Channel strategy for Kudler Fine Foods in Korea and Australia

¶ … Channel Strategy for Kudler Fine Foods

Who are the major legal entities?

In Korea the major legal entities are: the State Council; the Ministry for Food, Agriculture, Forestry and Fisheries; Ministry of Environment; along with the Ministry of Foreign Affairs and Trade. In Australia the major legal bodies are: the Executive Council, Ministry for Agriculture, Fisheries and Forestry and Minister of Trade. ("Politics in Korea," 2010)

How might they influence organizational choices?

They would influence organizational choices by having an impact upon: determining what kinds of foods are distributed throughout Korea, the overall costs for these foods and how the company will operate internally. For Australia this would have an impact on: how much of particular item is exported, the overall costs (duty / tariffs), the length of time that the product will have to sit in customs clearance areas and how quickly the merchandise can be sent to the different retail locations throughout the country. ("Fact Sheet on Australian Government," 2011)

How might the organization use these factors to avoid risk?

To avoid risk the company would need to create a pricing strategy that would address specific challenges being faced. Where, the domestic consumption in Korea could be influenced by these different factors, as they will have an impact upon prices. This will have a ripple effect on sales, as consumers will become more cautious about how much they are spending at the different locations. As a result, the company could develop a strategy by focusing on what particular products are: popular with consumers and through seeking out a way to purchase these goods from domestic producers. They could also use various free trade agreements to import products that are in demand with customers. This would give Kudler Fine Foods a domestic pricing strategy that will address the most basic needs of consumers (through the domestically manufactured goods that are sold). At the same time, the imported merchandise (through free trade agreements) will give the company a viable option of offering competitive products. When you put these different elements together, this means that Kudler Fine Foods will be able to address the challenges of rising prices, by offering a wide range of foods to consumers.

These environmental factors would have an effect upon the organizational choices that are made. As they could have an impact upon domestic spending in Korea, which could cause some of the higher priced items to see lower sales. As a result, the actions from the different governmental entities and the policies that they are using will have a direct effect upon how quickly the business is able to grow in Korea.

Internationally the company would need to develop a specific strategy that will address changes in: trade barriers and increases in fuel prices. This is significant, because importing any kind of merchandise into Australia could be subject to: one or both of these different variables. Once this takes place, it means that demand will decrease, as consumers will seek alternative products. In this case, Kudler Fine Foods could use a pricing strategy that will look for those items that are in demand from a host of different countries. This would increase the number of products that were being sold and there will be various price ranges. At the same time, the company needs to focus on offsetting the increase in fuel prices. One way that this could be accomplished is through purchasing calls on West Texas Light Sweet Crude oil futures. In this case, the company would be using a hedging strategy to help offset any kind of negative impact from rising prices. This is similar strategy that has been used by Southwest Airlines to protect them against sharp increases in costs. ("Hedging on Fuel Pays Off," 2008)

As far as the various environmental factors are concerned, it is clear that the government's policies will have a direct impact upon the costs of importing various products into the country. This is challenging, because it means that the different regulations could apply to a host of products (through varying trade barriers). At which point, it could cause the underlying costs to become more volatile, which would have an impact upon the bottom line. There is also the influence that government policies will have upon domestic spending. As this will cause consumer spending to become volatile (depending upon the policy). This has an effect on the choices of the organization, as they are forced to use different approaches when tackling the underlying problem.