Virtual Organization Strategy Paper
Kathy Kudler created Kudler Fine Foods in June 1998. The store only took nine months for to reach the break-even point, and at the end of the year, a profit was turned. Within the next five years Kudler Foods was able to expand to three more places and has been very profitable. At this time, Kudler Fine Foods is privately owned but wants to expand. Kudler Fine foods can either chose to go public through an initial public offering, acquire another organization, or merge with another organization. Team C will analyze the three options by using SWOT analysis and give a recommendation of the best way to expand.
Strengths of Each Approach
An initial public offering (IPO) would allow Kudler Fine Foods to go public and sell stock in the organization. Allowing Kudler Fine Foods to increase marketability, an IPO provides flexibility and the opportunity to raise funds quickly from the sale of stocks. Kudler’s management team will remain in control of the organization but will have a board of directors who oversees management’s decisions and ensures that Kudler acts in the best interest of the shareholders. The exposure of going public could increase the awareness of Kudler Fine Foods and could assist the organization in expanding into new markets (Keown, Martin, Petty, & Scott, 2005). Acquiring an organization allows Kudler Fine Foods to acquire the existing assets of another organization and the existing customer base also. The organization Kudler Fine Foods wants to purchase may be profitable and in a market that Kudler wants to enter. By acquiring an existing organization, Kudler minimizes the risk of entering a new market. The organization may be very similar to Kudler foods, and acquiring the organization will also eliminate any existing competition in the market. Kudler remains in control of both organizations and can