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Case summary and current issues

Cooks and Kitchens Unlimited (Ltd), is a family business established by Alfred Montague in 1960s. After his retirement, his son and daughter are looking after the business. The company offers quality products in the market for cheaper rates with a view to attract and retain the customers by providing high value for lesser price. They offer both kitchen and catering services to boost wholesale business. The company also produces its own kitchen and associated equipment and, in some cases import is also done from overseas including UK. There are five departments within the company.

Current issues in the case

  • The financial results show a decreasing trend in the retail sales, retail gross profit, wholesale sales and wholesale gross profit, and from 4 million in 1997 it has dropped to 3.2 million in 1999.
  • The company decides to expand its business, mainly to open 20 retail outlets in order to increase the sales volume and to improve profits as the overall business objective.
  • The company does not have any loan, but its main source of funding envisages on overdraft of about £200,000.
  • The company spends large amounts on advertising and offers discounting for sales promotion. The ad is given only in the print media like local papers and retail magazines highlighting the special offers and products in a less attractive platform of black and white.
  • Even though the retail shops had initial success, today their upkeep has become expensive. Cutting the staff and wage levels have helped to a certain extent in reducing overheads. The company also decides to accept switch and delta cards from the customers who opened accounts with them.
  • The company holds a high level of stock.


From the analysis of current situation of the ‘Cooks and Kitchens Unlimited (Ltd.), the following recommendations can be considered for improving its performance. The sales figures show a decreasing trend and gross profit of the both wholesale and retail business have slumped. For improving this, the company should make some changes in the advertisement system being followed by them. This policy should focus on reducing costs while achieving higher customer attraction. Mouth to mouth advertisement of the existing satisfied customers is the best and most effective method. Therefore, the company must make sure that all the customers are satisfied by way of improving the quality of its products and services. This can enhance their reputation thereby increasing the sales and profit.

Another recommendation is that, the company can put a restriction on the importing of goods from other countries and instead they have to manufacture using own manufacturing facility or by setting up additional facility. The different divisions of the company like depot and warehousing, retail shops, manufacturing, kitchen and hospitality design, finance and sales and marketing are to be linked to each other so that the staffs of each division can interact with each other. In addition, the two joint managing directors need to take all necessary steps to improve the company’s business.

Learning application

The case study of the Cooks and Kitchens Unlimited (Ltd.) has provided an understanding that if there is no hard work and loyalty from those who lead the company, it may cause the reduction in the sales and adversely affect its profitability. It is not necessary that the reputation of the company last for long time. If there is no effort from the part of the concerned parties to maintain this reputation, it will definitely come down. The top management is supposed to take wise decisions with regard to the management of the company.

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