Strategic Report: Enhancing Krispy Kreme's Market Position

This report provides a comprehensive strategic analysis of Krispy Kreme Doughnuts (KKD), utilizing SWOT and Porter's Five Forces models to evaluate the company's strengths, weaknesses, opportunities, and threats within the competitive US market. The analysis identifies KKD's strengths, such as its unique hot doughnut offering and CSR activities, while also highlighting weaknesses like the absence of key executive roles and a narrow product focus. Opportunities for growth include expanding the product line to include coffee and healthy options, shifting towards a retail business model, and strategic acquisitions. The report also addresses threats from competitors like Dunkin' Brands and changing consumer health preferences, suggesting strategies such as cost leadership, product differentiation, digital marketing, and focusing on internal improvements to enhance market position. Desklib provides access to this and other solved assignments for students.

Running head: STRATEGIC PLANNING
Strategic Planning
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Answer 1: SWOT Analysis of Krispy Kreme Doughnuts (KKD)
The organization Krispy Kreme Doughnuts (KKD) formed in 1937 by Vernon
Rudolph is one of the major doughnuts producing organizations of the United States of
America (Krispykreme.com, 2018). More importantly, the concerned organization has been
able to attain a significant amount of success through the hot doughnuts which it offers to the
domestic customers and also the customers from 23 different nations in which it is
operational (Krispykreme.com, 2018). Beske, Land and Seuring (2014) are of the viewpoint
that an analysis of business environment is important since it not only offers an insight into
the key competencies of an organization but also an idea about the opportunities and the
threats offered by the business market. A SWOT analysis of the organization is likely to
reveal insightful details about the threats and the opportunities that galore the organization-
Strength  The primary strength of the organization can be said to the strategy of
the organization to not only manufacture the doughnuts before the
customers but also to offer them hot ones.
 The focus of the organization on the interests of the customers is
another strength point of the concerned organization.
 The use of corporate social responsibility (CSR) activities by the
organization like helping the local communities of USA during fund-
raisers and others is yet another strength point of the organization
which has helped it to attain success in the recent times.
 The use of innovative strategies like lighting up the boards of the
stores during the peak hours of business and others has also helped the
cause of the organization in a substantial manner.
Weakness  The lack of effective mission and vision statements is a major

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weakness of the organization.
 The absence of some important officials like Chief Operating Officer,
Chief Administrative Officer or Chief Strategy Officer is yet another
weakness of the company.
 The sole focus of the organization on the doughnuts business in a
highly competitive doughnuts business market of USA wherein other
organizations are resorting to the use of the coffee and beverage
business for the enhancement of their profit is another weakness of the
organization.
Opportunity  The organization in order to enhance the prospects of their business
can offer a wide range kind of products to the customers like coffee
beverages and others.
 The current focus of the organization is on the wholesale business
rather than on the retail business. Thus, it is likely that the
organization would be able to gain in a substantial manner by
resorting to the use of the model of retail business.
 Acquisition of rival companies like Jollibee Foods Corps is another
option or opportunity that the organization can utilize for the growth
of its business.
 Making the menu or the food products offered by the organization
more healthy and nutritious is another option which the concerned
organization can utilize.
Threats  The major threat which the concerned organization is facing currently
is from the competitors like Dunkin’s Brand, Tim Hortons, Starbucks
and others which have already monopolized the business market of

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USA.
 The increasing awareness of the customers regarding their health and
the kind of food products that they consume is another factor which is
adversely affecting the prospects of the organization.
Answer 2: Porter’s Five Forces Analysis of KKD
McCormack and Johnson (2016) are of the viewpoint that the business enterprises
need to have an idea about the kind of market competition that they are facing in the business
market of a particular nation which is likely to offer them an insight about the strategies they
need to use. In this regard, Porter’s Five Forces model is an important one since it offers
insightful information regarding the competition faced by an organization (Dodgson, 2018).
An analysis of the organization KKD on the basis of this model would reveal the following
facts-
Threat from new entrants The organization KKD had been in business for more than
80 years and the quality of the doughnuts offered by the
organization is being much appreciated by the customers
(Krispykreme.com, 2018). As a matter of fact, despite the
high competition that the organization is facing in the
business market of USA, the annual revenue growth of the
organization for the year 2013 was more than 6%. In
addition to this, the organization has been able to gain a
substantial amount of success in its coffee and other
ventures which it has recently started to enhance it
customer base. On the score of these factors, it can be said

