Strategic Planning and Market Analysis for KKD Doughnuts Company

This report presents a strategic planning analysis for Krispy Kreme Doughnuts (KKD), aiming to provide recommendations for market sustainability and increased profitability. It begins with an executive summary outlining the report's focus on market strategies. The report covers various strategic planning tools, including Competitive Profile Matrix (CPM), External Factor Evaluation (EFE) Matrix, Internal Factor Evaluation (IFE) Matrix, SWOT Matrix, SPACE Matrix, Boston Consulting Group (BCG) Matrix, Internal-External (IE) Matrix, and Grand Strategy Matrix. It assesses KKD's mission, vision, external threats and opportunities, internal strengths and weaknesses, and competitive positioning. The analysis provides a comprehensive evaluation of KKD's strategic position, offering insights into market dynamics, financial implications, and potential strategies to improve market share and profitability. The report concludes with recommendations for KKD to enhance its market performance.

Running head: STRATEGIC PLANNING
Strategic planning
Name of the university
Name of the student
Author Note

1STRATEGIC PLANNING
EXECUTIVE SUMMARY:
This report is going to forecast the market condition of the Krispy Kreme Doughnuts (KKD)
to sustain in the market by adopting various market strategies, which is described in this
report. This strategy can help the company to sustain in the market. The report recommends
three main strategies to KKD so that they can increase their market share by improving their
profitability. From the report, it can be observed that there is connection between the
recommended strategies and the developed strategies of KKD as further recommendations
have provided to achieve the actual strategies of the company. From the financial part of the
report, it can be seen that KKD is required to invest large amount of money for the
implementation of their strategies. With the help of the implementation of these strategies,
KKD will be able to capture more market share along with the improvement in profitability
position.

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Table of Contents
Introduction:...............................................................................................................................3
Step 1..........................................................................................................................................3
Step 2..........................................................................................................................................3
Step 3..........................................................................................................................................4
Step 4:.........................................................................................................................................5
Competitive Profile Matrix (CPM):.......................................................................................5
Step 5:.........................................................................................................................................6
External Factor Evaluation (EFE) Matrix:.............................................................................6
Step 6:.........................................................................................................................................7
Internal strengths and weaknesses:........................................................................................7
Step 7:.........................................................................................................................................8
Internal Factor Evaluation (IFE) Matrix:...............................................................................8
Step 8:.......................................................................................................................................10
SWOT Matrix:.....................................................................................................................10
SPACE Matrix:....................................................................................................................11
Boston Consulting Group (BCG) Matrix:............................................................................11
Internal-External (IE) Matrix:..............................................................................................12
Grand Strategy Matrix:........................................................................................................12
Quantitative Strategic Matrix (QSPM):...............................................................................12
Step 9........................................................................................................................................14
Step 10......................................................................................................................................15
Step 11......................................................................................................................................17
Step 12......................................................................................................................................18
Conclusion................................................................................................................................19
References................................................................................................................................20

3STRATEGIC PLANNING
Introduction:
The KKD Company is operating its business in various countries and for this it
essential to investigate the various strategies planning related to the company, which in turn
can help the company to implement various strategies and to implement this for competing in
the market (Ginter, Duncan & Swayne, 2018). Moreover, a financial calculation is done to
forecast the outcomes of this strategy in future. Hence, this report has made Competitive
Profile Matrix, External Factor Evaluation (EFE) Matrix, Internal strengths and weaknesses
and some other matrices.
Step 1
Krispy Kreme Doughnuts (KKD) does not have any published visions statements. The
main mission of the company is to satisfy the demands of their customers by providing them
with quality products and services.
In this context, the main objective of KKD is to satisfy the needs of the customers
with the assistance of collaborative team effort. The aim of KKD is to be the best in its
industry (Hitt, Ireland & Hoskisson, 2012).
The strategies of KKD are shown below:
 To fulfill the demands of customers by providing fresh doughnuts
 To transform the business by entering in smaller factory shops rather than
wholesale customers
 To promote the company’s local relationship marketing by raising more funds (Hitt,
Ireland & Hoskisson, 2012).

