Kudler_Fine_Foods_–_Problem_Statement

Kudler fine foods – problem statement In 1998 Kathy Kudler opened her own gourmet food store and her dream became true. She came to this idea, when she found that her neighborhood did not have a wide selection of products to satisfy her passion for gourmet foods. The vision of Kudler Fine Foods (KFF) is to become “the premiere gourmet store for those savvy shoppers who are searching for the finest meats, produce, cheeses, and wine”. The first store is opened in La Jolla, California. Two years later Kathy Kudler opened a second store in Del Mar, Ca. and in early 2003, as part of her expansion plan, she opened a third one in Encinitas. The strong factors backing KFF to remain stable in this present economic situation are as follows: specialty product line, repeat customers, good cash flow, rapid growth, small organization, no outside investors While the stores continue to grow and produce enough cash flow, Kathy Kudler thinks to expand her gourmet food chain as well as the services and the product line. But the declining economy and certain issues that holing its potential growth can be critical for KFF. Adding more stores and products to already existing requires critical thinking, in order to determine the right course of action. While it may have the above strengths, Kudler Fine Foods does not display the same excellence in planning, financial control and human resources. Some of the issues that can be identified in KFF strategic plan are: dealing with perishable goods, high payroll costs, lack of financial understanding, potential competition, small management team with lots of responsibilities and need of qualified people for special positions. But the largest issue that this paper will focus is the lack of delegation of duties and the human resource management provided by the company president. “Today the job of human resource management has taken on an entirely new role in the firm. In the future it may become the most critical function, in that it will be responsible for dealing with all aspects of a business’s most critical resource—people.” Kudler Fine Foods has no direct competition but is still losing market share to other departmental stores because of constant growth in there specialty food division. In order to remain competitive in the field, KFF has to pay special attention to customer’s needs and expectations, and to continue the improvement of the customer service, because this is the main factor that differentiates KFF from their competitors As the KFF organization continues to grow the management structure has remained the same. Kathy is the primary operations manager for the entire organization. She currently works seven days per week. While she has hired a store manager and assistant manager for each location, she still oversees many of the purchasing functions and inventory tracking for all three store locations. To have a small management team can be strength for an organization, because it is easy to be supervised, but can be considered as a weakness in KFF’s case. “When Kathy is sick or on vacation, no one is able to order replacement inventory or deal with major business issues”. If this happens, the result can be short-supply which will affect the customer satisfaction. She also does the accounts payable and receivables and deals with all the suppliers and banks, and if she has to take any extended time off that can lead to delay in the payments and bad financial terms. KFF “is positioned to attract a more narrowly focused customer. KFF appeals to the person who sees themselves as a discriminating gourmet. Such people are looking for more than organic foodstuffs”. They want the best foods and excellent customer service. KFF offers mainly perishable goods without preservatives, and in order to be sure that her customers will receive high-quality products, Kathy does a lot of the restocking herself. She has hired ‘some part-time students to help her with stocking the shelves’ but this will be insufficiently to keep the shelves well-stocked with fresh product, when she expands the product line. While being the sole owner of a company, Kathy “spend much of her time is spend doing back-office work’. This keeps her away from the customers and “so the staff members are really the ones having the day-to-day contact with the customers”. Kathy encourages the clerks to take very good care of the customers, but often the work environment is stressful because of lack of staff. KFF strives to provide excellent customer service and to be very customer oriented, for this reason the staff is critical for the operation. KFF’ staff consists of special position as butchers, bakers, wine steward and it is difficult to find qualified people for these positions because the company pays a little bit below average. For this reason Kathy has to be sure that her staff is motivated and the work environment is as friendly as possible. The expansion of KFF, require new approaches by management to guarantee successful outcomes. KFF have to create management strategies and techniques to continue developing good customer relationship and meeting their expectations and needs, support growth, and increase profits. This will allow the organization to meet or exceed standards. The first step has to be implementing a technology that will automate the manual inventory and ordering system. The new software will help to improve and maintain a zero stock-out, increase the productivity, track sells and purchases, and monitoring the inventory. This change will allow Kathy to reduce the time spent on manual processes, and focus on the core values of the company - interacting with customer and employees The next important step for Kathy Kudler is to create a management team to operate effectively by allowing team members to develop and improve skills in their specialty area. At this stage, she has not allowed herself to place the trust and responsibility of performing daily duties into the hands of the team members. In order to build a successful team she has to encourage the members to share. The trust, between the team members is a key factor to keep the team together and have it work toward achieving goals in the most effective and efficient way. The trust improves the motivation and also removes the emotional and interpersonal obstacles among the team members. Other key factor to keep the team motivate is to establish a programs for rewarding and training. Rewarding programs as “Associate of the month” and “Associate of the year” will help to keep the employees satisfied. By training them and promote within the company, there is less likely to be such high turnover. These are some of the steps that Kathy Kudler has to take before the next expansion. If she forms a team with the right people and gives them the right roles and responsibilities, she will not have to worry for her existing business, and she will be able to focus on the nest stage – adding more stores, products and services.