Krispy Kreme Objectives

Krispy Kreme ObjectivesKrispy Kreme is a famous chain of donut and coffee tree turn up in all around the world. In 1937, Vernon Rudolph founded Krispy Kreme in Winston-Salem. Since then Krispy Kremes mission has been to provide the best service and highest- fictitious character products to customers. At first, Vernon Rudolph started his business by selling donut to near other stores. But in 1938, he opened the first Krispy Kreme store in Winston-Salem and began to sell donuts to customers. Today, Krispy Kreme wricks rapidly in international business with the opening of a weed of stores in Australia, United Kingdom, Asia and Middle East non to mention its franchise expansions.In this brass, we will discuss about Krispy Kreme strategies, the reason why Krispy Kreme need to revamp its experience dodging plans as well as the environmental factor that make up ones mind the union.PART IIObjective Case Question 1 rationalise Krispy Kremes strategic and operational plans.Every business needs a schema or at least an operational plan in order to grow and make more profits. Strategy is a plan for achieving objectives and following the mission statements. Strategic planning includes three planning level corporate, business and functional.In this case study, we will discuss about the expansion of Krispy Kreme Doughnuts. Since going public, Krispy Kreame has been a standout in America with more 300 stores in 44 states and expensed to other country much(prenominal) as Canada, UK, Mexico, Australia, Japan1This growth can be considered as both opportunity and threat. This is the opportunity of expansion in the final quarter of the year 2003, world(a) sales of Krispy Kreme doughnuts increased nearly 29% to 251.1 one million million million dollar. Company revenue, which includes sales from company stores, franchise fees and other operations rosebush more than 31% to 169.6 million dollar2. Even thought this expansion brought profits to the company, Krispy Kreme has downturn. One of the reasons is they opened too many stores in too little time and ship their doughnuts to a grocery stores everywhere and anywhere, diluted the appeal of its core product-The Original Glazed. When they sold their doughnuts to a grocery store, they would lose two important factors. First, the quality is not before good as when you eat them right as they come off conveyor belt at the retail store. Second, customers are too familiar with ceremonial occasion the doughnuts being made adds to magic of the product3. Krispy Kreme is also lack of advertising of their products and very weak menu. Another problem at Krispy Kreme is about franchises. The Krispy Kreme craze in the early 2000s drove millions of customers to stores, waiting in line for the cherished fresh glazed delicacies. As the result, the number of Krispy Kreme franchises increased very fast trying to go in the market. A upstart store may offer additional revenue to the home office, but the overall re sult is less profit for each undivided store owner. For example, between 2003 and 2004, second quarter revenues increased by 15%, but same store revenues had unaccompanied increased by 1 portion4. Beside doughnut, Krispy Kreme has been expanded into coffee business with the acquisition of Digital Java Inc. a coffee company in 2002. This acquisition met some strategic including eagerly inclination for provide a coffee experience for customers, as well as companys integration.The idea for selling coffee is wonderful, if the Krispy Kreme was consistent in its actions. Maybe there should be fewer stores with more ambitions put into them. Krispy Kreme could be a main competitor of Dunkin Doughnut with more chances to win customers back.PART IIIObjective question 2Why is Krispy Kreme facing the need to revamp its strategic plans?Obviously, Krispy Kremes strategic plan is to make money, on the dot like all business in the world. But having a wrong strategic plan can terminate the busi ness and that why we will find out the reason that Krispy Kreme is facing the need to revamp its strategic plans.One of the major competitors of Krispy Kreme is Dunkin Doughnut. In Dunkin Doughnut, managers everywhere continued to plod along, making the doughnuts and selling coffee. Someone even named it better than Starbuck5and actually more than haft of revenues of Dunkin comes from coffee business. People love Dunkin more than Krispy Kreme not only because delicious donuts but also its the rest of menu. So this is the one reason for Krispy to revamp its strategic plans, to sweep oar in their menu. Otherwise, they will lose their customers.Other reason for revamping strategic plans is about customers. In Australia, Krispy Kreme has 50 stores for 21 million people. Krispy Kreme failed to understand that in this country they needful to operate as a specialty retailer. People would travel to the store to buy a dozen of doughnuts. Sometime they travel by airplane fair(a) to buy a big bag of Krispy Kreme doughnuts. It suggested that the brand had a very strong novelty value in Australia. But how sustainable this level of indigence really was? Selling them by dozen is not appropriate for individual customer