The organic nature of the products that the company offers all seems to have a detrimental effect on profitability. Kudler may have to eliminate certain product offerings. This is particularly true if these products are not selling very well. In addition, the owner of the company may have some success in negotiating a lower price for those products that do sell well. The owner should be careful not to settle for whatever price she is quoted.
Another issue is payroll expense. All companies have problems with getting payroll expenses to a reasonable level. However. Kudler seems to have a problem in being able to pay highly specialized workers at the rate of the market. In addition, when on the specialized workers gets sick or quits it is difficult to find a replacement. Some of this will be remedied when the aforementioned problems are handled because it will create greater cash flow. The company must ensure that it can pay workers what they are worth. Failure to do so can be catastrophic and provide other stores in the industry with a competitive advantage. In addition, when employees are paid a living wage they are more productive because they are not worrying about their expenses or working a second job.
Another problem is the desire to expand further away from the current base of operations. Although the store already has several locations, these locations are relatively close to one another. As such Kathy is able...
In some instances she visits all three on the same day. However, if she plans to expand the company into other regions of California her current management approach must be abandoned and she must hire and train a team of managers. Additionally Kudler must be extremely careful in vetting the next location. At the current time, the Del Mar location is doing quite poorly because it does not have the population to support that type of store. Kudler does not want to repeat the mistake that it has already made with the Del Mar location. With this understood, there must be a concerted effort made to carefully examine where the new store should be.
If all the aforementioned problems are addressed the company could run more efficiently and come closer to being the company that is presented in the vision for the company. Kathy must be willing to delegate some of the responsibility that she currently has. Ordering and examining the produce sold in stores was doable when the company only had one store. However, expansion brings about changes including changes associated with management practices. Additionally the company must stop wasting so much produce so that profits will increase. The company must also strive towards offering a competitive wage. If the company fails to address these problems it will not continue to be profitable. The expansion of a company is a serious undertaking and must be approached as such.