4STRATEGIC PLANNING
Step 2
The following discussion shows the new vision and mission statement of KKD:
As per the vision statement, the aim of the company will be t provide the customers
with joy and happiness through fresh doughnuts, music and art (Hill, Jones & Schilling,
2014).
In order to achieve this vision, the mission of KKD will offer fresh doughnuts with
good music and art at the same time. The company will offer a range of doughnuts to its
customers in affordable price. In addition, the collaborative team will always be ready to
provide quality services to the customers (Hill, Jones & Schilling, 2014).
Step 3
From the provided case study, it can be seen that KKD has some major external threat
and opportunities. They are mentioned below:
Threats
 The habit of healthy eating is a major external threat for KKD. It can be seen that the
people of United States and the globe have become more health conscious as they
prefer Low-carb diets to fast food. Apart from this, the government is also imposing
restriction on fast foods including doughnuts shops. It can affect both the profitability
and business opportunities of the company (Wheelen et al., 2017).
 Major fluctuation in coffee price is another external threat for KKD. Some major
aspects like droughts in Brazil, fungal infection in 2014 and deforestation has affected
the coffee prices. This aspect is contributing towards the loss of revenue of KKD
(Rothaermel, 2015).
Opportunity

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 The provided case study indicates that the global doughnuts market is looking
promising and it can be regarded as a major external opportunity for KKD. The main
reason contributing towards this opportunity is the increasing demand of doughnuts
all over the world (Wheelen et al., 2017).
Step 4:
Competitive Profile Matrix (CPM):
Krispy Kreme
Doughnuts
Dunkin’s Brands
Group
Tim Hortons Starbucks
Critical
Success
Factor
Weight Score Weighted
score
Score Weighted
Score
Score Weighted
Score
Score Weighted
Score
Brand
Reputation
0.25 3 0.75 4 1.0 3 0.75 4 1.0
Marketing 0.05 3 0.15 3 0.15 3 0.15 4 0.20
Product
Quality
0.25 4 1.0 3 0.75 2 0.50 4 1.0
Location 0.15 4 0.60 4 0.60 2 0.30 4 0.60

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Customer
Loyalty
0.10 2 0.20 2 0.20 1 0.10 3 0.30
Customer
Service
0.10 2 0.20 4 0.40 1 0.10 4 0.40
Product
Range
0.10 1 0.10 4 0.40 4 0.40 4 0.40
Total
Score
1 3 3.5 2.3 3.9
Here, weight is measured from 0.1 to 1.0, where less important factors related to
success of business is denoted with lower weight and higher weight is indicating most
important factors for achieving success. Moreover, scoring scale is measured between 1 to 4
where, 1 means major weakness and 4 represents major success, while 2 means minor
weakness and 3 means minor strength (Safiullin et al., 2014). Those ranks have helped to
rank critical success factors (CSF) of a company. According to total scale, based on CPM, the
Starbucks has captured the leading position in the market.
Step 5:
External Factor Evaluation (EFE) Matrix:
To construct this matrix, some external factors related to opportunities and threats, are
required, which can be obtained from the political, economical, social, technological, legal
and environmental (PESTLE) analysis, Porter’s five forces model or from Competitive

7STRATEGIC PLANNING
Profile Matrix (Budiono, 2017). Here, the EFE matrix is constructed based on CFM. After
analyzing the whole matrix, the average value can be obtained.
Opportunities Weight Rating Weighted
Score
Increasing population in most of the Asian
countries
0.03 2 0.06
Increasing number of investors 0.05 1 0.05
Increasing demand for fast-food items 0.05 3 0.15
Positive market environment outside of North
America
0.25 2 0.50
Threats Weight Rating Weighted
Score
Increasing cost of healthcare 0.20 3 0.60
Changing food habits of people 0.20 2 0.40
Different countries with different food habits 0.07 1 0.07
Political instability in some branches, worldwide
0.02 3 0.06
Economical stability rampant in some international
branches
0.07 2 0.14
Increasing tax rate 0.06 3 0.18

