Kudler

                  Tomarkio Burden Kudler Fine Foods Case Analysis MGT 521 Arthur Willner 5-3-2010                         Kudler Fine Foods is a premier gourmet grocery store that has been in business for a while now and with the first location, being a success Kathy the storeowner is in the process of expanding her business. She has been facing several issues with making the process a complete success. In this paper I will define the problems and suggest actions that might have remedy these problems and consider which one problems’ action is the best solution for Kudler Fine Foods. What I consider one of the main problems at Kudler Fine Foods is that Kathy's’ current approach to management is being the only manager with the most important task. Along with this problem, other problems follow such as the high payrolls of the specialty positions that can be hard to find replacements. In addition, the small management team with many responsibilities and the Delmar location that is not doing so well. Kathy is also expanding her business to fast and in return causing her to have high expenses and low profits (University of Phoenix, 2003, pp. 1-23). Kudler Fine Foods problem lies in Kathy being the only person able to order replacement inventory or deal with major business issues. This keeps her from expanding into other areas that could be more profitable than the areas that she already chosen. Currently she travels from store to store to control, monitor, finalize the weekly inventory list, and order products. With Kathy being the only person over the ordering this takes time away from her interacting with customers because she's spending all of her time in the back doing back office work as well as in the stores running the cash register, and stocking shelves. With all the tasks and responsibility, which Kathy has, puts a greater risk on to her health (University of Phoenix, 2003, pp. 1-23). Although Kathy's’ health is in good condition at the current time, there is a possibility that something can happen to her. With Kathy, being the only top management with the major responsibilities will leave the company to fail if something were ever to happen to her. This problem handicaps her business because she hires and fires, finalizes the inventory numbers, and controls financing making sure all vendors are paid. Kathy and no one else can take care of these tasks because of her wanting to have control and hands-on her business, which is not always a good idea. This keeps her from expanding farther out as she plans to do because it is an inconvenience for her to travel between the different grocery stores, which she currently does and this is one of her weaknesses that she is aware of (University of Phoenix, 2003, pp. 1-23). Another problem of Kudler Fine Foods is the high payroll of the specialty positions. These are the higher paid positions at Kudler Fine Foods. Along with the high paid positions finding qualified people for these positions are hard to come by. According to there, 2003 income statement wages accounted for $933,917, which is 37% of total expenses (University of Phoenix, 2003, pp. 9). Another issue with Kudler Fine Foods is that at the rate of the current expansion is causing high expenses and low profits, the Delmar Store is a prime example, and why it is just breaking even with it profits. According to the income statement her expenses total $2,520,228 and her gross income was $3,831,082 that is very low for operating three stores in and one that is about to open (University of Phoenix, 2003, pp. 19). In addition, to growing at a fast rate failing to have her store available online is a major problem that her competitors are already on top of although she has plans for this its not until the future as stated in her growth plans (University of Phoenix, 2003, pp. 1-23). Another problem with Kudler Fine Foods is small management teams with many of responsibilities. Not one of her store managers or assistant managers can handle major business issues they only handle the day-to-day details. The last problem at Kudler Fine Foods is the high turnover rate of the perishable foods. 12% of the perishable goods are rotated out of inventory every two to three days by throwing away or by donating, and this happens on an ongoing basis. Although this is a weakness, it is not’t a significant risk to them according to the 2003 income statement charitable donations accounts for $10,975 that includes the perishable items, which seems to be a large amount of money being wasted, but for a good cause, and that’s not including the items that are being thrown away (University of Phoenix, 2003, pp. 19). Some actions that might have remedy the approach to the main problem of Kathy’s current management approach are for her to play a less hands-on role in her expanding operation. Kathy should start delegating responsibilities that she currently handles to others and be open to new ways of doing things. Kathy has recognized that this is an opportunity to bring in outside management to help run the operation (University of Phoenix, 2003, pp. 1-23). Another problem that I stated was the high turnover rate of the perishable an action that might have remedy this problem is to create a formal inventory system that includes specific ordering policies and formalized inventory record file, which can be difficult (University of Phoenix, 2003, pp. 1-23). To make this process easier, it should lead into computerization of the inventory management, she would need to hire qualified personnel to help in this project. If Kathy were to set an inventory strategy, then she might not waste as much perishable items as she has been and result in fewer errors from the manual process that she currently uses. Inventory management is a key factor in running a successful long lasting operation. In result of computerization of the inventory, management can help in competition with other businesses in the area. The action that I consider the best is for Kathy to play a less hands-on role in her expanding operation. I think that this is the best option because she will be able to handle other responsibilities that she's not able to do because ordering new inventory and dealing with major business issues takes up to much of her time. She can delegate responsibility to someone else whom she trusts to do her job. She can focus on other core values of Kudler Fine Foods, handle other issues such as the Delmar location, and figure out other ideas on how to make it a success in the meantime before she combines the Delmar location with the new location. Then if she accomplishes that she can then interact with customers which she enjoys doing. At her fast rate of growth, she needs to put her trust in to other people to help with her expansion and important operations in her business if she wants to keep believing the benefits of success and keep doing what she started. If Kathy structures her business and delegate responsibilities to trustworthy people within different departments, which entail a human resources to handle hiring and firing, a finance department to handle all of the financial aspects such as payroll, accounts payable, creating, and monitoring the budget, etc. Marketing department who is in charge of monitoring the website once it is created and handling all of Kudler Fine Foods advertising to drive more business outside of the area. Operations department to handle the day-to-day operations of each store, which include the store managers and the involvement in employee morale and customer satisfaction. Creating such an infrastructure will allow Kudler Fine Foods to operate more efficiently and expand to expectations that Kathy holds the company.     Reference University of Phoenix. (2003). Kudler Fine Foods Strategic Plan. Retrieved from University of Phoenix, MGT521-Management website.