Submitted by: Group 2
September 20, 2010
FACTS OF THE CASE
* Krispy Kreme – founded by Vernon Rudolph in Winston-Salem, North Carolina in 1937. He started his business venture by selling donuts to other stores. In the 1990s, the company grew rapidly to a national phenomenon with 366 stores in 44 states and eventually bought Montana Mills Bread. The business encountered problems and incurred big financial losses in 2004 which made them sell Montana Mills Bread in 2004 also at a loss. The management blamed it to the health wellness fad that still affects its performance today. Financial analyst contradicted, stating that the causes were its rapid store expansion, low productivity in its new stores, and its increased reliance on sales in grocery stores and other retail outlets. Currently, Krispy Kreme with its new CEO Daryl Brewster wants to reverse its fortunes and become the powerhouse again. STATEMENT OF THE PROBLEM
* What product and strategic repositioning do Krispy Kreme need to employ in order to bring back its profitability? KEY OBJECTIVES
* To assess and develop repositioning strategies for Krispy Kreme DIAGNOSIS AND ANALYSIS OF CAUSE
* One of the major driving force that constantly affects Krispy Kreme is the Global Marketplace. The company has to cope with a competition of a global scale both against leading world-known brands and local market players. Its losses are largely attributed to its inability to adapt to its environment. The global economic crisis & the socio-cultural shift towards healthy eating habits are the scanned facts within the general environment. Under the task environment, decline in the target market due to customers’ health-conscious fad and Dunkin Donuts’ successful marketing strategies turns to be a very dictating external considerations.
Boundary spanning activities to adapt to these factors were not employed successfully by Krispy Kreme. They were complacent and became too confident...
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