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Krispy kreme market environment
Opportunities and threats for krispy kreme
Effects of the appreciation of chinese currency
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Summarize the business that you have chosen, and provide a two to three (2-3) paragraph justification as to why China would be a viable market for the selected business. Krispy Kreme employees around 4,300 employees and has the honor of being one of the only companies as of September 2014 that does not use oils from suppliers who do not destroy rainforests. Krispy Kreme was founded in 1937 in Winston-Salem, North Carolina. Krispy Kreme has not only become an American global doughnut company and coffeehouse it has also become a everyday go to internationally. Krispy Kreme has grown from the small rented building in what now historic old Salem in Winston,NC to a privately owned restaurant of over 1000 stores. February 24, 2015 was the opening …show more content…
It reflects that in November 2015 US $1.00 was being exchanged for 6.336 Chinese Yuan and increased daily. It can be understood from the graph that Chinese Yuan is a very unpredictable currency. With so much up down, this could potentially cause a risk. For that reason, closely analyzing the exchange rate becomes imperative. First, it is not as bad as it looks. China is still a closed economy. The government controls the foreign exchange rate. Nevertheless, one look at a USD-CNY chart and it is obvious that the Central Bank of China is worried about something. Rather it is a slow domestic economy or a worsening international one. The dollar has gone straight up against the Yuan since Feb. 18. The currency is now worth 6.12 to the dollar when a month ago it was around 6.04. A year ago, it was 6.22, so the Yuan continues to appreciate as the market expects, and as the government of China promised. Krispy Kreme is an ideal company for this market as it targets all classes. In addition, Krispy Kreme is a family oriental business that would fit wonderfully in the family oriental country of china. Furthermore, as already stated Yuan continues to appreciate as the market expects, and as the government of China promised, therefore China will be a great expansion for Krispy Kreme. Analyze the major exchange rate risks associated with transaction and translation exposure within the Chinese market. Based on what you have gleaned from your analysis, predict the major changes that you believe will occur in the next 24 months. Justify your
The business reason that led for China Noah’s potential currency exposure is the fact that the company wanted to shift its business of procurement of wood to Indonesia. The procurement that was to be moved to Indonesia was to be that of a large portion of raw materials. The company wanted to shift its procurement to Indonesia because the country had abundant wood resources, and since the market of the supply of tight wood was increasing in China every year the company had to look for more, raw materials. The company
4. To what extent, if any, have you and your co-managers adapted your company's strategy to take shifting exchange rates into account? In other words, have you undertaken any actions to try to (a) minimize the impact of adverse shifts in exchange rates or (b) capitalize on the impact of favorable exchange rate shifts? Why or why not?
The leading model, Monetary Model links exchange rate movements to the balance of payment, which is used for medium to long term analysis. The following assumptions cons...
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. Even Krispy Kreme's name brings a smile to people's faces.
A world without the Big Mac, Happy Meals, Chicken McNuggets, and the phrase “I’m lovin’ it,” is almost inconceivable. People around the globe have become accustomed to the high gleaming golden arches that make up the famous emblem for McDonald’s. McDonald’s has grasped the concept that culture flows from power. In this case, the American culture flows through the veins of this fast-food giant and the more that is supplied, the greater the demand. It is no secret that McDonald’s has become one of the world’s largest fast-food retailers. It has become a well known icon that has played a huge part in globalization, with chains located in many different countries… transforming the meaning of fast-food all around the world.
From the 1970s, there has been a wave of liberalization in China, which was introduced by Deng Xiaoping. This is one of the key reasons to the rise of China to be one of the economic giants in the world. In the last 25 years of the century, the Chinese economy has had massive economic growth, which has been 9.5 percent on a yearly basis. This has been of great significance of the country since it quadrupled the gross domestic product (GDP) of the country thus leading to saving of 400 million of their citizens from the threats of poverty. In the late 1970s, China was ranked twentieth in terms of trade volumes in the whole world as well as being predicted to be the world’s top nation concerning trading activities (Kaplan, 53). This further predicted the country to record the highest GDP growth in the whole world.
The purpose of this research is to provide a substantial assessment/explanation/analysis of the degree to which the McDonald’s operates based on a universal cultural or whether it is most strongly influenced by the national culture of that country. The researcher will explain how McDonald’s uses diversity and organizational initiatives to contribute to the corporate bottom line. Finally, the researcher will evaluate the company’s bottom-line rationale for diversity initiatives.
