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Krispy Kreme Case Study

Essay by review  •  February 26, 2011  •  Case Study  •  720 Words (3 Pages)  •  598 Views

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. 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 1950ÐŽ¦s over ten other locations were opened. The business was able to produce 500 dozen doughnuts an hour. ÐŽ§Revenues grew from less than a million in 1954 to $58 millions in 1974.ЎЁ(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 ownerÐŽ¦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 ÐŽ§MyKrispyKremeЎЁ 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 KremeÐŽ¦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 ÐŽ§the key to expansion is to have control over each step of the doughnut-making process and be able to deliver hot doughnuts to customers as soon as they emerged from the frying and sugar-glazing process.ЎЁ(c-280) Krispy Kreme has done so well because they follow their beliefs that you must make the customers happy.

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