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Kudler Fine Foods: Virtual Organization Strategy

Kudler Fine Foods is the chosen organization. Assume that your selected organization is a privately held company and that it wants to expand its operations. The organization is faced with three options to expand it operations:

A. They can go public through an IPO.
B. They can acquire another company in the same industry.
C. They can merge with another organization.

Using the Internet, texts, Electronic Reserve Readings (ERR), and other resources, compare and contrast what are the opportunities of each approach write 200-250 words explaining the following:

4. They can acquire another company in the same industry.

- Weaknesses of approach
- Threats of approach

Solution Preview

Kudler Fine Foods Company is a privately held Company and it wants to expand its operations. Here, the company is given three options for the infusion of capital to expand its operations:

1. They can go public through an IPO
Here the Company can make public issue to get the large amount of capital. For this purpose, the Company can issue shares, Debentures and preferred stock.

When the Company goes to public, then it has to be converted into Public limited Company because the private Limited companies are not allowed to go for public.

1. If the Company goes to public, then it can get huge amount of money as the capital. The money can be utilized for the expansion of the industrial undertaking by establishing additional industrial units to produce more quanta of finished goods which ultimately increase the sales and the profit of the Company will become high.
2. When the sales are more, the Company can achieve more shares in the market and it can soon become the market leader and can dictate the price in the long run.
3. Further, because of the expansion of the unit, it can produce more goods and can achieve the economies of scale.
4. The Company has the freedom and flexibility to spend the capital which will lead to increase in company's growth rate, solid financial base and high level of liquidity.
5. Conversion of private Company into public company will give the opportunity to ...

Solution Summary

The answer contains opportunities, threats and weaknesses of Initial public offer, merger with another company, acquisition of other companies in same industry. 937 words.