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According to the analysis of Kudler’s Fine Foods, the potential electronic commerce program aspects related to the development of the Kudler’s Fine Foods Frequent Shopper program have been one of the fundamental contributors to the growth of the company. “New store locations (growth), information technology applications (internal efficiency) and special ordering (customer-oriented) are examples of the added response strategies” (Turban, Efrain, Kelly, and Richard, 2003).

This growth has brought along with it a number of challenges that Kathy must address to only remain competitive but also retain the core pool of her customers while at the same time attracting others. While Kathy is armed with a number of strategic operational methods aimed at increasing loyalty that range from the expansion of its services, frequent shopper program and Increased efficiency, the introduction of electronic commerce on the frequent shopper remains an effective strategy for this company but comes along with legal, ethical and security issues that have to be addressed.

The development of the frequent shopper program using electronic commerce poses the legal challenge in that the identification of the customer must be done to differentiate between the different types of customers. To effectively track down the shopping patterns of particular customers at the individual levels must involve the customers themselves so that the provisions of the high-value incentives are rewarded to the specific and right customer. In addition to the above, a list of legislations must be adequately put into consideration during the implementation of the electronic commerce aspects related to the development of the Kudler Fine Foods Frequent Shopper Program.

These include the Privacy Act, electronic transactions Act, Spam Act and the various laws that apply to e- businesses. All these steps are aimed at protecting the customer from identity theft and fraud. Furthermore, the loyalty programs in partnership with the other service providers such as airlines and different stores that offer high-end gift items mean that a legal partnership must exist between the parties to enhance not only smooth operations’ but also avoid conflicts of business interests. According to Turban, Efrain, Kelly, and Richard (2003),

In analyzing legal risks, it is helpful to divide an agent’s activities into two fundamental classes: actor and observer. Anytime an agent’s objective is to alter another’s structure, i.e. to acquire or enforce any rights, the agent is an actor; when an agent’s objective stems from a desire to alter internal structure only, i.e., to receive information or create associations, the agent is an observer.

The actor and the observer in the analysis of this company are the company itself and the customer respectively. The company must effectively ensure that all the legalities in regard to the implementation of the electronic commerce aspects related to the development of the Kudler Fine Foods Frequent Shopper Program.

“Electronic commerce is what is going on, and there appears to be enough for everyone but ethical issues remain a great concern to companies implementing e-commerce within their modes of operations” (Gomez, Luis, Balkin and David, 2002). This is because the electronic commerce aspects related to the development of the Kudler Fine Foods Frequent Shopper Program definitely touch on the core culture of the company. Ethics in relation to the customer relationship and the company’s mode of operation will definitely be affected. This will lay the groundwork for the restructuring of the culture and modes of the company’s operations to adequately adopt the demands of the electronic commerce aspects related to its development.

In addition to the two issues highlighted above, the electronic commerce aspects related to the development of the Kudler Fine Foods Frequent Shopper Program also come along with security concerns and challenges. In appreciating the fact the purpose of electronic commerce is to increase revenue, the security of the customer’s information and details must be protected to the best level by the company. This point draws us back to the roles of the spam Act and the Cyberthreat Act.

The possibility of the personal details landing in the hands of the cybercriminals if necessary security issues are not adequately addressed is indeed very real in today’s electronic commerce. To successfully achieve high-security measures that are fully capable of protecting the customer from spyware, Kathy must hire IT technicians to continuously upgrade the e-commerce software tools.

“In reality, strategy formulation and implementation are two sides of the same coin” (Gomez, Luis, Balkin and David, 2002). To drive up sales, increase revenue and win the trust and the loyalty of the frequent shoppers, Kathy has no option but to ensure that the customer’s identity and personal details are protected from cybercriminals. This will not only gain the confidence of the customers participating in the loyalty rewards but will also ensure that Kudler remains a strong brand in the market that has the capacity to achieve its targets and satisfy the demands of its customers.


Gomez, M., Luis R., Balkin, S and David B. (2002). Management 1e. New York : The McGraw Hill Companies.

Turban, E., Efrain, M., Rainer, R., Kelly, P. and Richard E. (2003) Introduction to Information Technology. New York: John Wiley and Sons Inc.

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