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).
Since I was about four years old I had an obsession with fast food: Krispy Kreme. My obsession takes me way back I can even remember everything growing up. According to my grandmother, whenever we drove by a Krispy Kreme when I was about four, I would say the word "doughnut" seeing the big red circle sign the words saying hot Krispy Kreme doughnuts now. And that is where it all started for me and my favorite type of sweet junk food. Krispy Kreme, in particular, had an influence on me growing up. I’m however, very passionate about American doughnuts. Most kids I grew up with were passionate about cheese balls, pizza, popcorn, and ice cream; I never seemed quite interested in those type of goodies. There has always been something that were completely irresistible to me about a little sweet glazed or fill doughnut and some hot chocolate .I am not sure if it is the way the chocolate iced glazed with sprinkles doughnut that caught my eye and attention or the way the original glazed doughnut smelted in my little mouth. I had gotten hooked from what seems like birth.
Taking into consideration all KKD's publics, it is no shocker that Krispy Kreme continues to grow. For the first time, it successfully expanded nationally during the late 1990s in California (Saltzman). A main point of Krispy Kreme’s continued financial success has been their expansion into international markets.
Other types of exchange rate risks are translation risk and so-called hidden risk. The translation risk relates to cases where large multinational companies have subsidiaries in other countries. On the financial statement of the whole group, the company may have to translate the assets and liabilities from foreign accounts into the group statement. The translation will involve foreign exchange exposure. The term hidden risk evolves around the fact that all companies are subject to exchange rate risks, even if they don’t do business with companies using other currencies. A company that is buying supplies from a local manufacturer might be affected of fluctuating foreign exchange rates if the local manufacturer is doing business with overseas companies. If a manufacturer goes out of business, or experience heavy losses, it will affect all the companies it does business with. The co...
... conclusion, to compete with the intense competition in today’s fast-food market, KFC China differentiates the company by being innovative. Three significant innovative strategies are localizing the menu, understanding the Chinese culture, and hiring local management. KFC demonstrates that one size fits all approach in the global market does not always work. Many typical Western approach to foreign expansion is to deliver the same products or services as their original establishment. For instance, Domino’s Pizza, an American restaurant chain, nearly failed in Australia due to the underestimation of the need to adapt their offerings to the local tastes. KFC China offers important lessons for global firms. It is essential to know that to what extend the company should keep the existing business model in emerging markets and to what extend it should be thrown away.
Globalization is the dominant force by which the world has become interconnected significantly as a result of extremely increased trade and decreased cultural differences. Globalization has made crucial changes in the production and trade of goods and services. The giant companies are now multinational corporations with subsidiaries in many countries. They are no longer national firms with their operations limited to the boundary of just one country. Such companies’ growth and operations are not constrained by any geographical, economical or cultural boundary. One of these multinational corporations is “Nestle”; that has gained world-class recognition in recent times. Nestle has made significant use of globalization in the last decade in the following manner-
According to The Star Online, up to 80% of the total group borrowings of RM7.49 billion were denominated in US dollar. Simultaneously, 8% of the total group borrowings were denominated in Euro currency. In other words, the total debt of the group that denominated in US currency worth at US$1.33 billion, approximately cost at RM5.91 billion. The total debt that denominated in Euro currency cost around €129.8 million, approximately cost at RM610.61 million. The high composition of debt in foreign currency caused the group extremely vulnerable to foreign exchange risk. A sensitivity analysis conducted by CIMB Research revealed that IOI could face RM148 million of loss or gain for foreign exchange translation risk with every RM0.10 rise/drop in Ringgit to US dollar exchange rate. Due to substantial losses on foreign exchange translation and fair value loss on derivative loss, the company predicted that the second quarter net profit of 2017 will be dropped by 98% to RM15.6 million, compared to the first quarter net profit recorded at RM703.7 million (Kok, 2017). Thus, foreign exchange risk is considered as high risk for
The foreign exchange market is one of important mechanism in the international business because foreign exchange is an intermediary for all nations in term of the growth of the economy. There are many functions of foreign exchange market in the global economy. In the international business, it uses the foreign exchange markets in four ways. First, the pay...