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Krispy Kreme Analysis. ... Operations Analysis: Krispy Kreme is vertically integrated
with control in all stages of their business process. ...
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Submitted by smorgesborg on February 13, 2008
Category: Miscellaneous
Words: 919 | Pages: 4
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Name of Business: Krispy Kreme
Marketing Analysis:
Anyone who craves a hot doughnut, cup of coffee, or just carries curiosity toward the doughnut making process, will create the demand for this company. This demand does not appear to be seasonal, but may be somewhat cyclical due to the nature of the product. Most people do not view this product as a necessity, therefore when the economy falls short, the demand for Krispy Kreme could follow in its path.
In year 2000, Krispy Kreme announced that they will be going public and within one day were funded with nearly $500 million dollars. With this funding in place, Krispy Kreme set future goals to expand from 144 to 500 stores within a 5-year time frame, while also taking the company international. With this expansion in process, the company rapidly grew in sales from $220,243 (in 2000) to $665,592 (in 2004). The closest competition to Krispy Kreme is Dunkin Donuts, which actually is not as similar as one may assume. The majority of Dunkin Donuts sales are from their coffee; while Krispy Kremes glazed donut still holds 60% of their sales volume. One unique difference that puts Krispy Kreme at an advantage in their industry is the experience that comes with a visit to their "factory stores". All of these stores have a "doughnut theater" which allows customers to watch the donuts being made in-store. Each store provides between 4,000 10,000 dozen doughnuts per/day which are distributed to local grocery and convenience stores for further sales. Overall, the market position of this company is improving with rapid growth from 2000 to 2004. One concern lies in the first quarter of 2004 where there is a sudden decrease in net income and retained earnings, after an announcement from the CEO telling investors that earnings will be 10% less than expected due to the new low-carbohydrate trend.
Operations Analysis:
Krispy Kreme is vertically integrated with control in all...
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