Krispy Kreme Company Analysis and Evualtion

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Running Head: COMPANY ANALYSIS AND EVULATION PROJECT

Company Analysis and Evaluation Project
Krispy Kreme Doughnut, Inc.
By
Todd E Mandley
For
Dr. Manny Jose, BUSI 601, Accounting for Decision Making
Liberty University

Table of Contents
Title Page ……………………………………………………………………………. 1 Table of Contents……………………………………………………………………. 2 Organization Description…………………………………………………………… 3 SWOT Analysis chart………………………………………………………………. 4 Balanced Scorecard chart…………………………………………………………… 5 Critical Success Factor Discussion…………………………………………………. 6 Evaluation of Critical Success Factors……………………………………………… 8 References…………………………………………………………………………... 10

Organization Description
Krispy Kreme is a highly successful company, whose main product, not surprisingly, is doughnuts. Founded in 1937 in Winston-Salem, NC by Vernon Rudolph, Krispy Kreme Doughnuts (KKD) specializes in premium quality doughnuts. KKD offers over 25 different varieties of doughnuts as well as a coffee line with espresso-based drinks, frozen beverages, and milk products. Krispy Kreme in FY 2008 had $429.3 million is sales, and currently employs 4,033 (http://www.hoovers.com/krispy-kreme/--ID__53559--/free-co-factsheet.xhtml). Krispy Kreme currently has around “300 doughnut stores and more than 200 smaller-format satellite locations throughout the US and in more than a dozen other countries”(http://www.hoovers.com/krispy-kreme/--ID__53559--/free-co-factsheet.xhtml). Krispy Kreme has about 100 company-owned, and the remaining are franchised stores. They sell doughnuts in retail stores, supermarkets, convenience stores and other retail outlets. Krispy Kreme’s best-known product is the fresh, glazed, yeast doughnut, called the “Hot Original Glazed”. Krispy Kreme also produces over a dozen other varieties of yeast and cake doughnuts. The company went public in 2000, and saw a hugely successful increase in share price immediately after. KKD currently has three major competitors; Dunkin Doughnuts based out of Canton, MA; Starbucks based out of Seattle, WA; and Tim Hortons based out of Oakville, Canada (http://www.hoovers.com/krispy-kreme/--ID__53559--/free-co-factsheet.xhtml).

SWOT Analysis
Strengths * In business since 1937 * Brand name recognition * A mass appeal based mostly on word of mouth * Able to generate media frenzy without use of major or national advertising * Reduced advertising costs leads to increased profit margins * Unaffected by both the events of Sep 11th and downturn in technology based industries * The appeal for luxuries like doughnuts continues during the economic instability. * KKD may be strong bet for investors wary of technology-based stocks| Weaknesses * One market focus * Word of mouth marketing may not work as KKD tries to expand in foreign markets * Lack of a large-scale marketing strategy, so startup will be costly * Purchase of “Montana Mills” resulted in inheritance of one million dollar debt * Large franchise system, which accounts for 60% of the organization * Large losses by franchisees will negatively affect the organization.| Opportunities * International expansion * Continue to expand within the United States * Further expansion into the North Eastern States where competition has stronghold * Expand into Canada where first store opened in 1989 had huge success. * Expand franchisees * Expand off-site distributions (i.e. grocery stores, coffee shops, etc…)| Threats * Low-carb and diet fitness fad * Changing of food and/or franchise regulations * New entrants * Economic instability * Reduction of investors * Franchise losses increase as a result of poor location in a flat economy * Saturation of doughnut market| Sources: http://www.hoovers.com/krispy-kreme/--ID__53559--/free-co-factsheet.xhtml and http://investor.krispykreme.com/

Balanced Scorecard

| Objectives:| Measures:| Targets:| Initiatives:|
Financial Factors| 1. Grow...
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