Managment View

Kudler Fine Foods is an upscale specialty food store located in the San Diego metropolitan area. The founder, Kathy Kudler, opened the first store on June 18, 1998 and within nine months the store was at break-even and was profitable for the year. In 2000, a second store was opened in Del Mar and in 2003 the third shop opened in Encinitas. (Kudler Fine Foods virtual organization)

The primary functions of the stores management:

1- Planning and strategizing to Increase Loyalty and Profitability of Consumers by:

Expanding services. (Revenue Increase) the firm developed a customer-training program in the stores to show customers how to prepare specialty foods, and to be invited to exclusive upscale events.

Frequent Shopper Program. (Revenue Increase) by using their customers’ database to evaluate the purchase behavior at the individual customer level and providing high value incentives through a partnership with a loyalty points program.

Increased Efficiency. (Cost Reduction) by focusing on internal processes to deliver an increased value to the customer. In addition, the firm is developing employee training

programs and integrating new software systems to facilitate the effort. From the marketing prospective the firm has encouraged the purchasing department to develop ways to reduce

costs of ordering foods and minimize the amount of food to be stored, while also having a zero stock out policy. (Gomez & Mejia, 2002, pg. 5)

2- Leading, Organizing and controlling:

As any standard business Kudler Fine Food consist of (finance and accounting department, sales and marketing department, human resources department, Operations department, legal department, and information technology department.) to manage effectively the company’s business activities and operations. In the other hand each of the three stores contain of five departments:

• Bakery

• Meat and Seafood

• Produce

• Cheese and Diary

• Wine

Each of the stores departments’ managers has a certain responsibilities to manage (Organizing and controlling) the stores activities:

Purchasing:

Each of the department managers is responsible for the purchasing of the needed supply according to the items their departments sells, and obtaining the best price, quality, and delivery possible. In addition they are responsible of recording and verifying the orders

and sent the forms to the Accounting to pay the suppliers. Kathy also places purchase orders. Kathy’s purchases relate mostly to unique, capital, or repair items that might be required by an individual store or for items used by all three stores, such as bulk Purchase Orders or Receiving forms. (Kudler Fine Foods virtual organization)

Advertising:

Kathy is responsible of preparing the advertisements for local newspapers, and that after coordinating the items on sale with the store managers during the weekly operations review meetings to make sure adequate supplies of merchandise will be on hand.

Accounting:

Sales terminals collect the Accounting data at the checkout to record all items, quantities, prices, taxes and totals for all daily sales transactions.

Inventory Management:

The department managers are responsible for maintaining high customer service levels for the items they sell, which means carrying higher levels of inventory but not excessive

service levels. The company’s policy is that adequate levels of inventory should be maintained to assure that stock-outs do not occur more than 2-3 times a year. A customer

service level of 95% has been a general goal for a number of items carried, which mean only 5% of the time there will be no merchandise due to a previous stock-out. (Kudler Fine Foods virtual organization)

Forecasting:

Kathy and her department managers use historical data on which items and what quantities were sold in the last 2-3 years, especially on holidays. This provides an indication of which items and what quantities to carry in the future. Forecasts are basically an extrapolation of past history to the future.

Merchandise Selection and Pricing:

This activity consider one of the key responsibility for Kathy, and that is identifying new customers demands by monitoring what other gourmet foods stores are offering, what’s being advertised in gourmet magazines, what is being shown at gourmet conventions, and what shows up on gourmet Web sites.

After finding some new and interesting items, Kathy usually obtains a small amount of each item and introduces them at one of her operations review meetings. In the operations review meetings The managers get to sample the new items and to offer their comments, suggestions and recommendations on whether to offer the items or not. In addition Kathy

is responsible to determine what current selling prices for the items are, then she and her staff discuss if and when merchandise prices should be changed and by how much. . (Kudler Fine Foods virtual organization)

How Kudler utilizes the information technology and the Internet:

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