Strategic Plan Update Part Three

Strategic Plan Part Three: Kudler Fine Foods

Alsontra Daniels, Joselyn Dzukey, Dennis Go, James Koursaris,

Walter Pohlmeyer and Liz Rudolph

STR/581

January 10, 2011

Carlos Flores Padilla

Strategic Plan Update Part Three 2

Strategic Plan Part Three: Kudler Fine Foods

When creating and introducing new products and services, innovation is key to grasp the

attention of the consumer. The key to successful innovation is the willingness to take the risk and

effectively manage the process to maximize the potential of the newly developed product. The

process will include establishing a solid implementation plan that includes objectives, functional

tactics, action items, milestones, task, resource allocation, and deadlines. An example of an

implementation plan, work breakdown structure, and GANNT chart will be included for

reference. In addition, a cash budget and forecast will be necessary along with understanding key

success factors, risk management and contingency planning. The new business line that will be a

focus for Kudler Fine Foods is cooking classes as part of its grand strategy for customer

intimacy.

To start the expansion of Kudler Fine Foods, focus should start with laying out the plan,

new business line for cooking classes, to expand the company. By expanding in this area, Kudler

can expand the company and create more brand appeal to the customers. Cooking classes is

another value add and supports the customer intimacy strategy with a goal of building strong

long lasting relationship with the client base. No doubt this will be a win-win relationships for all

parties involved.

Implementation Plan

Objectives Functional Tactics

• Establish a new business unit to provide
cooking class service
• Provide another value add to customers
• Increase revenue for KFF
• Build solid customer retention and loyalty
• Increase grocery sales by 5% first year,
7% next two years annually per current
store locations
• Human Resources to recruit and hire
• Marketing for market analysis and marketing
approach/strategy
• Accounting for prepare financial statements
and forecasting/budgeting
• Information Technology for system
enhancements / tools to manage business
• Production team to setup policies and
procedures
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• Sales team to establish targets and goals and

attract customers
• Vendor Management to work with suppliers
for optimal agreement (e.g.: price, products,
service)
Resource Allocation Milestones

• Cross functional team for implementation • Finalize Legal research and needs
• Project Manager • Finalize Accounting requirements
• Legal counsel • Finalize Organizational structure
• Accounting/Finance • Finalize Market analysis
• Information Technology • Finalize marketing strategy and approach
• Staff organization • Obtain inspection approvals
o Business owner for new unit • Setup classroom equipment/products
o Cook Specialists • Business requirements for system needs
o Schedule coordinator/planner • System development and testing
o Associates • Finalize sales plan
• Vendor Management and Suppliers • Train employees
• Launch new business line

Action Items Who

Conduct legal research on requirements for new business line (laws,
regulators, license requirements, inspections) Legal
Review and understand accounting requirements and needs Finance
Conduct market research and understand customer demands, competitive
position, products/services offered, pricing, and location opportunity Marketing
Prepare S.W.O.T. analysis Project Team
Identify organizational structure Project Team
Prepare objective and goals for cooking classes Project Team
Create, design, build and execute cooking classes Production
Identify system enhancements to support business needs Project Team
Identify marketing strategy and approach to promote new business line Marketing
Establish policy and procedures Production
Establish sales targets Sales
Identify supplies, equipment and products needed Production
Identify suppliers, terms and condition and contractual agreements Vendor Mgmt

Tasks and Deadlines # of Days

Identify a business owner 1
Identify a project team 2
Prepare a project charter 7
Prepare project plan and issues log 7
Prepare a financial expenditure request 14
Prepare a marketing overview of the business objectives 14
Prepare job descriptions for resources supporting new business unit 14
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Review accounting requirements 15

Conduct legal research 30
Obtain inspections and approval 30
Determine system needs to properly track and record activity 30
Identify building / location to conduct classes and hold inventory 30
Identify equipment needed 30
Identify products needed 30
Identify sales targets and goals 30
Prepare a marketing situation analysis detailing market conditions, demographics, 30
geographics, competitive information, challenges and opportunities
Process flow 30
Prepare a marketing strategy that includes how to support business opportunity 40
Draft business requirements 45
Incorporate needs into IT business requirements 45
Prepare a marketing tactics action plan on how to achieve strategy 45
Prepare forecast and budget goals 45
Review legal research and identify changes / needs 45
Stakeholder sign-off business requirements 50
Identify supplier(s) and establish partnership 60
Identify supplier(s) and establish partnership or leverage existing suppliers 60
IT system approach and design 60
Prepare marketing budget and timelines 60
Determine contract and fee needs and execute 75
Establish policies and procedures for sales and production teams 75
Incorporate legal requirements into establishment of policies and procedures 75
Receive Leadership and Finance approval for marketing budget 75
Recruiting efforts and hire team 75
Setup policies and procedures for accounting 75
Determine how to monitor success of new service 90
Incorporate new business line into financial statements for Kudler Fine Foods as a separate
income / expense stream 90
IT system development 90
Purchase equipment 90
Purchase products 90
IT smoke testing 100
Prepare forecasting and budget reporting 120
Conduct training for employees on policies, procedures and systems 120
Execute marketing plan 120
Implement controls and measures for service monitoring 120
Setup equipment and products in designated locations/buildings 120
Setup re-order process for products 120
Business user acceptance testing 129
System enhancements productionized 130
Prepare dashboards and reporting for leadership review/analysis
o customer service results
o employee performances
o service usage (trends) 140
Establish retention program 150
Open for business 150
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Work Breakdown Structure and Gantt Chart