and customers cannot render differenced brand experience or amazing product.PART IVObjective question 3Was Krispy Kremes performance affected by the low-carb diets that were popular? Explain.In the face of growing consumer distaste for high-carb foods like bread and pasta, Krispy Kreme cut its full-year win forecast by 10 percent and said it would shut down or sell off operations ofMontana Mills Bread Co., a gourmet bread and pastry chain it bought last year .The low-carb diets are not affected too much to the company because in USA just 6 or 7 million people are on low-carb diet and most of American dont change the way their eat. The low-carb fad is certainly having an clash but there are a number of other things, such as its rapid store expansion and the low productivity in its new stores. The company has become increasingly dependent on selling doughnuts in grocery stores and other retailers. Dunkin Donuts may also be a problem for Krispy Kreme. Dunkin Donuts, which touts the quality of its coffee, sells a more diverse line of breakfast foods than Krispy Kreme, with bagels, muffins and breakfast sandwiches in addition to its own doughnuts.PART VObjective question 4Which counsel function is the focus of this case?(Chapter 1)In this case, Planning is the main function of management. It is the basic management function which includes formulation of one or more elaborated plans to achieve optimum balance of needs or demands with the available resources.6In the 1990s, Krispy Kreme grew rapidly to the national phenomenon with 366 stores in 44 states7all for selling doughnuts. This business strategy soon ran to the problem and downturn because they had too many stores to control, lack of advertising, cost increased in ingredient and franchises problem. In order to recovery from the crisis, Krispy Kreme have been deployed some strategic planning included add variable choices to its menu, advertising on TV and radio, produce healthier products and try to develop based on its own strength. Krispy Kreme become famous because of its signature Original Glazed Doughnut and the company try to take the advantage on that when they selling Glazed Doughnut only by a dozen. They know people loving it. But if they dont do something, they will lose their customers. The writer comment is Krispy Kreme should close unprofitable store as well as diversify and expand in product mix. Krispy Kreme potential still very big, they can win their customer back if they change their strategy into right path.PART VIObjective question 5To which environmental factor did Krispy Kreme attribute its problems, and to which environmental factor did psychoanalyst attribute the problems?(Chapter 2)The environmental factors that influence Krispy Kre me included customers, competitors, technologies and its structure.Krispy Kreme is a major competitor in eatery industry, well-known for its doughnuts. But by 2006, Krispy Kremes net loss was about $135.8 million and in 2007 it had cut back to 299 stores compared to 366 stores in 1990s. Krispy Kreme attribute the problems were low-carbohydrate and low-fat diets. A diet is external environment problem that still effect to Krispy Kreme today. Krispy Kremes core product Original Glazed doughnuts unluckily is very high-carbohydrate, reverse with customers demand of low-carb food. Even Krispy Kreme can see the problem about low-carb foods, they cannot change their technology to make healthier doughnuts because if they do that, their doughnuts wont have original taste anymore and can hurt their business even further.But that is what Krispy Kreme said. Besides that, there is more than one problem about Krispy Kreme. The analyst stated that Krispy Kreme have grown too fast but also low p roductivity in its new stores, too reliance to franchisors and grocery stores when Krispy Kreme only own 108 stores in 300 stores of Krispy Kreme. Another problem is since this is perfect competition market, there is no significant barrier to enter the market, Krispy Kreme faces with considerable competition from slight and largecompanies, especially Dunkin Donuts. They compete very hard in quality as well as price.PART VIIConclusionInclusion, every company sometime make a mistake in their strategies, what important is they can recovery and get experience through that mistake so that they wont recite that mistake. The Ex-Chief Executive Officer Daryl Brewster have done that by increased advertisements, expanded the product line. The new CEO James Morgan is bringing profits back to Krispy Kreme when revenues for Winston-Salem Krispy Kreme doughnuts rose by 6.3% to $87.9 million in its fiscal second quarter and net income rose to $2.2 million from a loss of $157.000 compared to a ye ar ago8.Although Krispy Kreme is not as profitable as the old time, managers of Krispy Kreme are trying their best to revive the company. Avoid expanding too fast again, grow slowly, learn something from their competitors and especially bear in mind to the customers are some of recommendations.By realize the problem and step-by-step begin to implement the right solutions, the KrispyKreme Doughnuts, Inc. can once again thrive in todays restaurant industry markets.