Krispy Kreme Business Analysis
To enter in other countries is affected by a lot of factors. To make the decision of enter in new countries, we consider, first, it should be in countries that are closeness to other countries which already Krispy Kreme is, and has be successful. For example, Krispy Kreme today is present in countries that are named in the case, and has be successful, as Mexico, Britain, Australia and Japan, so is very logical to think that open new stores in closeness countries, with similar culture, would be successful to. Another reason could be that if they are closeness o neighbour, probably a lot of people from the new country have been there before and tried Krispy Kreme and already know the brand.
Of course, this can’t be the only factor to enter in these countries, it has to be joined by a complete analysis of the market and economic potential, risks, political and social stability, purchase power, and today’s one of the most important, the image of United States in these countries, which may affect the development of Krispy Kreme.
The countries will be name by region:
Centre America: Considering the closeness to Mexico and Puerto Rico (US), and similar conditions we have:
1. Costa Rica
Western Europe: Considering the closeness to Britain, and similar conditions we have:
2. Ireland
3. Scotland
We don’t name in this region countries as France, Spain, Germany or Italy because they have a huge culinary culture, where the doughnuts are not very popular and would be very difficult to battle their local products. However, Krispy Kreme could enter there in a future based in the big amounts of tourist that they have, and already know and have tried Krispy Kreme.
Eastern Europe: Today, there are not Krispy Kreme stores in Eastern Europe, but it could be an attractive market to enter because their rapid economic growth and big amounts of tourist, considering to that this region is available to ask for franchises in the web page.
4. Czech Republic
5. Croatia
Asia: Considering the closeness to Japan, Hong Kong and Korea, and similar conditions we have:
6. Taiwan
7. Singapore
Oceania: Considering the closeness to Australia, and similar conditions we have:
8. New Zealand
South America: Here is a problem, because South America is not an option to ask for a franchise, at least, it does not appear in the web page any contact o where to ask for information. Anyway, we consider that there are at least two countries with good conditions to enter, and that based on the success of other similar American brands as Starbucks and Dunkin Donuts.
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Krispy Kremes's strong brand name, highly differentiated products, high-volume production capability and multi-channel market penetration strategy has worked well. With each new store opening there are lines waiting at the door all night to experience the Krispy Kreme quality. In Denver, more than 3000 people stood in a line extending for more than three city blocks on opening day. They have production areas in full view and a neon light that lights up when "Hot Donuts" are actually coming off the line. Krispy Kreme makes customers feel good about indulging.
When opening a business in an international realm, one must examine many factors including cultural differences and geographical locations. When opening a business in a foreign nation, one must examine the need for the product being offered, the acceptance of the product into the culture, and the most effective means of advertising. Disney opened its doors in Japan with much success; much of the success can be attributed to the Japanese culture being very fond of Disney characters. Disney decided to take the same methodology to Paris to open its new park in 1992, EuroDisney (Cateora & Graham, 2007).
Today, they have expanded lunch programs to a total of 4,150 stores and introduced the ability to warm pastries and provide hot breakfast sandwiches to stores across the nation. Starbucks retail stores are operated through a number of joint venture and licensing arrangements in South East Asia countries as well as Thailand, Singapore and China. When they do the business in foreign countries, the most important issues will have to be aware of the exchange rates. They are planning to open 2,400 stores internationally in 2007, and they have approximately set financial growth targets for total revenue 20 percent and annual earnings-per-share 20 to 25 percent for the next three to five years. In addition, they have proposed new stores count target to 40,000 worldwide (20,000 U.S. and 20,000 International) in the long-term (Starbucks Financial Release, 2007).
The aforementioned criteria were used to determine the ten most viable countries/regions for Krispy Kreme's international expansion. The list of countries/regions, presented in descending order, with especially attractive characteristics denoted adjacent to the apposite country, is presented in Table 1 on the following page.
The first Dunkin Donuts was opened in 1950 by founder Mr. Bill Rosenburg in Quincy, MA. Five years later the very first franchised branch was licensed. Sixty years later, under “Dunkin Brands Inc.”, there are now over 10,000 stores including more than 7,000 franchised locations, all in 36 of the United States. There are over 3,000 Dunkin stores internationally in 32 countries other than the United States. Dunkin' Brands Group, Inc. is one of the world's leading franchisors of quick service restaurants serving hot and cold coffee and baked goods, as well as hard-serve ice cream. Dunkin Brands is head quartered in Canton, MA (Company Snapshot).
President and Chief Executive of KremeKo, insures the public that they think long and hard before the considering expansion. He said, “Krispy Kreme doughnuts won’t suddenly become available everywhere because we don’t think that’s appropriate for the brand at this juncture in its evolution in the marketplace” (Krispy Kreme Steps up Wholesale Business in Canada, 2003,)
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accessories and equipment, a selection of quality teas and a line of compact discs. Starbucks has over 8,700 retail locations in North America, Latin America, Europe, the Middle East, the Pacific Rim and is continuing to grow. When coffee is considered Starbucks has developed a worldwide name for itself and has become a huge success.
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Business Environment – The firm is considered a coffee giant company that is a big brand in the business being able to expand aggressively in the market worldwide before it entered in New Zealand. But the business environment of this country is quite unimaginable for a US based company for it to venture without having a thorough marketing analysis covering all the risks in the venture considering the distance and the traditions which differs a lot in many countries thus making it very unique and incomparable. It is only when the company is able to come up with the correct strategy in entering the business that will make it thriving. Starbucks New Zealand entered the Kiwi market by way of franchise and joint ventures. They partnered with a very stable local business partner called The Restaurant Brands New Zealand Ltd. In this case, the company is able to hurdle the market barriers including business laws, taxation, physical set up, traditional and cultural differences that may come along the way. (Starbucks, 2012)
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