The work breakdown will have to start with a plan to delegate responsibilities for Kathy

Kudler, such as priority in hiring additional staff. Attached is a flowchart of what this process

will entail. Also below is a Gantt chart showing the specific tasks, amount completed, and an

estimated time to completion for each task. Kathy will have to assume the responsibility for

selecting individuals to perform each task, whether it is herself, newly hired employees, or

current ones. In keeping with the essential parameters of design, manipulation of certain

parameters must be accomplished to determine the division of labor and the successful

completion of coordination and cohesiveness among employees and customers. Job

specialization, training, indoctrination, unit grouping, liaison devises and unit sizes will play a

big role in the success of this project (Mintzberg, et.al., 2003)

To hire the people necessary to have cooking classes Kudler must first hire a cooking

class manager to oversee the program. Then that manager must interview staff, hire appropriate

amount of personnel and train employees accordingly. Licensing must be able to include the new

cooking classes. This will mean a health inspection must be done as well as new fire code

inspection. The business license must be changed to include the teaching of cooking classes so

that everything is legal. The stores must be redesigned to include the cooking class area. This

means that the bakery section must be expanded and new ovens put into accommodate the

cooking lessons. Cooking equipment must also be acquired. Depending on the size of the classes

the amount will vary. That decision must be made by Kathy Kudler and the new manager of the

cooking classes. Advertising of the cooking classes must be done. This will include the

development of the advertisements, survey of what advertisements work and production of a

local advertisement that will promote the new aspect of Kudler Fine Foods. Schedules of the
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cooking classes must be developed. Working with Kathy Kudler and store managers the cooking

class manager must design the class schedule where it will attract customers and not detracting

current customers away from the store (Pearce & Robinson, 2009)

The final decision is still up to Kudler but the day to day operations can be handled by the

manager. This time schedule shows that by July 1, 2011 Kudler Fine Foods can have an

operating cooking class program to bring customers into the store and to entice them to be more

familiar with the products sold.

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Interviewing
Manager

Interviewing
Personnel Staff

Hiring and
Training
Health
Inspection

Business
Licensing License

Fire
Inspection

Cooking Classes Teaching Redesign

for Customers Area Store

Cooking Obtain Cooking

Equipment Equipment
Develop

Advertising Survey

Produce
Schedules Set Schedules

Key Success Factors

Kudler Fine Foods will use several factors to determine the success of its new cooking

class, such as enrollment. The enrollment level of the cooking classes will be used as a measure

to determine if KFF’s customers are using the new service. With customer intimacy a focus for

KFF, it is necessary to keep the classes small, however adding classes if there is a demand is an

option.

New projects always run the risk of not being successful. This is why receiving positive

feedback will also be important. When introducing a new product or service, it is always
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somewhat a gamble on the success of the new product. Both types of feedback will be needed to

access the effectiveness of the cooking classes at KFF. Another success factor will be in the form

of customer feedback. Feedback will be a way for Kudler to keep the focus on the customer

intimacy. This portion of the strategic plan keeps the commitment to Kudler’s customers of

keeping them involved in the decisions of the organization. Customer satisfaction is very

important for measuring success of the new project. Using customer satisfaction surveys and

questionnaires, KFF will be able to determine the interest level in the cooking classes. KFF will

need to achieve a customer satisfaction rating of at least 80% to continue offering the cooking

classes. This level of satisfaction will ensure that the majority of KFF’s customers are using the

cooking classes and will continue to do so. If this customer service level drops, the program will

need to be reevaluated to see if actions can be taken to increase the rating. Measuring these key

success factors will make sure that the new project stays in alignment with the strategic plan of

Kudler Fine Foods.

Cash Budget and Forecast

KFF Cash Flow Budget - Customer Intimacy

Program
For the three months ending March 31, 2010

Februar
January y March Total
Beginning Cash Balance $4,400 $5,800
Cash Inflows (Income):
Accts. Rec. Associated with the C.I. Program 0 1,000 1,000 2,000
KFF Initial Venture Capitol 120,000 65,000 65,000 250,000
Other: 0 0 0
0
0
$120,00 $66,00
Total Cash Inflows 0 0 $66,000 $252,000
$120,00 $70,40
Available Cash Balance 0 0 $71,800
Cash Outflows (Expenses):
Implementation - Legal Expenses 10,000 0 0 10,000
Implementation - 3rd Party Vendors and Services 3,000 0 0 3,000
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Implementation - Project Management 1,200 1,200 1,200 3,600

