Krispy Kreme

SAMPLE CASE

PREPARED BY

MANAGAGEMENT AND POLICY

INTRODUCTION:

The inception of Krispy Kreme was back in 1933 , when Ishmael Armstrong , a farmer and store-owner in Paducah, Kentucky bought a doughnut shop from a French chef. With the purchase of the shop Armstrong received the rights to a secret yeast-raised doughnut recipe. Later on during that year Armstrong’s nephew Vernon Rudolph completed high school and from being a deliver boy for the doughnut shop to a partner. At this point though the doughnuts were still only being sold to area businesses. In the summer of 1937 Rudolph armed with the secret recipe and $25 dollars to rent the shop convinced a local grocery store to lend him the ingredients and he began making doughnuts. Eventually the popularity for the doughnuts grew. People began to walk the shop and asked if they could have a hot delicious doughnut so Rudolph cut a hole into the wall. Since this time Krispy Kreme has grown substantially, and in order to continue growth and more importantly success the company should evaluate its strength and weaknesses and set realistic goals.

CURRENT MISSION, GOALS, & STRATEGY:

Krispy Kreme will expand international with new stores projected for Canada and other countries shortly after. Krispy Kreme’s coffee program has improved. The newly enhance doughnut making technology will be an asset in bringing the hot doughnut experience they we are famous for too many more people.

INTERNAL ANALYSIS: See attached IFEM

Krispy Kreme is a weak company internally with an IFEM score of 2.06

FINANCE: A major strength of Krispy Kreme is that it has the financial strength to move forward with its strategic opportunities. However Krispy Kreme’s operating expense proves to be very high. Management needs to evaluate the excess in overhead.

MANAGEMENT: “LEAD BY EXAMPLE “ In many areas Krispy Kreme management leads with excellences. Krispy Kreme’s management and staff at their stores provides every customer with that a feeling that you are in a Norman Rockwell painting, that feeling from the late 1930’s when that first customer was handed his first deliciously hot doughnut in Winston Salem still rides through every Krispy Kreme shop in any city .

RESEARCH AND DEVELOPMENT: As times change trends do to Krispy Kreme needs to react to the latest American diets and healthier life styles. They need to offer a calorie conscious menu. This menu may prove to by an asset in expanded market share in the US but also in Europe where diets are also healthier.

MARKETING: Krispy Kreme’s great tradition needs to catch up with technology for successful marketing. An electronic campaign should be launched. Krispy Kreme should reach out to this generation via the internet. Krispy Kreme will soon use a web site for ordering doughnuts and merchandising.

EXTERNAL ANALYSIS: See attached EFEM

Krispy Kreme seems to be competing in a hostile environment as indicated by the EFEM score of 3.01.

COMPETITION AND THE INDUSTRY: The major completion is Dunkin Donuts. All other factor in the EFEM are factor KK can work on internally for example healthier menu choices.

TECHNOLOGY: Krispy Kreme’s manufacturing technology should maintain product turn around for internet sales.

ECONOMIC: The increase and minimum wage and the increase in fuel costs are two major factors impacting the cost of goods sold today.

STRATEGIC OPTION ANALYSIS: See the I/E, SPACE, TOWS and QSPM

THE I&E MATRIX: The I & E plot