MKT 551/Marketing Management
Jason Lamar Floyd
Professor Tonya Boddie
January 30, 2006
I. EXECUTIVE SUMMARY
Krispy Kreme's recent success has left many individuals in awe. This study attempts to de-mystify how Krispy Kreme has come to dominate the doughnut world and what problems lie ahead in the future. The tools used in this examination will begin with the history of Krispy Kreme. Then an external and internal analysis will dissect Krispy Kreme's current market and what steps Krispy Kreme is taking to compete in that market, including a look into competitors. Krispy Kreme provides equipment, services, and supplies to franchisees and doughnuts to consumers in a fashion similar to those of McDonalds and Yum! Brands For a healthy audit of Krispy Kreme, it is appropriate to analyze (1) the health of the specialty foods industry in which the company competes and derives its revenues and (2) how well the company is competing and deriving revenues. The accounting analysis will assess whether the company's accounting procedures and disclosure policy are beneficial to stakeholders. Finally, I will research financial data of Krispy Kreme, using relevant data and ratios to assess the position of the company.
These problems include Krispy Kreme's slow movement into international markets. Competitors such as Dunking Doughnuts are in the process of establishing markets in countries using a multi-domestic strategy. This could cause problems when Krispy Kreme inevitably moves into its international role. Krispy Kreme also ties up capital in inventory costs. Taking almost double the time of the industry average to turn over inventory wastes capital that could otherwise be used for store improvement or capital investments. The next threat faced by Krispy Kreme is its undiversified product line. While established restaurants use changes in product lines to attract new customers, Krispy Kreme has relied on it's core product line combined... [continues]
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