Krispy Kreme Doughnuts - Strategic Case Analysis

7/24/2019 Krispy Kreme Doughnuts - Strategic Case Analysis

1/17

Name: Neelam Lokwani

Madonna Id: 236488

Course: Business Policy

Dae: !"#!4#2"!$

%irs Case &nalysis

Case !2: 'ris(y 'reme Dou)*nus

Inroducion

'ris(y 'reme Dou)*nus is a )lo+al c*ain o, dou)*nus- co,,ee- sundaes and s*akes *a was

,ounded +y .ernon /udol(* in 0inon1alem- in *e year !35 .ernon /udol(* *ad +ou)*

a yeas1raised dou)*nu reci(e *rou)* Is*mael &rmsron)- *is uncle +y a New 7rleans %renc*

C*e, Is*mael knew and .ernon +e)an sellin) dou)*nus o )rocery sores *e ,irs (roduc sold

+y .ernon was *e *o 7ri)inal 9laed Dou)*nus o cusomers on *e sidewalk

*e ,irs 'ris(y 'reme lo)o was desi)ned +y Benny Dinkins- a local arc*iec *e ,irs 'ris(y

'reme +akery ouside *e ou* o(ened in &kron- 7*ioin !3

;*(s:##enwiki(ediaor)#wiki#'ris(y


2/17

sc*ools and o*er or)aniaions *e com(any o(ened a uni dedicaed ,or manu,acurin) and

disri+uion w*ic* +y *e !6"s enered ino auomaion *a led o *e ,ocus on (lannin) and

imin) o, *e dou)*nus (roducion

In *e year !53- /udol(* died and +y *en 'ris(y 'reme *ad 6" c*ain sores Laer in !56-

'ris(y 'reme was ac@uired +y Bearice %oods Com(any in C*ica)o Bearice %oods was a well1

reco)nied +ack *en and )ained ,ranc*isees ,or 'ris(y 'reme in !82 and in !8 *e ,irs

reail sore o, 'ris(y 'reme was o(ened

In *e !"s- 'ris(y 'reme ra(idly e?(anded wi* o(enin) is sores in New Aork and

Cali,ornia- a,er w*ic* *ey decided o )o )lo+al +y o(enin) is ,irs sore ouside *e in

Canada in *e year 2""!

%ur*er ac*ie>emens o, 'ris(y 'reme dou)*nus were: *e si)naure 'ris(y 'reme Co,,ee in

2"!!- launc* o, *e *o li)* a((licaion on mo+ile (*ones- $""*inernaional sore o(enin) in

2"!2- 5$ years o, e?isence o, *e com(any and also ony *om(son was a((oined as *e

Presiden and C7 o, 'ris(y 'reme in *e year 2"!4

oday 'ris(y 'reme no only o(eraes as c*ain sores +u also in me)a1c*ains like 0almar-

ar)e and maor )as saions

?isin) Mission aemen:

7ur mission is o ouc* and en*ance li>es *rou)* *e oy *a is 'ris(y 'reme

?isin) .ision aemen:

7ur >ision is o +e *e worldwide leader in s*arin) delicious ases and creain) oy,ul memories


3/17

'ris(y 'remes rae)ies 7+eci>es:

o increase *e num+er o, com(any sores worldwide o (roduce and o,,er *eal*y dou)*nus o 'ris(y 'reme cusomers

o increase *e com(any sock (rice in order o *a>e *i)*er s*are*older >alue

o increase sales s(eci,ically in *e dou)*nus secion

o iniiae di,,eren y(es o, markein) srae)ies ,or +rand reco)niion and in>esmen

srae)ies ,or on1sore and o,,1sore o(eraions

o realie new ac*ie>a+le and ori)inal sandards ,or u(comin) ,ranc*isers

/e>ised Mission aemen:

Eo deli>er *e +es @ualiy dou)*nus and co,,ee o is cusomers +y inno>ain) and )i>in)

ousandin) ser>ice in an e?ciin) sore amos(*ereF

/e>ised .ision aemen:

Eo +e *e mos lo>ed and res(eced dou)*nu and co,,ee com(any inernaionallyF

?ernal 7((oruniies o, 'ris(y 'reme Dou)*nus:

