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Five Forces Analysis for Krispy Kremes.

Buyer Bargaining Power

Customers of Krispy Kreme doughnuts have a selection of options of who to buy doughnuts from and hence the buyer power is high. These providers are the main competition to Krispy Kremes and consist of Dunkin’ Doughnuts, Tim Horton’s and Starbucks. However, in America, Krispy Kremes have developed a quite strong customer brand loyalty by setting themselves apart and providing a unique experience for the customer. In the US Krispy Kremes stores show customers how their top selling favourite “Original Glazed” doughnut is made. This “doughnut making theatre” works to set Krispy Kreme apart from its competitors and attract customers to the fresh hot doughnuts provided by the company. They also work heavily on brand building exercises to develop a relationship with the public and potential buyers. These involve setting up “Friends of Krispy Kremes e-newsletters” and sponsoring local events.

The fundamental ingredients needed to make doughnuts are readily available to the public and hence buyer competition threat can be said to be present as  

Supplier Bargaining Power

Krispy Kreme is quite independent with regards to supply provision and hence supplier power is relatively low. Their Kripsy Kreme Supply Chain produces both the doughnut mixes and manufactures the doughnut making equipment needed in factory stores. There are no multiple supplier relationships between KK and external suppliers; hence there is one ordering and delivery system for store operators. This allows stores to focus on the running of the store and is a convenient system. This also means that Krispy Kremes makes revenue not only from the sale of their doughnuts but also of doughnut making equipment, doughnut mixes, ingredients and supplies to their franchises.

The KK Supply chain also produces and supplies the doughnut mix which means that quality can be controlled and assessed to meet standards. KK also have distribution...