Kff Strategy

This paper will assess how changes in technology have created business opportunities for Kudler Fine Foods, identify the generic strategy it should use and identify some tactics it should implement to realize the strategy. In addition, this paper will describe how KFF management can continuously scan the dine foods grocery industry for ideas that will allow it to update its strategy.

Introduction

The success of an organization is dependent upon the strategy that the organization has employed. Many have studied the effects of having a defined strategy in an organization and how it relates to the success of the company. In order for companies to keep employee morale high and to remain in competition in the business world, managers and leaders are required to examine the organizational strategy that exists within the company.

Information technologies can revolutionize how organizations do business. The two characteristics of this revolution are strategic information systems, and systems that support or provide for business reorganization. The first part deals with strategic information systems, which are primarily used to seize the opportunities created by technological innovations and changing market conditions. Such systems are also used to increase competitiveness and effectiveness by solving organizational problems and by smoothing operations. The second part deals with the need for organizations to fundamentally change how they are doing business, primarily in order to adjust to the changing business environment. Such changes also help organizations seize opportunities and solve major business problems as well.

Both types are unique in that the strategic, long range organizational impact of a magnitude can be much larger than that of operational and tactical/managerial systems. The magnitude can be so large that a failing system may force organizations to go out of business, whereas successful systems may place a company in a leading position in its industry.

Generic Strategy

KFF can use Porter’s Five Forces model to determine which generic strategy to pursue to stay ahead of their competition. These five major forces can endanger Kudler’s position in the gourmet food industry if the company does not focus on them. The forces consist of the threat of entry of new competitors, the bargaining power of suppliers, the bargaining power of customers, the threat of substitute products or services and the rivalry among existing firms in the industry (Turban, Rainer, & Potter, 2003, p. 7).

KFF is already using the intranet to record sales and inventory management and the internet to provide general information to customers. There are four major roles in information technology. The first being information technology creates applications that provides direct, strategic advantage to organizations. In addition, it allows efficient decentralization by providing high speed communication lines and it streamlines and shortens product design time with computer aided engineering tools. The third is that IT provides for technological innovations or acts as an enabler of innovation. Finally, it provides competitive intelligence by collecting and analyzing information about innovations, markets, competitors and environmental changes (Turban, Rainer, & Potter, p. 3).

KFF has to implement a “strategic information system” (SIS) in order to remain successful and competitive in the gourmet foods industry. An SIS will allow KFF to shape or support it’s competitive strategy to the point that it significantly changes the way it does business. KFF must not only focus outwardly at it’s direct competition, but inwardly as well by increasing employees’ productivity, improving teamwork, and enhancing communication. Another dimension to KFF’s SIS is strategic alliances with other companies where it shares an interorganizational system know as the extranet. This strategic alliance allows KFF to compete against other like companies. Information about the competition can mean the difference between winning and losing a business battle. Many companies continuously monitor the activities of their competitors. This is referred to as competitive intelligence (Turban, Tainer, & Potter, p. 3). Using competitive intelligence to collect and analyze information about innovations, markets, competitors, and environmental change provides a strategic advantage. Competitive intelligence also allows KFF to gather information on it’s competitors. KFF has to increase it’s market knowledge thru competitive intelligence which is known to drive business performance. One other method of competitive intelligence is industrial espionage, which can sometimes be unethical or illegal. This is when corporate spies are looking for marketing plans, cost analyses, new products/services, and strategic plans. KFF is able to observe the website of Dean and Deluca which offers a list of the products offered along with prices and gives the customers the ability to order them from it’s website. Dean & Deluca also provide customers with the opportunity to order catering services online and let customers track the status of their orders. An important detail that Dean and Deluca give customers is the ability to sign into the website under their own user name and password when ordering merchandise. KFF will be able to attract more consumers and expand their business by including some of these ideas on it’s website. KFF will need to benchmark other companies and evaluate their successes through the operational management they possess. Once this evaluation is done the strategy will be identified and enforced. The strategy that the company will attain is a differentiation strategy. KFF needs to be unique in the industry. By doing this they will need to provide high quality products at a competitive price. For example, with the small amount of fine foods grocers in the San Diego County area each customer is going to purchase all items at the store that can provide all services to them. KFF will need to implement a cooking class while customers shop in order to educate the customer on their products as well as different ways to cook. This will be essential to seasoned shoppers of fine foods. KFF’s organizational structure is based on the concept of vertical dimension. Vertical dimension is defined as the structure in which an organization indicates