Inno>ain) is (roducion line in *e cae)ory o, *o dou)*nus

Increasin) sores a air(ors and (erol (um(s in ,orei)n counries

Di>ersi,yin) is (roduc line in >arious cae)ories- ie- ice1creams- ice1cream cakes and

+reak,as meals

?(and domesically

Increase in co,,ee consum(ion

Im(ro>emen in auomaed o(eraions

In>ol>emen in social media markein)

?ernal *reas o, 'ris(y 'reme Dou)*nus:


4/17

Geal* conscious cusomers

Many com(eiors ,or e?am(le- Dunkin Donus- McDonalds and im Gorons

C*an)in) ases and (re,erences o, cusomers- more (re,erence owards or)anic markes

due o lon) erm *eal* issues like o+esiy and dia+ees

Local dou)*nu +rand com(eiors

Com(eii>e Pro,ile Mari? ;CPM=:

Dunkin Donus McDonalds im Gorons

Criical uccess

%acors

0ei)* /ain

)

core /ain) core /ain) core

Produc Hualiy "!" 3 "3" 3 "3" 4 "4"

Produc Di>ersiy ""8 2 "!6 4 "24 2 "!6

&d>erisin) ""3 4 "!2 4 "!2 ! ""3

Price "!" 4 "4" 3 "3" 2 "2"

Cusomer Loyaly ""8 3 "24 3 "24 4 "24

%inancial aus ""$ 2 "!" 4 "2" 3 "!$

9lo+al ?(ansion "!3 4 "$2 4 "$2 4 "$2

ales "!! 3 "33 3 "33 4 "44

Marke *are "!$ 2 "3" 3 "4$ 4 "6"

oal ! 245 25 254

?ernal %acor >aluaion ;%= Mari?:

'ey ?ernal %acors 7((oruniies 0ei)* /ain) 0ei)*ed core

! &sians *a>e a swee oo* ,or 0esern +rands ""6 3 "24

2 C*ildren like swee reas "" 4 "36

3 ar+ucks is more concenraed on co,,ee *an

+akery iems

""$ 3 "!$

4 Dunkin Donus don sell *o )laed

dou)*nus

""4 4 "4"

$ McDonalds is more concenraed on co,,ee

and s*akes *an dou)*nus

""8 3 "24


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6 im Gorons are ye o e?(and )lo+ally "!! 3 "33

'ey ?ernal %acors *reas 0ei)* /ain) 0ei)*ed core

5 Dou)*nu marke dominaed +y Dunkin

Donus

"!4 4 "$6

8 Geal* conscious cusomers "!" 3 "3"

'ris(y 'reme *as less sores com(ared o

ar+ucks and Dunkin Donus

"!" 2 "2"

!" uro(ean culure (re,er local +rands "" 2 "!8

!! uro(ean ,ollow cerain ei@uees ""6 2 "!2

!2 Due o lack o, reurns and di>idends-

s*are*olders *ad o sell ''D socks

""8 ! ""8

oal ! 3!6

Inernal ren)*s o, 'ris(y 'reme Dou)*nus:

i)naure ori)inal *o )laed dou)*nus

Brand reco)niion

Produces @ualiy (roducs

?isin) worldwide wi* 3$ sores locaions

old a me)a1c*ains like 0almar and ar)e and also a )as saions

ells 2" >arieies o, dou)*nus- o*er +akery iems and co,,ee

&,,orda+le (rice

Inernal 0eaknesses o, 'ris(y 'reme Dou)*nus:

Lack o, reurns and di>idends o s*are*olders due o reducion in sock (rice

Dou)*nus are considered *i)*1calorie and un*eal*y

No muc* ,ocus on ad>erisin) cam(ai)ns

ron) com(eiors are Dunkin Donus and ar+ucks

Limied (roduc line Poor com(any mana)emen

*e com(any *as ,aced down,all in re>enues and loss in *e (as 3 years

Con,lics wi* ,ranc*isees


6/17

Inernal %acor >aluaion ;I%= Mari?:

'ey Inernal %acors ren)*s 0ei)* /ain) 0ei)*ed core! &,,orda+le (rice and sandard @ualiy "" 4 "36

2 Cusomers are o, all a)es and incomes ""8 4 "24

3 &racin) cusomers wi* *e EGo

Dou)*nus NowF si)n +oard

""5 3 "2!

