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schools and other organizations. The company opened a unit dedicated for manufacturing and
distribution which by the 1960s entered into automation that led to the focus on planning and
timing of the doughnuts production.
In the year 1973, Rudolph died and by then Krispy Kreme had 60 chain stores. Later in 1976,
Krispy Kreme was acquired by Beatrice Foods Company in Chicago. Beatrice Foods was a wellrecognized back then and gained franchisees for Krispy Kreme in 1982 and in 1989 the first
retail store of Krispy Kreme was opened.
In the 1990s, Krispy Kreme rapidly expanded with opening its stores in New York and
California, after which they decided to go global by opening its first store outside the US in
Canada in the year 2001.
Further achievements of Krispy Kreme doughnuts were: the signature Krispy Kreme Coffee in
2011, launch of the hot light application on mobile phones, 500th international store opening in
2012, 75 years of existence of the company and also Tony Thompson was appointed as the
President and CEO of Krispy Kreme in the year 2014.
Today Krispy Kreme not only operates as chain stores but also in mega-chains like Walmart,
Target and major gas stations.
Existing Mission Statement:
Our mission is to touch and enhance lives through the joy that is Krispy Kreme.
Existing Vision Statement:
Our vision is to be the worldwide leader in sharing delicious tastes and creating joyful memories.
To deliver the best quality doughnuts and coffee to its customers by innovating and giving
outstanding service in an exciting store atmosphere.
Revised Vision Statement:
To be the most loved and respected doughnut and coffee company internationally.
External Opportunities of Krispy Kreme Doughnuts:
breakfast meals
Expand domestically
Increase in coffee consumption
Improvement in automated operations
Involvement in social media marketing
External Threats of Krispy Kreme Doughnuts:
Critical Success
Factors
Product Quality
Weight
Dunkin Donuts
Ratin
Score
McDonalds
Rating
Score
Tim Hortons
Rating
Score
0.10
g
3
0.30
0.30
0.40
Product Diversity
0.08
0.16
0.24
0.16
Advertising
Price
Customer Loyalty
Financial Status
Global Expansion
Sales
Market Share
Total
0.03
0.10
0.08
0.05
0.13
0.11
0.15
1
4
4
3
2
4
3
2
0.12
0.40
0.24
0.10
0.52
0.33
0.30
2.47
4
3
3
4
4
3
3
0.12
0.30
0.24
0.20
0.52
0.33
0.45
2.7
1
2
4
3
4
4
4
0.03
0.20
0.24
0.15
0.52
0.44
0.60
2.74
Weight
0.06
0.09
0.05
Rating
3
4
3
Weighted Score
0.24
0.36
0.15
bakery items
4. Dunkin Donuts dont sell hot glazed
0.04
0.40
doughnuts
5. McDonalds is more concentrated on coffee
0.08
0.24
0.11
0.33
Weight
0.14
Rating
4
Weighted Score
0.56
Donuts
8. Health conscious customers
9. Krispy Kreme has less stores compared to
0.10
0.10
3
2
0.30
0.20
0.09
0.06
0.08
2
2
1
0.18
0.12
0.08
3.16
Weight
0.09
Rating
4
Weighted Score
0.36
0.08
0.07
4
3
0.24
0.21
0.10
0.30
countries
5. Product conveniently available at mega-
0.09
0.18
0.08
0.16
Weight
0.10
0.07
Rating
2
2
Weighted Score
0.20
0.14
9. Lack of advertising
0.07
0.07
0.06
0.08
1
1
0.06
0.08
unhealthy
12. Downfall in revenues and loss in the past 3
0.06
0.12
years
13. Poor company management
Total
0.05
1
0.10
2.22
1.
2.
3.
4.
5.
6.
7.
Strengths
Brand recognition
Produces quality products
Sells 20 varieties of doughnuts, other
bakery items and coffee
Sold at mega-chains like Walmart and
Target and also at gas stations
Existing worldwide with 395 stores
locations
Affordable price
Signature original hot glazed doughnuts
1.
2.
3.
4.
5.
6.
7.
8.
