Krispy Kreme Is A Chain Of Doughnut Stores

Published Date: 02 Nov 2017

Krispy Kreme is a chain of doughnut stores. Its parent company is Krispy Kreme Doughnuts. Inc, based in Winston-Salem, North Carolina, United States.

Krispy Kreme sells doughnuts, among them glazed doughnuts, served warm. Krispy Kreme doughnuts are sold in supermarkets, grocery stores, convenience stores, gas stations, Wal-Mart and Target stores in the US; Loblaws supermarkets and Petro-Canada gas stations in Canada; Woolworths supermarkets in Australia, and Tesco supermarkets, Tesco Extra and Moto service stations in the UK.

Krispy Kreme’s mission:

1To touch and enhance lives through the joy that is Krispy Kreme.

Krispy Kreme’s Vision:

2To be the worldwide leader in sharing delicious tastes and creating joyful memories.

In this particular case study, we are going to find out strategic and operational plans of Krispy Kreme, why is Krispy Kreme facing the need to revamp its stragetic plans, and whether Krispy Kreme’ performance was affected bay the low-carb diets that were popular? etc

PART II

Objective Case Question 1

Explain Krispy Kreme’s strategic and operational plans.

3Strategic planning is the process of developing a mission and long-range objectives and determining in advance how their will be accomplished

The strategic plan of Krispy Kreme Doughnuts is to produce hot, fresh doughnuts that a customer can receive right off of the assembly line. They create business through sales at company-owned stores, royalties from franchised stores along with franchise fees, and selling franchised stores pre-made doughnut mixes and doughnut making equipment. They created sales volume from both on-premise sales at Krispy Kreme stores and off-premise sales at supermarkets and convenience stores. Krispy Kreme attempts to win their market share through superior doughnut quality and vertically integrating back into their company to generate sales in coffee and other beverages.

4Operational planning is the process of setting short-range objectives and determining in advance how they will be accomplished.

The operational plans of Krispy Kreme such as [5] a pilot project in Mountain View, California, to sell doughnuts through car windows and sunroofs at a busy intersection (with wireless payment) in 2003. Asside from it, through the acquisition in fiscal 2002 of Digital Java, Inc., a small Chicago-based coffee company, Krispy Kreme acquired significant coffee roasting expertise. Subsequent to the acquisition, Krispy Kreme relocated the operations to a newly constructed coffee roasting facility at our Ivy Avenue plant in Winston-Salem, NC, which became operational in fiscal 2003. Krispy Kreme has formulated a complete beverage program including four drip coffees, a complete line of espresso-based coffees including flavors and both coffee-based and noncoffee-based frozen drinks. Krispy Kreme introduced the first component of this program, the drip coffee offering, to our stores in fiscal 2003, replacing the previous product which was purchased from an unrelated third party. As of February 2, 2003, the operation was supporting the new, full beverage program in approximately 70 Krispy Kreme locations, most of which are new stores that opened with the full program. Krispy Kreme believe its new beverage program presents an opportunity to:

– Ensure a high quality product offering

– Increase beverage sales through an expanded product offering

– Enhance profitability as a result of the higher margins associated with beverage sales.

PART III

Case Objective Question 2

Why is Krispy Kreme facing the need to revamp its strategic plans?

Krispy Kreme Donuts started strong with a good brand, strong financials, key niche recipes, and a growing industry. However, recent trends in consumer preferences, strategic and business model failures, have forced Krispy Kreme to reconsider its current strategy. And the reason is:

First, the company expanded too fast, and the Krispy Kreme mystique was lost when the stores began to become ubiquitous.

Second, consumer preference trends have shown that high-fat food purchases may be declining due to health concerns.

Third, traditionally product focused companies have been unable to maintain a sustainable competitive advantage of Krispy Kreme.

Fourth, Krispy Kreme’s services, Krispy Kreme’s rapid store expansion which mean overheated growth, caused the uncontrol of services, such as out of stock of dounghnuts and the mistake in delivery etc.

Fifth, higher gas prices, low-carb food from another competitor, were very popular at that time.

Sixth , the low productivity, the limit of products, and Krispy Kreme’s increased reliance on sales in grocery stores also is the major reasons.

