Krispy Kreme Doughnuts, Inc. (KKD) is an international retailer of high-quality sweet treats, including its signature hot Original Glazed® doughnut. It began as a small bakery in Winston Salem, NC on July 13, 1937. Since then, the company has built a global reputation for serving the highest-quality doughnuts and great tasting coffee.
Krispy Kreme Doughnuts is part of the Quick Service Restaurant (QSR) Industry, which includes almost all companies in the “fast food” industry. Our goal in this report is to use various tools to analyze KKD and recommend strategies for them to gain more competitive advantage in the market.
First, we will observe the operational characteristics of KKD. These factors will show positive indications of growth in Krispy Kreme. We will look at how many stores they have currently, how many they are planning to add (in the U.S and internationally), and the training and technology that differentiates them from others in the QSR industry. We then will evaluate the performance metrics, such as inventory turnover and days of inventory ratios, to compare how KKD compares to their competition.
In order to find out how efficient Krispy Kreme is operating, our group intends to
identify where the QSR is positioned according to the industry life cycle. We will observe the SWOT analysis, then we will analyze their competitors to see where KKD stands in relation. This will give us the basis to develop recommendations about their current strategies. We begin the “SWOT” analysis by assessing KKD’s strengths, weaknesses, opportunities, and threats.
II. SWOT ANALYSIS
The following SWOT analysis is intended to examine KKD’s internal strengths and weaknesses so we can link them to external opportunities and threats with the aim of developing a strategy they should pursue.
Strengths are characteristics of the business or project that give it an advantage over other competitors. As a global organization, KKD has become a household name as they’ve branched into grocery and convenience stores and made doughnuts readily accessible. KKD offers a product that cannot be matched by any competitors when referring to taste, freshness, and the finest ingredients. Their affordable, high-quality doughnuts create a strong visual appeal and "one-of-a-kind" taste. Some of the key strengths offered by KKD are: * You are able to get a fresh out of the oven doughnut in the store. Consumers are allowed to watch the process of the doughnuts being made and can buy doughnuts immediately after they are made so they are as hot and fresh as possible. * KKD is a vertically integrated company. They use specialized doughnut making equipment and specific doughnut mixes in each store. Vertical integration ensures a very high-quality product. * Market research shows appeal extends to all major demographic groups including age and income. * Consistent expansion: Krispy Kreme is now in 21 countries. * Product sold at thousands of supermarkets, convenience stores, and retail outlets through U.S. This raises product awareness to the maximum number of target consumers. * Fundraising: Organizations are able to use Krispy Kreme for fundraising. They allow consumers to use their donuts to help raise money for different philanthropies. (Ex: Krispy Kreme run) * Offers free doughnut day once a year to increase sales. This day allows people who have been reluctant to spend money on the donuts to get a free taste and therefore increases their amount of consumers.
Weaknesses are characteristics that place the firm at a disadvantage relative to others. Some apparent weaknesses Krispy Kreme might have are: * Limited amount of “healthy” selections.
* Limited menu: Lack Breakfast items.
* Limited amount of non-snack food items.
* Not innovative.
* No major advertising: 100% reliance on reputation.