Krispy Kreme

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Written Assignment
Krispy Kreme Doughnuts, Inc

I. Brief History

Vernon Rudolph is the brains behind the Krispy Kreme name. He bought a doughnut shop in 1933 and all the assets came along with the purchase, including a secret recipe and name, Krispy Kreme. Rudolph moved to Winston-Salem, North Carolina, where he opened his first Krispy Kreme shop. The business prospered and in the 1950¡¦s over ten other locations were opened. The business was able to produce 500 dozen doughnuts an hour. ¡§Revenues grew from less than a million in 1954 to $58 millions in 1974.¡¨(C-280) The company was bought out in 1976 by Beatrice Foods. This hurt the name and image of Krispy Kreme. Revenues began to fall and customers were not satisfied with the new owner¡¦s changes to the image of the doughnut giant. Then in 1982, new buyers decided to go back to the original image of Krispy Kreme and revenues again began to rise. Revenues gradually rose to $117 million in 1989 and then stayed the same over the next six years.

II. External Analysis
Economic Factors: studies were conducted to show that in the United States people consumed just about 10 billion doughnuts. Krispy Kreme is in a low cost industry, therefore a rise or fall in the market will not affect their revenues as significantly as higher priced luxury goods.
Technological Factors: Krispy Kreme has a doughnut theater where the doughnut making process is showcased. This gives customers a unique experience where they are able to watch the doughnuts being made. Krispy Kreme has recently introduced ¡§MyKrispyKreme¡¨ which is an internet based portal that connects management franchisees and Krispy Kreme vendors to each other.
Societal Values and Lifestyles: As of 2001, the diet and eating healthy craze did not have that much of an impact on sales as many thought it would. People still buy doughnuts as a way of giving themselves a treat.
Population and demographics: Krispy Kreme¡¦s corporate headquarters are located in Winston-Salem, North Carolina. They have 401 stores in operation. It is traded under KKD in the NYSE. They currently employ 3,913 employees.
Key Success Factors
Krispy Kreme is as efficient as they are in the business because they go by the motto that ¡§the key to expansion is to have control over each step of the doughnut-making process and be able...

... middle of paper ...

... Horton¡¦s is the doughnut giant in Canada. They are known for their other baked goods as well as doughnuts. ¡§MyKrispyKreme¡¨ allows the company to monitor inventory and investors can log on to obtain information about the company and news about the industry.
One thing Krispy Kreme needs to work on is diversifying their product. Competitors, such as Dunkin¡¦ Donuts¡¦, offer bagels, low-fat products, premium coffees, and newly cinnamon sticks. They offer these products to go with the changing times of the market. They remain to be the top competitor in the market because they are constantly changing their product line to suit their customers.
V. Recent News
Krispy Kreme will close outlets it has in Wal-Mart stores. The move was discussed on March 23, 2005. the reports say that the move is not due to KK financials. Sources say that Dunkin¡¦ Donuts¡¦ will be opening up in various Wal-Mart outlets throughout the United States in the future. There is also news that Krispy Kreme owes millions of dollars for their credit line. They were given an extension of time to pay off their debt before the company goes into bankruptcy.

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