Krispy Kreme Essay

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Case Discussion
Reflection 1
KKD seeks to appeal to everyone in their mission to slowly take on the fresh pastry market. Krispy Kreme is not one to limit a target of the public. According to Holland (2003), the company is equally loved by 5-year-olds and 75-year-olds alike. They are also enjoyed by whites, blacks, Asians, and Hispanics. New Englanders and Southerners love them as well as Californians and New Yorkers. Race is definitely not an issue. Only three types of people claim that they do not like Krispy Kreme: nutritionists, Dunkin’ Donuts franchisees, and compulsive liars.
Stan Parker, senior VP-marketing, says “no one looks at Krispy Kreme as a replacement for lunch or dinner. It’s a complement” (MacArthur, 2003). Krispy Kreme wishes …show more content…

The market has changed with the “No Carb/Low Carb revolution”, which has brought some havoc to the pastry industry has a whole. Robert Burgoyne of Burgoyne Investment Services is skeptical of Krispy Kreme on the stock market—he says that the stock if full of hot air. He thinks that it is a great company but that the stock is overvalued (Shook, 2002). He questions the company’s pricing power; how much is the public willing to pay for a dozen doughnuts?
Other skeptical analysts do not see much proven demand for Krispy Kreme outside of North America. “I’m not aware of other markets outside of North America where the reception to doughnuts would be a big hit. It’s a North American treat,” said Greg Schroeder, Fulcrum Global partner’s analyst. COO John Tate strongly disagrees with Schroeder. Tate said that Krispy Kreme is not looking at any countries where nobody has eaten a doughnut. Krispy Kreme would not go to a place where there is no demand, and a chain called Mr. Doughnut operates 11,000 stores in Japan (French, …show more content…

The unattributed writer thinks that the last thing one should want to do is buy a stock just because they like the store brand. Problems are brought about investing in any sort of retail. Krispy Kreme, a retail shop, is criticized in light of its valuation because there is little chance that KKD will ever be worth more than $28 per share (based on the discounted value of its future cash flows). Another issue for KKD is the fact that unique products do not remain unique eternally. The analyst said that some other company, notably Dunkin’ Donuts or Starbucks, could put out an imitation of Krispy Kreme and the magical power of the doughnut would be diminished (Morningstar Column,

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