While expanding is important and every business owner’s dream, Kudler Fine Foods second opening should have looked a little closer. There are clearly several flags that Kudler Fine Foods’ financial management team overlooked; one is the size of the population, the close location to the first store, and the future of the economy. The three are very important indicators and if research properly bringing into account the North American Free Trade Agreement (NAFTA) in January 1, 1994 and all remaining restrictions were eliminated as scheduled, on January 1, 2008. NAFTA has created the world's largest free trade area and links millions of people producing trillions worth of goods and services in free trade around the world. Trade between the United States and its NAFTA partners has soared because the agreement went into force (Office of the United States Trade Rep, Executive Office of the President: http://www.ustr.gov/trade-agreements/free-trade-agreements/north-american-free-trade-agreement-nafta). This should have been taken into account when research was done on the issue of opening up a second store, a better idea would have been to offer online ordering and deliver service to the Del Mar location.
Kudler financial management team function is to manage the company’s finances and resources so that it can meet its goals and objectives, in this case to expand and service the population in the Del Mar area. This was not carefully calculated because the NAFTA was a part the decision and therefore the second store does not have a chance for survival, regardless of it product or marketing effectiveness (Nickels, McHugh, McHugh: Chapter 18, Financial Management). This is why Del Mar will be close when the third store is open, and this along is a bad business decision with it comes to finances and resources. If Kudler financial management team would have taken into consideration that Del Mar’s population was small even though... [continues]
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