4 9lo+ally e?(andin)J recenly in !6 ,orei)n

counries

"!" 3 "3"

$ Produc con>enienly a>aila+le a me)a1

c*ains and )as saions

"" 2 "!8

6 .erically ine)raed (roducs ""8 2 "!6

'ey Inernal %acors 0eaknesses 0ei)* /ain) 0ei)*ed core

5 Lack o, reurns o s*are*olders "!" 2 "2"

8 Lack o, di>idends o s*are*olders ""5 2 "!4

Lack o, ad>erisin) ""5 ! ""5

!" Closure o, ,ranc*isees due o con,lics ""6 ! ""6

!! Dou)*nus are considered *i)*1calorie and

un*eal*y

""8 ! ""8

!2 Down,all in re>enues and loss in *e (as 3

years

""6 2 "!2

!3 Poor com(any mana)emen ""$ 2 "!"

oal ! 222


7/17

ren)*s10eaknesses17((oruniies1*reas ;07= Mari?:

ren)*s 0eaknesses

! Brand reco)niion2 Produces @ualiy (roducs

3 ells 2" >arieies o, dou)*nus- o*er+akery iems and co,,ee

4 old a me)a1c*ains like 0almar and

ar)e and also a )as saions$ ?isin) worldwide wi* 3$ sores

locaions6 &,,orda+le (rice5 i)naure ori)inal *o )laed dou)*nus

! Dou)*nus are considered *i)*1calorie

and un*eal*y

2 *e com(any *as ,aced down,all inre>enues and loss in *e (as 3 years

3 Lack o, reurns and di>idends o

s*are*olders due o reducion in sock

(rice4 No muc* ,ocus on ad>erisin)

cam(ai)ns$ ron) com(eiors are Dunkin Donus

and ar+ucks6 Con,lics wi* ,ranc*isees

5 Limied (roduc line8 Poor com(any mana)emen

7((oruniies 7 rae)ies 07 rae)ies

! Inno>ain) is

(roducion line in *e

cae)ory o, *o

dou)*nus2 Increasin) sores a

air(ors and (erol(um(s in ,orei)n

counries3 Di>ersi,yin) is

(roduc line in >arious

cae)ories- ie- ice1

creams- ice1cream

cakes and +reak,as

meals4 ?(and domesically

$ Increase in co,,eeconsum(ion

6 Im(ro>emen in

auomaed o(eraions5 In>ol>emen in social

media markein)

! Do markein) on social

media a+ou *eir 2"

di,,eren >arieies o,

dou)*nus ;3- 75=

2 ?(and ,ur*er

domesically a(ar

,rom *e 3$ sores

world wide ;$- 74=3 Inno>ae is dou)*nu

and co,,ee ran)e +y

coninuin) o o,,er on

a,,orda+le (rices ;6-

7!=4 9e more cusomers

,or co,,ee consum(ion

+y o,,erin) a

con>enience sores and

! Producin) and

inno>ain) *eal*y

dou)*nus made o,

,ruis- nus- (roeins

and ,rui smoo*ies

;0!- 7!=2 9ain (ro,is +y

e?(andin)

domesically and

)lo+ally ;02- 74=3 Increasin) (roduc line

+y di>ersi,yin) ;05-

73=4 /esol>e dis(ues wi*

,ranc*isees +y

im(ro>in) is

o(eraions ;06- 76=$ Do a))ressi>e


8/17

me)a1c*ains ;4- 7$=$ Due o reco)niion in

*e marke- *ey can

di>ersi,y *eir (roduc

line ;!- 73=

ad>erisin) in order o

com(ee wi* Dunkin

Donus and ar+ucks

;0$- 75=

*reas rae)ies 0 rae)ies

! Geal* conscious

cusomers2 Many com(eiors ,or

e?am(le- Dunkin

Donus- McDonalds

and im Gorons

3 C*an)in) ases and(re,erences o,

cusomers- more

(re,erence owards

or)anic markes due o

lon) erm *eal* issues

like o+esiy and

dia+ees4 Local dou)*nu +rand

com(eiors

! Com(arin) wi*

com(eiors wi* *e

si)naure *o )laed

dou)*nus and *eir

cold dou)*nus ;5-

2=2 Pro>idin) +eer

@ualiy (roducs

com(ared o local

+rands in *e counry

;2- 4=

! Inroduce *eal*ier and

low1calorie (roduc

line in order o kee( u(

wi* c*an)in)