Implementation - Marketing Costs (Research and Advertising) 10,000 10,000 10,000 30,000
Implementation - 3rd Party Vendors and Services 10,000 10,000 10,000 30,000
Implementation - Administrative Expenses 5,000 5,000 5,000 15,000
Labor - Accounting and Finance 3,000 0 0 3,000
Labor - Information Technology 1,500 1,500 1,500 4,500
Labor - Chiefs/Cook Specialists 5,000 5,000 5,000 15,000
Labor - Additional Associates 4,000 4,000 4,000 12,000
Operating - Facility Costs 1,000 1,000 1,000 3,000
Operating - Material and Supply Costs 12,000 12,000 12,000 36,000
Operating - Training and Licensing Costs 2,000 2,000 2,000 6,000
Operating - Additional Payroll 7,000 7,000 7,000 21,000
Operating - Payroll Taxes 2,800 2,800 2,800 8,400
Operating - Reoccurring Cooking Class Costs 1,000 1,000 1,000 3,000
Operating - Other Direct Expenses 1,800 1,800 1,800 5,400
Operating - Utilities & Telephone 300 300 300 900
Other:
0
0
0
$64,60
Subtotal $80,600 0 $64,600 $209,800
Other Cash Out Flows:
Capital Purchases (Ovens, Tables, etc) 35,000 0 0 35,000
Loan Principal 0 0 0 0
Owner's Draw 0 0 0 0
Other:
0
Subtotal $35,000 $0 $0 $35,000
$115,60 $64,60
Total Cash Outflows 0 0 $64,600 $244,800
Ending Cash Balance $4,400 $5,800 $7,200

Risk Management and Contingency Plan

The creation of cooking classes for Kudler Fine Foods creates additional risks for the store chain.

It is up to Kathy Kudler, owner, and her project management team to compose a risk assessment

plan. According to BusinessDictionary.com risk management is “policies, procedures, and

practices involved in identification, analysis, assessment, control, and avoidance, minimization,

or elimination of unacceptable risks.” Risks included with the new classes include financial and

legal.

Kathy and the project team must ensure that the store is financially prepared to take on
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10

these classes. There will be start-up costs such as purchasing additional appliances including

stoves and refrigerators. There is also the cost of materials including aprons, utensils, oven

mitts, cookware etcetera. The stores would also require renovation in order to accommodate

classrooms and the addition of appliances. Marketing will also be key to making these classes

successful. Instead of depleting any cash reserve the store has, it would be best to take out a loan

to complete the renovations, and purchases the start –up equipment. Kudler Fine Foods has

been in business for some time, and has good report with local banks. This should qualify them

for a short term loan. This would work best for the business as they would not have to offer

collateral and would end up paying less interest over the course of the loan (Short Term Loans

2009). There will be additional costs for utilities and food. This additional cost must be

accounted for in the budget and can be offset by the cost per student to take the course. To help

control costs, the cooking classes will start of small, and grow gradually over time. This will be

based off of the surveys and customer feedback. Kudler Fine Foods must also take into

consideration that it will take time to see profit. There will be enough cash in reserves to cover

the additional costs until the loan has been paid in full.

The addition of these classes can also pose legal risks. Kudler Fine Foods must have the

proper licenses and permits. It must also ensure that there are qualified and licensed instructors

teaching the class. The legal counsel will be in charge of ensuring that these qualifications are

met. Kathy, as owner, can approve the final plans of the project, but will work closely with legal

counsel to make sure that things are in order and completed properly. It would be ideal for

Kudler to leverage with a culinary art school and perform paid internships with the recent

graduates. This will reduce costs of hiring multiple chefs, and there will be fewer hazards if

someone leaves, as there will be others available. This will give the graduates hands on
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experiences, and save money for Kudler as well. Although Kudler will be performing cooking

classes it will be so that the average customer can get a better since of what ingredients to use as

well as what Kudler has to offer. Most of these customers are not aspiring to become

professional chefs so there is no conflict of interest.

Other legal liabilities include insurance for liability. This should be collaborated with the

legal counsel. The counsel should also draw up contracts for each of the class attendees to sign

which include their rights and include an arbitration clause should there be any personal injury or

damages.

Conclusion

The team analyzed the innovation strategy, products and services offered, and key

economic indicators. Today the new products and services made available by KFF, has made

them the most effective product development company in the market. KFF’s success with its

new products and services can be attributed to following the change of the market. The people,

company and the current culture are vital to Kudler Fine Foods successful story. Expansion in

services is essential in attracting customers and building long-term relationships.

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References

Apollo Group, Inc. (2007). Kudler Fine Foods [Computer Software]. Retrieved from University

of Phoenix, Simulation, STR581 - Strategic Planning and Implementation website.

Mintzberg, H. Ghoshal, S., Lampel, J., & Quinn, J.B. (2003). The strategy process: Concepts,

contexts, cases (4th ed.). Upper Saddle River, NJ: Prentice Hall.

Pearce, J.A., II, Robinson, R.B. (2011). Strategic management: Formulation, implementation,

and control (12th ed.). Boston, MA. McGraw-Hill/Irwin.