Business Overview
Kudler fine foods vision commits to the need of providing quality services to customers, with customers taking the first priority in its activities. Kudler fine foods operate mainly in San Diego with shops in California and many other places in the United States of America (Phoenix, 2010). The business endeavors to be the premier food outlet for the people in the area in search of cheese, meat, and other foods all under one roof. The business has three shops in the state of California and considers their activities as free from direct competition. However, the need for competitiveness in the market is constantly increasing, affirming the need of establishing a market structure best suited for the business. The paper analyzes information about the business that helps differentiate the business structures adopted by a business to increase competitiveness in the market.
Strengths and weaknesses
Customer surveys indicate that the shopping environment is the single greatest strength for the Kudler fine foods. In fact, 80 % of the respondents agree that the shopping environment gives the business a competitive edge in the market and towers them above the rest (Phoenix, 2010). Notably, the shopping hours are convenient, the decorations appealing to the customers and the services executive. Most of the customers are thrilled by the professionalism of the services at the stores. A significant weakness identifying by the customer survey includes the pricing of products. Most of the respondents agreed that the products supplied justify the value of their money; however, a good number of them argued that the pricing was too high for them to afford.
Market structures
Depending on the view that a person has on the market, the Kudler market is viewed as either a monopoly market structure, a monopolistic market structure, or an oligopoly market structure. According to the strategic plan by the organization, the gourmet food shop was the only outlet with the food package and range in southern California. This makes the business a monopoly as it is a single business with a wide range of products serving many customers. However, the strategic plan also indicates other stores that offer some of food including Real-world films and Harvest ranch markets. As a monopoly, the Kudler fine foods offer a huge package of foods for the customers. This provides a sole solution to the customers who want to get the full package.
However, the fact that many stores can sell parts of the product changes the market template for the business. The market is largely defined with the specialty and organic food stores, with the wine stores coming up as a compliment. At the same time, because the market can have more stores, it turns to be oligopolistic in the sense that the number of businesses increase. In reference to the strategic plan, the organization intends to expand and cover the entire southern California (Phoenix, 2010). This would make the business large enough to challenge competition from the other food stores. At the same time, the food stores will utilize e-commerce, which would turn it into a monopolistic competition market structure. The market for the food store is mostly concentrated in the Southern part of California due to high demand for fresh foods. The pricing of the products also makes the business oligopolistic market structure in nature. The market structure in the business largely depends on the view of the people although the facts are also dependent on the pricing and competition.
The different market structures have different characteristics and apply to different organizations. However, some organizations like the Kudler fine foods apply more than one market structure in their operations. A distinction of the different market structures is provided below.
Differentiating Between Market Structures Table
According to the expansion intentions of the food stores and the pricing policy, the best market structure for the business is an oligopoly market structure. This is because this structure offers the business the opportunity for setting its own prices, while the elasticity characterizing it can allow the sole expansion of the business. The Kudler fine food store also values itself as the sole organization providing the food packages that it does in the entire South California. This also makes the oligopolistic market structure the best for the business, as it will enhance the operation of the business as an entire entity free of competition. The market structure will however affect the firm negatively in the sense that elasticity will lead to price discrimination, which will keep off competition. This will affect the quality of the products, which may lead to loss of customers.
Competitive strategies
Kudler fine foods believe that they operate as a monopoly and that no other organization in south California offers the product packages as they do. However, this was supported by only 40 % of the survey carried out on the food store in 2010. The customers believed that some of the foods were overpriced while others believed that they got value for their money by buying the foods. In terms of pricing, Kudler may consider the views of the customers as they business should not risk losing them (Colander, 2010). In this context, the business may consider lowering the prices for its supplies to attract more customers.
Most of the products that the business deals in are fast foods with quick shelf lives. This means that the products require effective inventory control strategies in order to avoid the risk of merchandise errors (Colander, 2010). Kudler may consider historic inventory control strategies and merchandise management in order to deal with the inventory control for most of the products. The strategic plan for the business indicates that the business focuses more of improving the cooking and dining experience for the customers. For this group of customers, interaction is important and the experience acquired through customer interaction helps the business in a great way. Kudler must develop systems that will improve the customer interactions in order to enhance the experience of the customers while they enjoy the services.
Recommendations
In consideration to the realistic nature of the results of the survey on customers in 2010, Kudler should continually engage the customers in decision making regarding the products from the business. This will improve the strategic face of the business. Kudler should also improve the technology levels in order to attract more people and make service delivery easier. Strategic utilization of the technology will foster delivery of quality service at relatively reduced cost. This will increase the operation cost especially because of the cost of maintaining the technology. However, the strategy will eventually result to increase market for the company’s products. In terms of pricing, Kudler should lower the prices in order to appeal more to the customers. The other alternative is calls for the business to improve the quality of the foods to make the customers see the value in them. Kudler should also improve the position of the business in the market by viewing it as an oligopoly rather than a monopoly, which will influence both quality and pricing.
Conclusion
Kudler fine foods Virtual organization is food store operating mainly in San Diego and owning shops in South California. The main strategic vision of the company is to expand and tap the completely southern region of California. The main strengths of the business lie in the high quality of the foods and services offered and the good view of the food stores. However, some of the customers discredit the business based on the pricing, as they feel that the prices do justify the value of the products offered. The business can be classified as a monopoly, oligopoly, or monopolistic structure depending on the point of view. Strategically, the business should lower the prices, improve technology, and boost quality in order to retain customers.
References
Colander, D. C. (2010). Economics (8th ed.). New York, NY: McGraw-Hill.
Phoenix. (2010). Kudler Fine Food Virtual Organization. Retrieved from University of Phoenix, Simulation, ECO/365- Principles of Microeconomics
