Kudler Fine Foods How does the organization compete in the marketplace? What are the strengths and weaknesses of the firm?

Kudler Fine Foods Company is dedicated to providing quality products and services to its customers. It is unique in the manner in which it delivers its products and assortments to consumers. For instance, the company stocks highly valuable gourmet products that are highly demanded by consumers. These products are unique as they are rarely offered elsewhere by competing firms. In addition, the customer service component allows it to charge premium prices to consumers. The company supplies many of the ingredients needed to create a healthy gourmet meal. As such, consumers have access to more convenience as gourmet ingredients are only offered by a few suppliers within the market place. By offering a large assortment, and combining this offering with superior service, Kudler Fine Foods (KFF) is attracting consumer market share in a highly fragmented industry. Furthermore, by pursuing a niche strategy, KFF is attracting and obtaining a loyal following of consumers within the industry. Achieving high customer satisfaction was the main vision for Kathy Kudler, when the business was first established. At the present, Kudler Fine Foods has managed to set up three business locations with further prospects of expansion. This expansion is also accompanied by a robust online presence, offering many of the freshest gourmet products online. The symbiotic relationship between brick and mortar locations in combination with an online presence also allows to the company to further compete in the marketplace.

A strength of the firm, as noted earlier is its niche market business philosophy. The company does not appeal to every consumer but instead appeals to a very dedicated segment of the market. In addition, through superior customer service, the company is also better able to attract a loyal following of consumers that many of its competitors cannot replicate. An obvious weakness of the firm is its ability to attract capital to expand operations. As the company is still in its infancy, larger,...

In addition, macroeconomic concerns such as commodity prices and consumer sentiments will affect the manner in which KFF customers purchase gourmet ingredients.
Based on your learning, identify the market structure that you believe best applies to this organization. How does that market structure positively and negatively affect the firm?

Kudler Fine Foods operates in perfect competition markets. In the environment of perfect competition, there is the presence of several buyers and sellers. In addition, in condition of perfect competition, markets can offer products that can serve as substitutes to the product on hand. KFF mitigates some of the concerns associated with perfect competition due primarily to its niche appeal and loyal following. Consumers recognize value and are creatures of habit. By continuing to satisfy consumer needs with niche products, consumers will naturally gravitate to KFF as oppose to competitors. Importantly, perfect competition markets offer no barriers to entry into the market for new companies. This is particularly troublesome for KFF as it is relatively new to the industry. The more successful KFF becomes, the more likely competition will enter the market to erode company profits. This ultimately could lead to price wars that will be detrimental to the operations of KFF. For one, larger and often better financed competitors may simply lower prices to create an atmosphere in which KFF can not compete profitably. In other instances, competitors may offer large assortment combined with lower prices for similar products. In both instances the smaller KFF will have trouble competing effectively against larger, more established competitors. Consequently, in perfect competitive markets, price of products is determined by supply and demand. Currently there is high demand for KFF products and subsequently little supply. However, as KFF begins to make substantial profits, the supply portion of the equation will increase. As more supply enters the market, prices generally drop. KFF operates in perfect competition market…