Krispy Kreme Case Study
KRISPY KREME DOUGHNUTS IN 2005
ARE THE GLORY DAYS OVER?
CORPORATE BACKGROUND
Company History
First getting its corporate bearings on July 13, 1937 in Winston-Salem, North Carolina, Krispy Kreme Doughnuts have seen the many stages of financial gain and loss. Through the 1930’s and 1940’s the company saw regional growth and by the late 1950’s Krispy Kreme had opened 29 shops in 12 states. 1960 marked an era where management Vernon Rudolph and Mike Harding began to emphasize corporate standardization through its brand image. All Krispy Kreme shops were made with a green roof, a red-glazed brick exterior, a viewing window inside, an overhead conveyer for doughnut production, and bar stools. Original owner Vernon Rudolph in 1973, so Harding continued the growth and under their management the company’s revenues grew from more than $1 million in 1954 to $58 in 1974. Two years later, Beatrice Foods bought Krispy Kreme and tried to make some changes to the brand image and doughnut recipe. After seeing how the changes negatively affected sales, the owners changed the lettering and recipe back to the originals. A group of franchisees bought out the company in 1982 and due to double-digit interest rates no expansion was made. Eventually, corporate revenues grew steadily to $117 million 1989 and then edged off for six years.
New Management and Rapid Growth (Objectives)
Joining just a few years out of college, Scott Livengood joined the company in 1978. By 1992 he was president and chief operating officer, a member of the board of directors in 1994, president and CEO in 1998, and president, CEO, and chairman of the board in 1999. With Livengood’s leadership came a change in corporate objectives. By the mid-1990’s the company had fewer than 100 Krispy Kreme branded stores (franchised and company-owned), and total sales were stuck in the $110-120 million dollar range. This last for six years until 1996 when management decided it needed a new strategy for
ARE THE GLORY DAYS OVER?
CORPORATE BACKGROUND
Company History
First getting its corporate bearings on July 13, 1937 in Winston-Salem, North Carolina, Krispy Kreme Doughnuts have seen the many stages of financial gain and loss. Through the 1930’s and 1940’s the company saw regional growth and by the late 1950’s Krispy Kreme had opened 29 shops in 12 states. 1960 marked an era where management Vernon Rudolph and Mike Harding began to emphasize corporate standardization through its brand image. All Krispy Kreme shops were made with a green roof, a red-glazed brick exterior, a viewing window inside, an overhead conveyer for doughnut production, and bar stools. Original owner Vernon Rudolph in 1973, so Harding continued the growth and under their management the company’s revenues grew from more than $1 million in 1954 to $58 in 1974. Two years later, Beatrice Foods bought Krispy Kreme and tried to make some changes to the brand image and doughnut recipe. After seeing how the changes negatively affected sales, the owners changed the lettering and recipe back to the originals. A group of franchisees bought out the company in 1982 and due to double-digit interest rates no expansion was made. Eventually, corporate revenues grew steadily to $117 million 1989 and then edged off for six years.
New Management and Rapid Growth (Objectives)
Joining just a few years out of college, Scott Livengood joined the company in 1978. By 1992 he was president and chief operating officer, a member of the board of directors in 1994, president and CEO in 1998, and president, CEO, and chairman of the board in 1999. With Livengood’s leadership came a change in corporate objectives. By the mid-1990’s the company had fewer than 100 Krispy Kreme branded stores (franchised and company-owned), and total sales were stuck in the $110-120 million dollar range. This last for six years until 1996 when management decided it needed a new strategy for