Seventh, competitors such as Dunkin Doughtnut etc.

Other factors also are affecting this organization. Gasoline prices have gotten so high that people are no longer willing to drive to the doughnut shop. Increasing fuel costs also driving up the company's transportation costs and driving down profits. Doughnut sales in grocery stores are falling, too, because the supermarket chains that sell Krispy Kremes are losing shoppers to Wal-Mart.

PART IV

Case Objective Question 2

Was Krispy Kreme’s performance affected by the low-carb diets that were popular? Explain.

The increasing of low-carb diets effected Krispy Kreme’s performance, it is a hit to the Krispy Kreme’s reputation and consumption. Since the day Krispy Kreme was born, it have only product high-carb doughnuts, now with the increasing of low-carb foods, Krispy Kreme was facing the reducing of consumption. Because consumer preference trends have shown that high-fat food purchases may be declining due to health concerns. So Krispy Kreme’s doughnut was accidentally accused as a major cause for people’s health. And, to add the icing to the cake (or the donut) all the low-carb diets have also caused people to give up doughnuts.

PART V

Case Objective Question 3

Which management function is the focus of this case?

First, planing is one of the management functions focus on this study case. [6] Planing is the process of setting objectives and determining in advance exactly how the objectives will be met. The planning dimension focus of this case is upper-level management, tragectic, broad long range single use. To be successful, organizations need a great deal of planning. But sadly, Krispy Kreme had failed in its trategic planning, so it had to revamp its strategy.

Second, organizing is also focused on this case. Because of the inffective organizing, Krispy Kreme failed in productivity, delivery, advertising etc. Krispy Kreme also failed in maintain its store in New England, Arizona, Texas etc. Krispy Kreme failed in coordinating its advange and allocating its resources to achieve its objectives.

PART VI

Case Objective Question 5

To which environmental factor did Krispy Kreme attribute its problems, and to which environmental factor did analysts attribute the problems?

Krispy Kreme attributed its problems to:

Technology: the low-carb diet and healthiereating fads, which were very popular at this time and till effect its performance today, affect to Krispy Kreme’s ansumption, have also been a main reason that caused people to give up doughnuts.

Competion: with the increasing of low-carb diet and healthier eating fads. The Krispy Kreme’s competitor also grew too fast. Krispy Kreme has tranditionally offered only its very sweet glazed donuts, although Krispy Kreme has added some special items, but Dunkin Doughnut focus on growing on its coffee and other food businesses, such as bagels, sandwiches, and pastries.

Customers: Krispy Kreme blame to its customers, who used love eating Krispy Kreme doughnuts, affair of getting fat and desease.

Analysts attributed Krispy Kreme’s problem to:

Systems process: the stagnation in productivities, delivery, etc of Krispy Kreme, its increased reliance on sales in grocery stores also a main problems. And also the limit of products, Krispy Kreme only focused on sweer glazed dounghnut when the other competitor tried to increase their productivities and ansumption by focusing on produce healthier eating fads such as sandwiches etc. Also the rapid expansion of Krispy Kreme was one of the main cause for its problem.

PART VII

CONCLUSION

Krispy Kreme doughnut, a chain of doughnut strore. The strategic plan of Krispy Kreme Doughnuts is to produce hot, fresh doughnuts that a customer can receive right off of the assembly line. One of  the operational plan of Krispy Kreme is franchising, its allow Krispy Kreme expand fast, but it is also major cause of Krispy Kreme in stragetic and operational planning. There are many reasons which lead to the revamp of Krispy Kreme’ strategic plans, such as productivities, delivery or the limit of Krispy Kreme’ products, Krispy Kreme also caught many problems in it system process, about its organizing or controlling, strategy against its competitors. etc.

Krispy Kreme, in its revamp, has to reorganize its system process, strategic plans, Krispy Kreme should focus on a is sevices anh of couse its products and leverage joint ventures with tangent product companies in order to boost revenue and increase customer value.  Krispy Kreme should also consider divesting international operations in order to focus resources on rebuilding its market. We must focus on better management and social improvement programs in order to boost consumer, investor, and public opinion about our brand and ethical practices.

PART VIII