(re,erences o,

cusomers ;0!- 3=


9/17

rae)ic Posiion and &cion >aluaion ;P&C= Mari?:

%inancial Posiion ;%P= /ain) a+iliy Posiion ;P= /ain)

/eurn on in>esmen 2 Produc @ualiy 1!

Pro,i ! Demand >aria+iliy 12

Ne Income 3 Com(eii>e (ressure 13

Le>era)e 3 /isk in>ol>ed in +usiness 1$

Cas* ,low 2 Barriers o enry ino marke 1$

&>era)e 22 &>era)e 132

A1a?is 1!

Com(eii>e Posiion ;CP= /ain) Indusry Posiion ;IP= /ain)

Marke s*are 16 9row* (oenial 3

Produc @ualiy 1! Pro,i (oenial !

ec*nolo)ical know1*ow 13 %inancial sa+iliy 2Consumer loyaly 14 ase o, enry ino marke 2

&>era)e 13$ &>era)e 2

K1a?is 1!$

Direcional .ecor Coordinaes: y1a?is 1!- ?1a?is 1!$


10/17

15

16

1$

14

13

12

1!

"

!

2

3

4

$

6

5

-1.20

'ris(y 'reme Dou)*nus s*ould ,ollow a De,ensi>e srae)y as a resul o, *e P&C Mari?

*e srae)ies *ey s*ould ,ollow are:

o inroduce *eal*ier and low1calorie o(ions o *eir menu

Inno>ae and di>ersi,y (roduc line

9ain +ack *e con,idence o, s*are*olders +y s*owcasin) *e com(anys rue (oenial

and sren)* o )row in suc* a com(eii>e marke

ar usin) u(daed ec*nolo)y ,or (roducion

Boson Consulin) 9rou( ;BC9= Mari?:


11/17

0.090.10.110.120.130.140.150.16

-20%

-15%

-10%

-5%

0%

5%

10%

15%

BCG Matrix - KKD

rae)ies and lon)1erm o+eci>es:! ''D s*ould indul)e in markein) and ad>erisin) cam(ai)ns in order o arac

cusomers owards *eir si)naure (roduc line o, *o )laed dou)*nus w*ic* *ey

are well known ,or2 *e com(any s*ould ,ocus on e?(ansion in *e +ecause o, reco)niion and

resol>e dis(ues amon) ,ranc*isees and *ey can +e)in *eir ,ranc*isin) a)ain3 ocial media is a sron) way o ac*ie>e cusomers mainly *e eens and youn) crowd

*e +rand s*ould (ro>ide discouns and (romoions *rou)* *e inerne4 &s ''D is a well reco)nied +rand worldwide- *e com(any can in>ol>e in relaed

(roduc di>ersi,icaion +y inroducin) ice1creams- cakes- *eal*y o(ions like ,rui

smoo*ies- ec$ %ur*er *e com(any can also o( marke de>elo(men and (roduc de>elo(men

srae)ies in order o ac*ie>e marke )row* and inno>ae a >ariey o, (roducs o

o,,er o is cusomers


12/17

6 0*en ,ranc*isin)- *e com(any can e>aluae is o +e ,ranc*isees +y knowin)

w*e*er *ey *a>e +een an e?(erience under ,ood esa+lis*mens or ,ranc*ised ,ood

c*ains

5 Increase *e com(anys sren)*s in order o (resen *e com(anys (oenial o +e a

(ar o, *e sock marke and )ain +ack *e con,idence o, is s*are*olders8 o use *e >erical ine)raion arran)emen o, su((ly c*ains in order o *el( caer o

