Growth Realization Alternatives Distinguishing one’s firm from the alternatives is a major concern for any business. Strategic analysis provides the starting point in the strategic management process organizations use to evaluate and choose the competitive advantages that distinguish them from other organizations within the market. Dominating businesses should also “choose among alternative grand strategies to guide the firm’s activities, particularly when they are trying to decide about broadening the scope of the firm’s activities beyond its core business (Robinson & Pearce, 2009). What Companies Must Consider to Realize Growth Firms must consider many strategies when attempting to realize growth. Depending upon the stage of evolution the business is experiencing these strategies can change. Robinson and Pearce (2009) discuss in detail these stages and strategy changes in Chapter 8 of Strategic Management: Formulation, Implementation, & Control.
Here, Kudler seems to be in the growth stage. The growth strategies “emphasize the strengths of brand recognition, product differentiation, and financial resources to support heavy marketing expenses and the effect on price competition (Robinson & Pearce, 2009). ” Team C offers three of the strategies in this stage to create a competitive advantage for Kudler. Functional AreaIntroductionGrowthMaturityDecline
Marketing Resource/skills to create widespread awareness and find acceptance from customers; advantageous access to distributorsAbility to establish brand recognition, find niche, reduce price, solidify strong distribution relations, and develop new channelsSkills in aggressively promoting products to new markets and holding existing markets; pricing flexibility; skills in differentiating products and holding customer loyaltyCost-effective means of efficient access to selected channels and markets; strong customer loyalty or dependence; strong company image Production operationsAbility to expand capacity effectively, limit number of designs, develop standardsAbility to add product variants, centralize production, or otherwise lower costs; ability to improve product quality; seasonal contracting capacityAbility to improve product and reduce costs; bility to share or reduce capacity; advantageous supplier relationships; subcontractingAbility to prune product line; cost advantage in production, location or distribution; simplified inventory control; subcontracting or long production runs FinanceResources to support high net cash overflow and initial losses; ability to use leverage effectivelyAbility to finance rapid expansion, to have net cash outflows but increasing profits; resources to support product improvementsAbility to generate and redistribute increasing net cash inflows; effective cost control systemsAbility to reuse or liquidate unneeded equipment; advantage in cost of facilities; control system accuracy; streamlined management control PersonnelFlexibility in staffing and training new management; existence of employees with key skills in new products or marketsExistence of an ability to add skilled personnel; motivated and loyal workforceAbility to cost-effectively, reduce workforce, increase efficiencyCapacity to reduce and reallocate personnel; cost advantage Engineering and research developmentAbility to make engineering changes, have technical bugs in product and process resolvedSkill in quality and new feature development; ability to start developing successor productAbility to reduce costs, develop variants, differentiate productsAbility to support other grown areas or to apply product to unique customer needs Key functional area and strategy focusEngineering: market penetrationSales: consumer loyalty; market shareProduction efficiency; successor productsFinance: maximum investment recovery Sources of Distinctive Competence at Different Stages of Industry Evolution (Robinson & Pearce, 2009) Personnel and Specialization Key perspectives in personnel strategy for growth include: flexibility in staffing and training new management; existence of employees with key skills in new products or markets, existence of an ability to add skilled personnel, ability to cost-effectively reduce workforce, and capacity to reduce and reallocate personnel (Robinson & Pearce, 2009). Kudler has the advantage of hiring and training highly skilled employees in specific specialized areas within the organization.
Highly skilled employees provide Kudler the advantage of training customers in the culinary areas. The bakery offers cooking classes to the customers, thereby offering specialized classes otherwise unavailable to the public. Kudler plans to expand these areas in the future, providing a multitude of specialized classes to its loyal customers. Offering cooking classes in many areas of the store makes customers more interested in shopping the store and learning new techniques in cooking healthy fares for their families. In addition to offering these classes, the employees are to be cross trained in many areas to provide a pleasant shopping experience for Kulder’s customers.
The customers will also be provided with brochures of the dishes they will learn in the store that will provide the recipe and food suggestions that will go with the main dishes taught in the class. This suggestive information has been proven effective in marketing strategies; therefore, Kudler will use this suggestive marketing technique to increase the buying desires of the customers. Key Functional Area and Strategy According to Robinson and Pearce (2009), a concentrated growth strategy builds upon a firm’s core competency and provides better market segment coverage and efficient use of store technology. Integrating Kudler’s new fully automated inventory system and developing an Internet sales channel is a recommended tactical growth strategy.
Expanding the website launch strategy, Kudler can integrate web conferencing at a minimal cost to extend the reach of their highly successful gourmet cooking classes. Linking a video conference provider to the opt in web page for gourmet cooking class, Kudler’s class scheduling and cooperative community college marketing exponentially extends consumer reach. Combining cost-effective text messaging access numbers with Kudler’s print, radio and catering brochures provides initial class information and builds repeated messaging capabilities into their growing database of customers. The website will provide easy opt- in class scheduling plus e-commerce access to gourmet products.
A first time buyer discount online to gourmet cooking class attendees is also redeemable at all store locations for perishable items. Post class online market surveys capture customer class satisfaction combined with a series of product and service related questions for extended product lines and local service insights. Kudler’s ability to communicate with customers in survey formats provides valuable market information for strategic and operational decisions. Engineering and Research and Development As stated by (Robinson & Pearce, 2009) “Market development allows firms to leverage some of their traditional strengths by identifying new uses for existing products and new demographically, psychographically, or geographically defined markets.
Frequently, changes in media selection, promotional appeals, and distribution signal the implementation of this strategy. A grand strategy of marketing present products, often with only cosmetic modification, to customers in related marketing areas. ” Kudler states they will special order anytime they are asked. Maybe they should display several of the items or offer mini-parties within the store to showcase to the customers how to prepare certain specialty foods. This will draw more consumers in who will enjoy the excitement of being trained with world-renowned chefs who are also local celebrities and other food experts. There may be a time that Kathy Kudler will be able to attend with an exclusive invitation to the customers.
The in store parties will give Kudler’s customers a chance to browse the store for other items in the store and not just attend the party. Another way of drawing in more customers is by having menus on display of different specialty foods and recipes that can be served for different occasions. The occasions could be birthday parties, weddings and baby showers, rehearsal dinners, open house, holiday gatherings, or bar mixers. This is a new avenue that will put life into “the party” that is Kudler Fine Foods. A Single Strategy Many of Kudler’s problems are internal. To create a strategy of growth and strategy Kathy must correct the internal problems. For this reason, Team C suggests a multi-faceted approach. All can be achieved during the same period.
An approach of adding and training employees, delegation of administrative duties, an approach to correcting and implementation of a website with a loyalty program, and offering party plans all can be implemented simultaneously. This multi-faceted approach will result in a complete facelift for Kudler and will position the company for future growth and sustainability in the market. Summary Kudler Fine Foods growth strategy centers upon product and Internet marketing, organizational development and an extension of customer education through gourmet cooking classes. As Kudler upgrades technology in every store, their operational ordering, and inventory efficiencies will increase net revenues. Department manager collaboration and combined store ordering will relieve Kathy from store purchasing responsibilities to pursue strategic planning and business expansion.