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that the organization faces a very limited amount of threat
from the new entrants into the business market of the
nation.
Threat from substitutes The hot doughnuts which are prepared before the customers
had attracted many customers to this food item offered by
the organization. In comparison to this, it is seen that the
other organizations offer doughnuts to the customers,
which had already been prepared long before. More
importantly, the taste and the high quality of the doughnuts
offered by the organization are the two important factors
which has not only enabled the organization to earn the
satisfaction of the customers but also their loyalty as well.
Thus, it can be said that the organization faces a very low
level of threat from the substitutes.
Bargaining power of the
suppliers
The organization over the years had developed their own
supplier system (KK Supply Chain) which is imbued with
the responsibility of not only procuring the raw materials
which are needed by the organization but also for
delivering the doughnuts to the franchise stores and the
stores owned by the organization. As opined by Smink,
Hekkert and Negro (2015), the business of an organization
can get adversely affected if the bargaining power of the
suppliers associated with organization is high. In this
regard, it can be said that the organization developing and
also controlling its own supply chain had been able to

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mitigate this factor in a substantial manner.
Bargaining power of the
buyers
There are various options available to the customers for the
purchase of doughnuts like the ones offered by the
organizations Dunkin’s Brand, Tim Hortons and others.
However, taste is something which distinguishes the ones
offered by the organization from the ones. In addition to
this, the other organizations offer cold doughnuts to the
customers whereas KKD offers hot ones to the customers.
Thus, it can be said the bargaining power of the customers
is low despite having a lot of options and also having to pay
the same amount of prices for the doughnuts.
Industry rivalry The doughnut business of the USA is worth more than $13
billion however at the same time it is seen that the business
market has already been monopolized by the organizations
like Dunkin’s Brand, Tim Hortons and others. For example,
it is seen that the organization Dunkin’s Brand holds more
than 54% of the doughnut market share. More importantly,
it is seen that the organization in the recent times has
entered into the coffee business however this business
market is also being dominated by Starbucks which holds
more than 34% of the market share in USA. Thus, it can be
said that the organization faces a high level of industry in
the USA business market.

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Answer 3: Five strategies (external factors)
The five strategies that the organization KKD can use for effectively utilizing the
business opportunities presented by the business market of USA and also the mitigation of
the threats are listed below-
 The strategy of acquisition is a strategy which will help the organization to not only
reduce the high competition which it faces in the business market of USA but would
also help it to use the customer base of the rival organization it has purchased
(Prajogo, 2016). More importantly, it will enable the organization to increase its man-
power and the other resources of the rival organizations as well (Dyllick & Muff,
2016). Thus, it is likely that through the use of this strategy KKD would be able to
reduce the threat of competition.
 The modern customers are becoming very conscious about their health and thus it is
seen that in the nation of USA the doughnut industry is facing a decline (Grayson &
Hodges, 2017). However, to overcome this decline just like the organizations
Dunkin’s Brand, Tim Hortons and others, the organization can offer healthy food
products to the customers. This will ensure that the organization has a steady flow of
customers and thereby revenue.
 The organization in order to mitigate the adverse effects of the decline that the
doughnuts industry is facing currently can offer coffee, beverages and other similar
products to the customers just like Dunkin’s Brand, Tim Hortons and others
(Heasman & Lang, 2015). It is likely that the use of this strategy would help the
concerned organization to make up the deficit revenue because of the decline in the
industry.
 Shift from wholesale business to the retail business is another strategic option which
the organization has at its disposal that it can utilize for the process of their business

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operations (Saguy & Sirotinskaya, 2014). It is pertinent to note that the organizations
like Dunkin’s Brand, Tim Hortons and others have been able to gain a substantial
amount of success through the use of this policy. However, KKD since its foundation
has focused on wholesale business and in a way it can be said that this has limited the
prospects of the concerned organization in a substantial manner. Thus, it can be said
that the use of this strategy will not only help the organization to expand their
business but also to earn a higher profit as well.
 The use of digital marketing strategy is another option that the organization can use to
mitigate the adverse effects of the business competition. Through the use of the digital
marketing strategy, the organization will be not only able to promote their food
products in a much effective manner but would also be able to reach out to a much
larger customer base (Grant, 2016). This will also help the organization to increase
the sale of the food items offered by them since it is seen that the contemporary
customers are more influenced by the digital marketing campaigns rather than the
traditional ones like newspapers and others (Schaltegger, Lüdeke-Freund & Hansen,
2016).
Answer 4: Five Strategies (internal factors)
The five strategies that the organization KKD can use to effectively utilize the
strengths of their organization and also to overcome the weaknesses of their organization are
listed below-
 The organization in order to effectively capture the business market of USA can
utilize the strategy of cost leadership. It is pertinent to note that one of the key
strength points of the organization is the fact that it offers high as well as tasty
doughnuts to the customers. However, the price of the doughnuts charged by the