*e needs o, *e *eal* conscious (eo(le as well leadin) o an increase in (ro,is and

sales o de>elo( culure oriened (roducs in order o arac cusomers o, all a)es and

incomes- ,or e?am(le- McDonalds *e +rand *as cusomied is (roducs

de(endin) on *e culure ,rom counry o counry!" e>eral o*er recommendaions would +e re1desi)ned o, (acka)in) maerials-

inno>aion in e?isin) (roducs- includin) dou)*nus ,or *e ,esi>e or a (aricular

*eme +ased

rae)ies (lanned +y 'ris(y 'reme:

&ll sores are re@uired o *a>e a s(eci,ic (oin o, sale ;P7= sysem In addiion o (ro>idin) *e

a+iliy o mana)e on1(remises sales- *e P7 sysem (ro>ides *ead@uarers and (ermis sores o

communicae wi* eac* o*er

'ris(y 'reme also *as an ener(rise resource (lannin) ;/P= sysem *a su((ors +o* *e

,inancial and o(erain) needs o, *e or)aniaion m+edded wi*in *e /P sysem is a daa

ware*ouse *a also su((ors *e Com(any ores and '' u((ly C*ain

o ensure *i)* @ualiy- *e ,ollowin) *as +een insiued:


13/17

! o ensure ,res*ness- ruckloads o, *e main in)rediens are recei>ed on a re)ular +asis

2 ac* incomin) s*i(men o, in)rediens is esed

3 ac* +ac* o, mi? is esed

4 'ris(y 'reme also (roduces *e (rimary dou)*nu1makin) e@ui(men %ranc*isees are re@uired

o use suc* e@ui(men ;%red Da>id- rae)ic Mana)emen Conce(s and Cases- !3*diion=

Im(lemenaion o, recommended srae)ies:

! ores can +e ra(idly e?(anded +y o(enin) *em in con>enien areas w*ere mos o, *e

crowd is ,ound ie- malls- air(ors- (erol (um(s- ec2 C*oosin) a well e?(erienced candidae ,or ,ranc*isin)3 Because o, *e +rand reco)niion- ''D can iniiae ad>erisin) cam(ai)ns on *e social

media- .- radio and news(a(ers4 Producin) *eme +ased or ,esi>e season dou)*nus and c*an)in) *e (acka)in) a,er

e>ery ,ew mon*s$ ellin) *eir dou)*nus a *e me)a1c*ains worldwide would +e a )ood o((oruniy o

e?(and- ,or e?am(le- 0almar- Carre,our- 0airose- ec

%7/C&D B&L&NC G %7/ G A&/ 2"!6- 2"!5

%e+ruary !- %e+ruary 2-

2"!5 2"!6

;In *ousands=

&

C//N &:


14/17

Cas* and cas* e@ui>alens 6$-"" $3-""

/ecei>a+les 2-4 26-4$"

/ecei>a+les ,rom e@uiy me*od ,ranc*isees 8 84"

In>enories 2"-264 !8-$$"

De,erred income a?es 24-$4$ 24-$""

7*er curren asses 5-2!" 6-33"


15/17

C//N LI&BILII:

Curren (orion o, lease o+li)aions 4"! 388

&ccouns (aya+le !6-""" !6-4$"

&ccrued lia+iliies 3"-3"" 28-423


16/17

oal lia+iliies and s*are*olders e@uiy 363-$"" 342-"6!


17/17

/e,erences:

e?+ook re,erence:

rae)ic Mana)emen Conce(s and Cases- !3*diion +y %red / Da>id

0e+sie re,erence:

*(:##d!l)e8$2@owcloud,ronne#CI'1"""!!""25"#5!82d+6"1a$6d143d1$5a1

8ded83!2"c+$(d,

*(:##wwwnasda@com#sym+ol#kkd#,inancials@ueryincome1saemen

*(:##wwwwikiweal*com#swo1analysis:kkd

https://prezi.com/y_8bizxu7ct/copy-o!-"rispy-"reme-c#se-#$#ysis/

https://."rispy"reme.com/

https://e$.i"ipe&i#.or'/i"i/(rispy_(reme

Krispy Kreme Doughnuts - Strategic Case Analysis

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