minify risk. The risk appraisal matrix is a vital

part of this management plan. With this plan, it will be easy to key out, evaluate and prioritize

the risks through unified and efficient application of resources in order dilute, scrutinize and

control the impact of inauspicious consequences (Portny, 2006). To cope with the critical risks,

the Kudler Fine Food should follow the following risk management plan. Such risk management

plan includes:

• Identification of risk: This is the first and foremost step in the risk management plan.

In this step, organization identifies all the risks associated with project. The following

are the risks faced by KFF include lack of a management team and poor planning.

• Analysis of alternatives: This is another important step in which we key out the

various alternatives to solve out the various risks. The various alternatives are

implementing good strategic plan, develop appraisal and planning system.

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• Implement strategies: In this step, we will choose best alternative that ultimately

proves to be beneficial for the organization to cope up with the contingencies. A good

strategic plan is the best alternative that furnishes the information regarding the

different elements of the strategic management.

• Corrective actions or feedback: In this step, we will assess the actual and standard

results in order to key out the difference, so that it will be easy to take corrective

actions accordingly.

Thus, it is concluded that through applying this risk plan, the management can easily monitor

and control risks in the effective way and also increase the chances of achieving success.

Cover Letter

February 12, 2010

Board of Directors
Kudler Fine Foods

Dear Sir/Madam,

I would like to share my thoughts regarding strategic plan. Kudler’s strategic planning is an

effective way that facilitates in attaining objectives. The strategic planning renders the

information related to the varying strategic management elements. In addition to this, this

planning also furnishes the manner in which the company and its strategists propose to put the

strategies into action. The company's vision, mission and value statement entirely depends on the

strategic planning. In keeping the plan current, Kudler Fine Food may incorporate this thinking

through properly coordinating all its statements with strategy. In addition to this, company

should keep in mind the time frame in the formulation of their strategic plan.

Regards,

Your name
 Kudler’s Strategic Planning 11

Bibliography

Portny, S.E. (2006). Project management for dummies. (2nd ed.).

For Dummies.

Ryall, M. J. & Craig, J. C. (2003). Strategic Management Kogan Page Publishers.

Shim, J. K. & Siegel, J. G. (2000). Financial Management (2nd ed.). Barron's Educational Series.

Wilson, R. M. S. & Gilligan, C. (2005). Strategic Marketing Management: Planning,

Implementation and Control (3rd ed.). Butterworth-Heinemann.