Krispy Kreme Doughnuts Inc Case Study

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Krispy Kreme Doughnuts Inc Case Study

Summary

In this SWOT analysis, I will delve into the strengths, weaknesses, opportunities, and threats that affect the Krispy Kreme Doughnuts Inc. Krispy Kreme is a highly successful company, whose main product, not surprisingly, is doughnuts. The company went public in 2000, and saw a hugely successful increase in share price immediately after.

Vernon Rudolph founded the Krispy Kreme company in 1937 in Winston-Salem, NC. The company has since become a leading specialty retailer. They produce over 4 million doughnuts each day, with over 1.8 billion doughnuts produced each year.

Krispy Kreme has company-owned, as well as franchised stores. They sell doughnuts in retail stores, supermarkets, convenience stores and other retail outlets. Krispy Kreme's best-known product is the fresh, glazed, yeast doughnut, called the Hot Original Glazed. Krispy Kreme also produces over a dozen other varieties of yeast and cake doughnuts.

SWOT analysis

Strengths

Krispy Kreme's biggest strength is in its product. It is best known for its best known for its fresh glazed, yeast-raised doughnuts, made from a secret recipe. The doughnuts are highly popular throughout North America, and have a mass appeal that is based largely on word of mouth and superior product.

Interestingly, Krispy Kreme's doughnuts are so popular that Krispy Kreme is able to generate a media frenzy without using major or national advertising. Certainly, this is a major advantage to the Krispy Kreme company, as it greatly reduces the cost of advertising to the company.

As a result, the company saves major dollars each year in advertising, leading to increased profit margins. Certainly, the company's superior product and s...

... middle of paper ...

...ited States and abroad. Chief among the company's strengths is their highly effective use of word of mouth advertising. One drawback of word of mouth advertising is that any moves into foreign markets will have to rely on new, potentially expensive marketing strategies, rather than the inexpensive, word of mouth marketing strategies that Krispy Kreme has employed in local markets.

Further, the Krispy Kreme company faces several threats, including competition within both the United States and Canada, the potential that the doughnut market is saturated, and potentially increasing costs of real estate that may prohibit new franchises. Interestingly, the highly successful company has several opportunities for expansion both within the United States and abroad.

References

Krispy Kreme. Investor Relations. 14 April 2002. http://64.29.220.236/investorrelations.html

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