Kudler

Kudlers Fine Foods stated that their best advantage is that they are not in direct competition with traditional markets, yet their desire to expand their product line to include gourmet coffee, tea , as well as establishing a fish counter and deli in their stores will lead to a collision course with those industries well established companies, that will in turn be detrimental to the growth of Kudlers Fine Foods. Entering the gourmet coffee and tea business, Kudler will be running smack into the gourmet coffee’s business giant Starbucks coffee. With hundred of stores located all over, Starbucks coffee holds a dominant control over the gourmet coffee and tea industry and has a no known closest rival. If established companies that sell gourmet coffee both in store as well as online like Gevalia, Seattle Best, The Tea Leaf or Dunkin Donut have not made a dent in Starbucks’ hold in the industry how much more will a startup company like Kudler fare and that’s only at the top end of the ladder. Kudler will still have to contend with the likes of Mcdonalds at the bottom of ladder. Mcdonalds, who is being viewed as a potential threat to Starbucks; has recently entered the gourmet coffee business by offering cheaper gourmet coffees to rival Starbucks expensive lattes. The same issue also faces Kudler with regards to the fish counter. There are so many fish markets scattered all over San Diego from the high end ‘The Fish Market’ to the most common Seafood City markets and 99 Ranch markets. Seafood City Supermarket alone has 4 stores located in San Diego and nine in the Los Angeles area . A fish is a fish, there is no such thing as a gourmet fish. People will not go out of their way just to buy fish. Price and convenience are what the people wants especially in this time of economic downturn, which leads us to the final expansion idea of Kudler. Considering that large supermarket chains like Vons, Ralphs and Albertsons have deli counters offering all kinds of food from trendy gourmet organic food to your daily ordinary everyday meal, I don’t see any value in adding a deli counter in Kudlers Fine Food stores. Kudler should stick to their original goal of offering high end hard to find gourmet food where competition is minimal. Instead of expanding their product line they should be concentrating more on marketing their store and the products they are offering. If Kudler still wants to expand into these areas, a better way to get in is to reach a partnering agreement with the more established companies. For example Kudler can sell Starbucks coffee in their stores and Starbucks will sell Kudlers’ products in their stores. A win-win situation for Kudler since it will be able to establish a foothold in the gourmet coffee business at the same time by offering their products in Starbucks stores Kudler will be benefitting from the large marketing reach of Starbucks.