Melisa O’Neal, Nathan Reade, Jamie Vazquez, Scott Marquez
April 4, 2011
Virtual Organization Strategy Paper
Kudler Fine Foods was founded in June 1998 by Kathy Kudler. Within nine months the store reached the break-even point and showed a profit by the end of the year. In the next five years Kudler Fine Foods would expand to three locations and has proven to be a profitable business. Currently, Kudler Fine Foods is a privately owned business but needs to expand. Three methods of expansion will be analyzed by SWOT analysis and feedback will be provided for a recommendation of the best method of expansion.
Going Public through an IPO
Two strengths exist as reasons for …show more content…
Two strengths to acquiring another organization are as follows. First, acquiring another organization will reduce competition. If Kudler Fine Foods acquires another organization their competition will be lower because their competitor is working for them. A second strength is it will decrease operating and production costs. These costs will now be shared by another organization; therefore, reduced.
Two good reasons exist for Kudler Fine Foods to merge with another organization. Merging with another organization can strengthen Kudler Fine Foods by creating wealth that is accomplished in at least two ways. Wealth can first be created by economies of scales. Different expenses like accounting or data processing expenses can be reduced because of the organization splitting these expenses with another company. Wealth also can be created through market power growing (Keown, et al., 2005). …show more content…
Laws and regulations vary by state so any acquisition should be carefully reviewed by lawyers before acting. Risks of acquisitions must also be carefully analyzed to determine the target company’s financial standing including all liabilities and pending legal issues.
Another threat to consider is overpaying for the acquisition. In acquisitions, it is common for companies experiencing acquisition to “window dress’ the company to make the numbers look better. This includes selling stock with big losses and buying stock with big gains before the sale. If the acquisitions does go through there is also the threat of assimilation with the target company employees. Convincing the target company to follow Kudler’s organizational culture can be