Kudler+Fine+Foods final

Kudler+Fine+Foods final - Kudler Kudler Fine Foods:...

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Kudler 1 Kudler Fine Foods: Expansion Strategies Michelle Battles Paul Melacon Yesenia Scott University of Phoenix Finance for Business: FIN/370 Ellen King October 26, 2009
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Kudler 2 Kudler Fine Foods: Expansion Strategies In 1998, aspiring entrepreneur, Kathy Kudler opened her own gourmet food shop in La Jolla, California. Entitled, Kudler Fine Foods, the upscale store is designed to offer a wide variety of culinary specialty ingredients at a reasonable price in a centralized location. In addition to providing some of the best domestic and imported foods around, Kudler’s vision is simply to provide a location that would offer the costumer a convenient, economical way of gathering ingredients for meal preparation. An immediate success, Kudler Fine Foods not only reached its break-even point, but began to return a profit within the first nine months of operation. As the concept grew, so did opportunity for expansion. By 2003, Kudler opened two new facilities; one in Del Mar and another in Encinitas. Faced with the opportunity to once again expand the business, Kathy Kudler has decided to pursue recommendations for future growth. The information provided will compare and contrast the organizational strategies for deciding whether to: 1) go public through an IPO, 2) acquire another organization in the same industry, or 3) merge with another organization. Initial Public Offering When privately held organizations offer stock to the public for the very first time, it is referred to as an initial public offering (IPO). Considered to be part of a business’ financial strategy, an IPO is greatly indicative of a growing organization that has a need for much larger funding. To determine if a company is ready to IPO, growth rates should be measured over a minimum of a three year period; in the service industry, a 20% to 30% growth rate is recommended (Small Business Notes, 2009). Advantageous for any company deciding to go IPO, benchmarking or comparing similar sized publicly traded companies will help to determine
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Kudler 3 how much revenue is necessary prior to an organization going IPO (Small Business Notes, 2009). A benefit to going public is that the business will be able to add liquidity and gain large
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This note was uploaded on 05/14/2011 for the course BUS 475 taught by Professor Lessor during the Spring '09 term at University of Phoenix.

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Kudler+Fine+Foods final - Kudler Kudler Fine Foods:...

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