Krispy Kreme

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Title of the case:
Krispy Kreme Doughnuts
Time Context:
2008
Summary / Abstract:
Krispy Kreme Doughnuts is known to be the producer of doughnuts that they sell traditionally warm in public. The company’s success is widely known by the consumers in differents countries which makes them to be one of the outstanding companies in the business industry. But they encounter conflicts that results them to decline in some other ways. This case study on Krispy Kreme Doughnuts, determining the best practices to be shared and probably the negative practices to be explained with the newly formed companies that will soon to be known, will produce a very informative statements. This will explain the strength which makes the company to stand out in public and the opportunities that they need to forsee to become more successful for the coming years. The study also indicates the weaknesses and threats that makes the company to be aware in making decisions. Plans and actions are also indicated to avoid the conflicts or threats that the company may have. In 1937, KKD began as a single doughnut shop in North Carolina, selling doughnuts wholesale to supermarkets. The popularity of the product not only caused KKD to become a factory-like retail store but also led to the franchise of more stores to mostly franchisees. It was later purchased by Beatrice Foods, in 1973, who expanded it to 100 locations. Beatrice Foods also “introduced other products such as soups, sandwiches, and cut costs by changing the appearance of stores and substituting cheaper ingredients”. The business however did not flourish as expected, and was sold to a group of franchisees led by Joseph McAleer in 1982 for $24 million. McAller led the KKD back to using the original doughnut formula and the company’s traditional logo; in addition McAller introduce the “HOT DOUGHNUTS NOW” sign, which successfully told customers when fresh doughnuts were coming off the line. KKD continued to struggle but did expand slowly and became debt free in 1989. In 1998, Scott Livengood became CEO of KKD and took the company public on April 2000, and on the next day of public offering the company share price was $40.63, “giving the firm a market capitalization of nearly $500 million”. KKD generated revenues through four primary sources: retail stores, franchisee stores, off-premises sales to grocery and convenience stores and gas stations, and by manufacturing and distribution of machinery and product mix. MISSION: “To touch and enhance lives through the joy that is Krispy Kreme.” VISION: “To be the worldwide leader in sharing delicious tastes and creating joyful memories.” Statement of the Objective:

* To provide customers with the highest product quality in terms of taste, experience, and satisfaction.

* To increase and return in profitability

* To be the consumers’ doughnut choice by offering an affordable product.
I. Central Problem:
* How to provide customers with the highest product quality in terms of taste, experience, and satisfaction?

* How to be the consumers’ doughnut choice by offering an affordable product?

II. Areas of Consideration:

Strengths:
1. Well known quality products in business industry
2. Keeping a good reputation and good rapport
3. Their continuity of producing doughnuts makes them profitable 4. Wide expansion of their store nationwide as well as to foreign countries

III. Weaknesses:
1. Manufactures all equipment internally in its Manufacturing and Distribution Dept. 2. Lack of more Intl locations in the United Kingdom, Japan and Spain. 3. No online ordering capability.

4. Uncertainty of International market.
5. Competition. Competing against Starbucks coffee and Dunkin Donuts beverages.

Opportunities:

1. Having a potential growth in Europe and Asia
2. Improving of their franchise business
3. All equipment and Uniforms are supplied.
4. Growth in two-income...
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