Problem Statement for Kudler Fine Foods 2

Problem Statement for Kudler Fine Foods 2

  • Submitted By: bobena
  • Date Submitted: 03/07/2011 2:00 PM
  • Category: Business
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Problem Statement for Kudler Fine Foods
MGT/521
February 28, 2011
Lee Melancon

Problem Statement for Kudler Fine Foods
Kudler Fine Foods, like many small businesses, has several issues that some may consider insurmountable. The owner, Kathy Kudler, dreams of expanding beyond her three current stores to become a national chain, but right now each of her stores relies on her too heavily to allow this to happen. In order to solve the company’s current issues and fulfill her goals as a business owner, Ms. Kudler needs to restructure how the business is managed.
Kudler Fine Foods, a gourmet grocery store located in California, is facing several issues at the current time. The Del Mar location is not currently financially solvent. Inventory turnover rate for perishable goods in all three stores is very high at 12%, which decreases profitability of the business. The amount of marketing is very light and does not take into account advertising during the slower times of the year. Finally, the business is entirely dependent upon Kudler herself, which could create an issue if anything were to happen to her.
The Del Mar store was opened a mere two years after the original store in La Jolla. The success of the original store prompted Kudler to begin fulfilling her dreams of expansion. Kudler’s own research shows that the Del Mar location had only 10% of the population of the original location, with a lower income level as well. While this decision has not hurt the business, it has not helped it either, as the location is only breaking even, and will close when the lease agreement expires. “In retail, it’s location, location, location” (2009) states Alderson in Marketplace, and goes on to remind business owners to think beyond expansion to what will happen if the new location doesn’t work. The commitment is more than to the business expanding, it is also to the city and employees of the new location, and closing a business will affect them all (Alderson,...

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