Opportunities
1. Innovating its
production line in the
category of hot
doughnuts
2. Increasing stores at
airports and petrol
pumps in foreign
countries
3. Diversifying its
product line in various
categories, i.e., icecreams, ice-cream
cakes and breakfast
meals
4. Expand domestically
5. Increase in coffee
consumption
6. Improvement in
automated operations
7. Involvement in social
media marketing
Weaknesses
Doughnuts are considered high-calorie
and unhealthy
The company has faced downfall in
revenues and loss in the past 3 years
Lack of returns and dividends to
shareholders due to reduction in stock
price
Not much focus on advertising
campaigns
Strong competitors are Dunkin Donuts
and Starbucks
Conflicts with franchisees
Limited product line
Poor company management
SO Strategies
WO Strategies
1. Do marketing on social
1. Producing and
media about their 20
innovating healthy
different varieties of
doughnuts made of
franchisees by
by offering at
improving its
advertising in order to
compete with Dunkin
Donuts and Starbucks.
(W5, O7)
Threats
1. Health conscious
customers
2. Many competitors for
example, Dunkin
Donuts, McDonalds
and Tim Hortons
3. Changing tastes and
preferences of
customers, more
preference towards
organic markets due to
long term health issues
like obesity and
diabetes
4. Local doughnut brand
competitors
ST Strategies
1. Comparing with
WT Strategies
1. Introduce healthier and
low-calorie product
with changing
preferences of
T2)
2. Providing better
quality products
compared to local
brands in the country.
(S2, T4)
Rating
2
1
3
3
2
2.2
Rating
-6
Product quality
Technological know-how
Consumer loyalty
Average
-1
-3
-4
-3.5
Rating
-1
-2
-3
-5
-5
-3.2
-1
Rating
3
1
2
2
2
-1.5
7
6
5
4
3
2
1
0
-1.20
-1
-2
-3
-4
-5
-6
-7
Krispy Kreme Doughnuts should follow a Defensive strategy as a result of the SPACE Matrix.
The strategies they should follow are:
0.16
0.15
0.14
0.13
0.12
0.11
0%
0.1
-5%
-10%
-15%
-20%
0.09
1.
To ensure freshness, truckloads of the main ingredients are received on a regular basis
2.
3.
4.
Krispy Kreme also produces the primary doughnut-making equipment. Franchisees are required
to use such equipment. (Fred David, Strategic Management Concepts and Cases, 13th Edition).
Implementation of recommended strategies:
1. Stores can be rapidly expanded by opening them in convenient areas where most of the
crowd is found i.e., malls, airports, petrol pumps, etc.
2. Choosing a well experienced candidate for franchising.
3. Because of the brand recognition, KKD can initiate advertising campaigns on the social
media, TV, radio and newspapers.
4. Producing theme based or festive season doughnuts and changing the packaging after
every few months.
5. Selling their doughnuts at the mega-chains worldwide would be a good opportunity to
expand, for example, Walmart, Carrefour, Waitrose, etc.
FORECASTED BALANCE SHEET FOR THE YEAR 2016, 2017
February 1,
February 2,
2017
2016
(In thousands)
ASSETS
CURRENT ASSETS:
65,900
53,900
Receivables
29,499
26,450
989
840
Inventories
20,264
18,550
24,545
24,500
7,210
6,330
_______________
Total current assets
________________
148,407
130,570
124,800
103,200
33,000
28,156
68,000
79,600
Other assets
12,800
12,425
________________
Total assets
$ 238,600
________________
LIABILITIES AND SHAREHOLDERS EQUITY
__________________
$ 223,381
__________________
CURRENT LIABILITIES:
Current portion of lease obligations
$ 401
$ 388
Accounts payable
16,000
16,450
Accrued liabilities
30,300
28,423
__________________
__________________
46,701
45,261
9,945
3,900
22,600
22,500
340,900
339,400
Accumulated deficit
(39,800)
(69,000)
_________________________________
Total shareholders equity
380,346
342,061
___________________________________
$ 363,500
$ 342,061
References:
Textbook reference:
Strategic Management Concepts and Cases, 13th Edition by Fred R. David
Website reference:
http://d1lge852tjjqow.cloudfront.net/CIK-0001100270/7182db60-a56d-439d-957a8ded83120cb5.pdf
http://www.nasdaq.com/symbol/kkd/financials?query=income-statement
http://www.wikiwealth.com/swot-analysis:kkd
https://prezi.com/y_8bizxu7lct/copy-of-krispy-kreme-case-analysis/
https://www.krispykreme.com/
https://en.wikipedia.org/wiki/Krispy_Kreme