Kudler Fine Foods: Aspect of Development of E-Commerce Research Paper

Introduction

In the context of e-commerce, it is seen that internet business does not concern itself just with the acquisition, assimilation, and integration of emerging technology within existing processes, but also needs to involve itself with its logical sequentializing, patterning, and executive processes, keeping in view the implications of several factors like integrity, legality, ethicality and sound business practice, which also forms significant parts of e-commerce activities.

In the context of Kudler Fine Foods, how this could contribute to a useful and positive contribution to technological changes also needs to be seen in the light of concomitant efforts and commitment and could depend, to a large extent, on the effective use of emerging technologies for use in such profit-oriented business units.

Internet shopping for food has made forays to taken products, services, and utilities into the hands of consumers with maximum ease and expediency. …However, the main test would lie in the cost of operational use as compared to free labor provided by patrons in conventional settings. (Kinsey, 2000).

Being ethical and fair-minded in gourmet food business

The legal aspects of e-commerce entail respect and concurrence with local and international laws governing internet business. It is necessary that Kudler abides by internet laws, and conforms to accepted business practices in its e-business transactions. Since its main line is catering and supply of gourmet food to selective customers, the laws governing the internet food industry would become relevant and necessary.

In the event Kudler Fine foods wished to become internet-enabled and cater to its customers, suppliers, and vendors through the internet, it would be also necessary to consider ethical practices that impinge e-commerce business. It is an oft-repeated, albeit illegal practice among certain companies to gain e-commerce information about customers of rival businesses and induce them to buy their products, even at reduced prices, or along with giveaways and benefits. Sometimes these marketing gimmicks work, but this is detrimental to the overall preservation of e-commerce deployed trade since it is unethical and infringes on the independent and autonomous buying rights of internet users.

Although internet business is a subject matter of solicitation, it cannot supersede situational opportunities and strategic advantages one supplier may have over another, over applicable laws and regulatory measures designed to ensure customers’ health and welfare protection.

Coming to the security aspects, it is seen that the highest degree of confidentiality and data protection needs to be embedded in the systems since one of the key elements in 21st-century businesses are business strategies and market knowledge, which are assimilated and documented in computer archives.

In the event confidential company data become prey to reduced levels of protection and security, the threat of business losses is more real than apparent. Therefore, it becomes necessary to critically address and ensure management safeguards to business documents and corporate evidence.

Financial analysis

It is necessary to undertake a critical financial appraisal of Kudler Fine Foods to assess the possible effects of developing an e-commerce sustained environment for this Company. As is well known, the development of an e-commerce setting involves the allocation of large investments and bulk funds being tied up for some time, and therefore, appropriate financial tests must be taken up before approval could be accorded to e-commerce deployment in Kudler Foods.

For this study, the following leading ratios are being assessed in the context of Kudler gourmet foods.

1. Current Ratio = Current assets/Current liabilities.
2. Debt ratio = Total liabilities/ total assets.
3. Profit margin = Net income/ turnover.
4. Return on equity = Net income earned/ stockholders investments.
5. Return on Assets= Net income earned/ Average total assets.
6. Price/earnings ratio = Price of stock /Earnings per share ((n.d.), Brigham & Ehrhardt).

Further, it is believed that to arrive at an unbiased and balanced appraisal it is necessary to provide comparative figures of similar companies and make an assessment. Accordingly, the relative figures of Riordan Mfr. are also provided for review.

Comparison of performance indices of Kudler Food Compared with similar company Riordan Manufacturing Co.:

• Serial.
• Particulars.
• Riordan Manufacturing.
• Kudler Foods.
• Current Ratio: 2.1%, 16.9%.
• Debt ratio: 56.4%, 38.7%.
• Profit margin: 3.8%, 6.3%.
• Return on assets: 5.7%, 25.3%.
• Price /Equity Ratio; 18.8%. (Buchanan & Hautzinger, 2007).

Analysis of financial data

From the financial reports the following aspects could be figured out:

1. Since Kudler Foods has a higher current ratio, compared to industry standards, the company can allot funds and avail of investment options, without compromising on its short-term fund commitments. Seen in this light, it could be said that that the e-commerce ventures would not be financially hazardous, at least in the medium term. However, the impact of such ventures on the overall market positioning of the company needs to be assessed in depth and intensity before a final consent could be passed.
2. Coming to the debt ratio of 38.7% it could be maintained that the present debt structuring of the company is quite safe and additional debt could be incurred without jeopardizing the future of the company.
3. Being in the gourmet sector, Kudler can command premium prices for its food products, which is reflected in its profits, at 6% being higher than industry standards, (around 4%). However, it would necessary to maintain and even enhance profits in years to come, by cost balancing and prudent financial decision-making, especially in areas of manufacturing costs and inventories.
4. To cap it, the return on assets is around 25% which shows the degree of utilization and benefits derived from the use of assets. The proportion of profits that augur due to asset utilization is very high, which speaks well both from point of view of asset use and profit markings.

It could thus be seen that capital expenditures that would be needed for this e-commerce deployment could be used from accumulated profits that have accrued to the company. Since the cash position is also good, there are no constraints envisaged from the financial aspects of this e-commerce induction plan.

However, it is necessary to take up a complete and comprehensive study of the e-commerce impact in terms of marketing, financial, strategic business planning and execution, and most importantly the legal, ethical, and security aspects of eCommerce deployment in Kudler Foods before a final decision could be taken in this respect.

Conclusion

It could be seen that the financial viability and cost analysis of this project has been approved because it is cantering to an exclusive niche market where price impacts are minimal and high profits are assured. However, marketing and reputation (Especially about strategic Supply chain management and legal enforcement affecting the food industry) need to be enforced strictly and vigorously.

It is believed that with the right inputs, the internet-aided vending business of Kudler gourmet food would be impressive and sustainable for future growth and development.

References

Brigham,Eugene F.,& Ehrhardt, Michael C. (n.d.). Financial management theory and practice. Summary of Financial Ratios. 10th edition, 88.

Buchanan, Darren., & Hautzinger, Lise.(2007). Industry comparisons. The University of Phoenix. 2008. Web.

Kinsey, Jean. (2000). The electronic system in the food industry: Entropy, speed, and sales. E-Commerce Transformation: Sector Developments and Policy Implications. 2008. Web.