Running head: KRISPY KREME DOUGHNUTS, INC.: A CASE ANALYSIS
Krispy Kreme Doughnuts, Inc.: A Case Analysis
October 09, 2009
Table of Contents
II. Table of Contents 2
III. Executive Summary 3
IV. Situational Analysis 5
A. Environment 5
B. Industry Analysis 5
C. The Organization 7
D. The Marketing Strategy 9
V. Problems Found in Situational Analysis 10
A. Statement of primary problem. 10
B. Statement of secondary problem 12
C. Statement of tertiary problem. 13
VI. Formulate, evaluate, and record alternative course(s) of action 14
A. Strategic Alternative 1 14
1. Benefits 14
2. Costs 15
B. Strategic Alternative 2 ...view middle of the document...
The idea of making all of the shops look the same, so that they would be recognized by patrons wherever they traveled, as well as the viewing windows for watching the doughnuts being made, were good examples of marketing promotional strategies. These strategies are still considered by Krispy Kreme to be “Brand Elements” as reported in current, annual financial reports. By keeping control of the recipe and the doughnut-making process, they also maintained product standards and reduced, while not completely eliminating, the competition through the uniqueness of their product. In fact, attempts to change the recipe, or even the look of the shops, in later years met with negative reactions from customers and the company quickly returned to the original taste and feel of the “original” Krispy Kreme.
The company and its doughnut became synonymous with a particular look, taste and feeling. This emotion that became associated with Krispy Kreme, described as “a feel-good business” and one that “created an experience” as opposed to just selling doughnuts (Peter and Donnelly, 2007), became the core of the company’s marketing strategy, and just maybe, one of the prime reasons for its subsequent struggles in the early 2000’s. Selling a “feeling” or “experience” can be a successful marketing tool. But that’s just one of the tools that a successful marketing plan must encompass. The company must also be prepared to grow with the times and change with that growth. That is, the marketing strategy of one time and place may not necessarily translate and/or work in another. Financial systems of one era will not suffice for another and in this age of advanced access to information, inaccuracies can be extremely damaging to investor confidence.
This analysis of the Krispy Kreme Doughnut, Inc. case study will attempt to uncover some of the reasons for the company’s challenges, suggest some potential strategies and possible solutions as well the steps for implementing those strategies.
Krispy Kreme Doughnuts, Inc. was founded in 1937 and is headquartered in Winston-Salem, North Carolina. Krispy Kreme is a major competitor in the restaurant industry, known primarily for its donuts. Near the end of 2004 and the beginning of 2005, the economy began to slow. Other business in competition with Krispy Kreme began to crowd into its market and expansion plans that Krispy Kreme had projected had to be scaled back due to falling sales. Consumer interest in reduced carbohydrate consumption, including ,but not limited to, the interest in and popularity of low carbohydrate diets, such as the “Atkins” and “South Beach” diet plans have been blamed for declining sales in pre-packaged (grocery store) donuts.
2 Industry Analysis
Their leading competitors are “Dunkin Donuts”, with worldwide sales of $2.7 billion (2002) 5200 outlets worldwide and a 45% market share based on dollar sales volume,...