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Total weighted score 1.0 2.21
After identifying the chief external factors, they are assigned with respective weight,
which has range between 0 and 1.0 where 0 represents least important factor and 1.0
represents very important one. Here, the average value of this matrix is 2.21, which is high
compare to the lowest value, that is, 1. Hence, according this matrix, the company has a
better market position.
Step 6:
Internal strengths and weaknesses:
The company, through its business process, has earned some strengths and weakness
internally where internal strength can help the company to compete in the market by earning
excess revenue and also by enhancing its customers base (Chadwick & Dennis, 2017). On the
other side, internal weakness has influenced the company adversely for which the company
has experienced loss in market due to insufficient investment.
Strength: The KKD has considered its customers as the chief factor of their company.
Hence, they try to provide best customer service along with high quality of foods to satisfy
them. To create a strong brand value in domestic and international market, the company has
spent huge efforts to train their employees, properly (King & Miller, 2017). The company has
sold its products in different places, where the number of customers are high, for instance, in
gas stations, grocery stores, Walmart, convenience stores and other target stores, based on the
U.K. the products of the KKD are also available in some well-known retail shops,
international market. Moreover, the company has launched its products in many developed
and developing countries like Australia, Kuwait and Thailand and so on.

9STRATEGIC PLANNING
Weakness: The KKD does not set any vision for its company though business mission
is present. Business vision tells set a company’s future goal and for achieving this, a company
can set its future goal. However, for KKD, it is difficult to set a particular goal because of its
absence of vision.
Step 7:
Internal Factor Evaluation (IFE) Matrix:
Through IFE matrix, the KKD Company can evaluate its own internal factors, which
can further help the company to form new business strategies for its various functional areas,
for instance, marketing, operations, financial condition, human resources and accounts and
also some other factors on which the business procedure depends (Rezazadeh, Jahani,
Makhdoum & Meigooni, 2017). To understand those factors and its impact on the company,
it is beneficial to form a matrix with appropriate weight for each factor. Based on this average
value, the company can understand its position in market. The range of weight is varied
between 0 to 1 where the first one indicates less important factor and the last one represents
most important one for performing this business (Hatefi, 2018). With each weight,
corresponding raking for individual factor is also needed, which varies between 1 and 4.
Here, 1 indicates minor weakness of this business entity while 4 indicates major strength of
the one.
Strength Weight Rating Weighted
Score
Strong customer service 0.25 3 0.75
Strong business structure 0.15 2 0.30
Brand value recognition 0.10 4 0.40

10STRATEGIC PLANNING
Distribution centre 0.05 3 0.15
Increasing revenue from domestic and
international market
0.05 4 0.20
Weakness Weight Rating Weighted
Score
Income deficit by $ 4 million 0.10 3 0.30
Increasing amount of tax 0.15 2 0.30
Increasing amount of long-term debt 0.06 2 0.12
High inventory risk
0.03 1 0.03
Lack of managerial head 0.6 3 0.18
Total weighted score 1.0 2.43
The average value of IFE Matrix is 2.43, which is greater than the average value, that
is, 1. Hence, the company has possessed almost a strong position in market compare to other
firms, which provide same kinds of product in market.

11STRATEGIC PLANNING
Step 8:
SWOT Matrix:
This Strength weakness, opportunities and threats can help a company to understand the
market environment (Dlbokić, 2017). It is essential to analysis understand.
Strength Weakness
 Capture international market over 23
countries including the United
Kingdom and Australia
 Large number of factory shops to
display doughnuts production
 Company’s supply chain as the only
supplier of raw materials
 Controlling of product quality
efficiently
 Revenue hike by 90% during the
fiscal year 2015
 Company stores, international and
domestic franchises and KK supply
chain comprise company operations
 Absence of Chief Operating Officer,
Chief Administrative officer or Chief
Strategy Office within organization
structure
 Changing trends of food habits
 Limited verities of foods
 Insufficient information about
customer service
 Lack of customer amenities
opportunities Threats
 The chief selling product is
doughnuts while coffee is included
 Coffee price based on environmental