Fin 370 - Virtual Organization Strategy Paper
Virtual Organization Strategy Paper
Kathy Kudler founded Kudler Fine Food. She was once the VP of marketing for a large defense contractor. Weary of the constant travel and the pressures of corporate life, Kathy was looking for other opportunities. As it happened, Kathy relieved her stress through gourmet cooking and on a shopping trip for ingredients for a gourmet meal. Kathy suddenly realized there was an opportunity for an upscale epicurean food shop in La Jolla. Kathy developed a business plan, obtained financing and six months later, on June 18, 1998, the first Kudler Fine Foods opened. Within nine months the store was at break-even and was profitable for the year. In 2000, a second store was opened in Del Mar and in 2003 a third shop opened in Encinitas.
In this paper Team D analyzes the best option for Kudler Fine Food between going public through an IPO, acquiring another company within the same industry, or merging with another organization. Comparing the strengths, weakness, opportunities, and threats of all three options will help Team D to make a smart decision.
Strengths of Each Approach
Privately held firms looking for ways to increase cash flows are faced with a few decisions to make. Some of the options businesses have to increase their cash flows are going public through an initial public offering, merging with another company, or acquiring another company. Each of these methods has their own benefits. The method is determined by which method is agreeable to the company’s level of risk.
For a private company to raise money in the financial markets an initial public offering (IPO) has some advantages. One of the first benefits is generating revenue from the sale of shares of stock in the company. The company’s owners gain liquidity in their share of the company. This liquidity makes it easier for the owners to sell their interests in the company. Going public gives the company access to the public markets in the
Kathy Kudler founded Kudler Fine Food. She was once the VP of marketing for a large defense contractor. Weary of the constant travel and the pressures of corporate life, Kathy was looking for other opportunities. As it happened, Kathy relieved her stress through gourmet cooking and on a shopping trip for ingredients for a gourmet meal. Kathy suddenly realized there was an opportunity for an upscale epicurean food shop in La Jolla. Kathy developed a business plan, obtained financing and six months later, on June 18, 1998, the first Kudler Fine Foods opened. Within nine months the store was at break-even and was profitable for the year. In 2000, a second store was opened in Del Mar and in 2003 a third shop opened in Encinitas.
In this paper Team D analyzes the best option for Kudler Fine Food between going public through an IPO, acquiring another company within the same industry, or merging with another organization. Comparing the strengths, weakness, opportunities, and threats of all three options will help Team D to make a smart decision.
Strengths of Each Approach
Privately held firms looking for ways to increase cash flows are faced with a few decisions to make. Some of the options businesses have to increase their cash flows are going public through an initial public offering, merging with another company, or acquiring another company. Each of these methods has their own benefits. The method is determined by which method is agreeable to the company’s level of risk.
For a private company to raise money in the financial markets an initial public offering (IPO) has some advantages. One of the first benefits is generating revenue from the sale of shares of stock in the company. The company’s owners gain liquidity in their share of the company. This liquidity makes it easier for the owners to sell their interests in the company. Going public gives the company access to the public markets in the
References: INC, 2011. Preparing for initial Public Offering. Retrieved from: http://www.inc.com/guides/preparing-for-initial-public-offering.html Keown, A.J., Martin, J.D., & Petty, J.W., Scott, Jr., D.F. (2005). Financial Management: Principles and Applications, Tenth Ed. Retrieved from https://ecampus.phoenix.edu. Stumm, Tony. Keeping Good Companies. 2011. Risk in Acquiring Company Businesses by Takeover. Retrieved from: http://www.allbusiness.com/management/516014-1.html University of Phoenix (2003). Kudler Fine Foods. Retrieved from https://ecampus.phoenix.edu /secure/aapd/cist/vop/Business/Kudler/Admin/StrategicPlan2003.pdf