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organization is a major concern for the customers. The use of this strategy will enable
the organization to reach out to a larger customer base and thereby increase their
profitability.
 Use of the strategy of product differentiation is another option that the organization
can use for the process of their business. It is pertinent to note that there are many
organizations in USA which offer the same kind of doughnuts to the customers. The
organization can use this strategy to modify the taste as well as the quality of the
doughnuts offered by them to the customers (Barata & da Cunha, 2018). This will
enable them to have a larger customer base and thus facilitate the process of their
growth.
 Formulation of effective mission as well as vision statement which will not only
clearly state the objectives of the organization but also take into effective
consideration the perspective of the customers is another strategy that the organization
can adopt. The use of this strategy is likely to help the organization to position itself
in a much effective manner with the customers and thereby will increase their
profitability (Lee et al., 2015).
 Use of effective organizational structure is another strategy that the organization can
use for the process of the enhancement of their business prospects. (Cortimiglia,
Ghezzi & Frank, 2016) For example, it is seen that the organization does not have
Chief Operating Officer, Chief Administrative Officer or Chief Strategy Officer.
Thus, the appointment of these officers and the guidance that they would offer to the
organization are likely to help the organization in a substantial manner.
 The effective utilization of the strategy of CSR is another strategic option which the
organization has at its disposal. For example, it is seen that the CSR activities of the
organization are currently limited only to the fund-raisers for the local communities.

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However, the organization by helping the nation to address important issues and also
contributing towards the social as well as economic growth of the nation would be
able to earn a positive brand image which will in turn help it in the process of its
business (Crane & Matten, 2016).
Answer 5: Two strategic options which are relevant to the organization
Jackson and Singh (2015) are of the viewpoint that the prospects of an organization
depends to a large extent on the kind of business strategies that the concerned organization is
using for the process of their business. The organization under discussion here in order to
further enhance the prospects of their business and earn a higher profitability can use the two
below given strategies-
 The use of “omni-channel business strategy” is one option that the organization
under discussion here which it can use for the process of its business to attain a
higher level of growth. As opined by Silva, Sereno and Sobral (2018), the behavior
of the customers in the recent times has changed in a substantial manner and thus it
is seen that than taking the help of the “brick and the mortar” services offered by the
organizations they are increasingly turning towards the use of the e-commerce
services. Thus, it can be said that through the effective use of this business strategy,
the organization under discussion here would be able to offer “brick and mortar”
services to the customers and also the e-commerce ones as well. However, the
effective use of this business strategy would require the organization to only develop
its online apps but also to develop various departments like customer-care
department, delivery system and others through services to the customers who are
taking the help of the online services offered by it would be taken care of (Belasco,
2014). Recent researches have shown that the organization which use this business

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strategy for the process of their business have a far better chance of gaining success
rather than the ones that follow only the “brick and the mortar” system of business
(Silva, Sereno & Sobral, 2018).
 The “resource-based strategy” is another important strategy which the organization
under discussion here can use for the process of their business operations.
Rothaermel (2015) is of the viewpoint that the contemporary business enterprises
through the effective utilization of the resource based strategy can not only
effectively utilize the resources and also the capabilities of their organization but also
improve the quality of the products or the services offered by them to the customers
as well. Furthermore, using this strategy the organization can also develop its
capabilities and modify their business as per the demands of the business
environment. More importantly, the use of this strategy will enable the organization
to offer other kinds of products to the customers like coffee, beverages and others.
As opined by Bigliardi and Galati (2016), in the major of the cases, it is seen that the
effective utilization of this strategy can help the organizations to attain sustainability
as well. Thus, it can be said that the organization can gain in a substantial manner
through the effective use of this business strategy.
Answer 6: Best strategic option for KKD
The best possible strategic option that the organization can use to improve the
prospects of its business in the USA is the “omni-channel business strategy”. According to an
estimate, more than 93% of the people of the nation of USA use various kinds of online
technologies not only for the purpose of social networking but also for diverse kinds of online
transactions as well (Dodgson, 2018). Lee et al. (2015) are of the viewpoint that the lives of
the individuals, especially in nations like USA has become so busy that unlike the earlier

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times they do not get enough to visit the brick and mortar stores for the purchase of products.
It is precisely here that the “omni-channel business strategy” becomes important since it
offers the opportunity to the customers wherein they can get the things or the products that
they require at their doorsteps without having to visit the stores. However, at the same time, it
is also seen despite the technological advancements there are various individuals who still
like to visit the stores for the purpose of shopping. More importantly, one of the major
reasons for the success attained by KKD is the fact that they prepare the doughnuts before the
customers and also the customers can taste hot doughnuts. At the same time, it needs to be
said that the market leaders like currently can offer coffee, beverages and other similar
products to the customers just like Dunkin’s Brand, Tim Hortons and others in the doughnuts
business industry of USA are actively taking the help of this business strategy. Thus, it is
likely that the organization KKD would also be able to derive substantial amount of business
benefits through the effective utilization of this business strategy.
Answer 7: Strategic Objectives
As opined by Grayson and Hodges (2017), the effectiveness of a business strategy
depends to a large extent on the objectives with which they are being used and also the
control measure that is being used for the implementation and also regulation of the
concerned strategy. In the particular context of the organization KKD, the following are the
strategic objectives with which the organization can use the “omni-channel business
strategy”-
Strategic Objective Control Measure Justification for the use of the
control measure
KKD holds only 5% of the
doughnuts market share in the
The control
measure for the
The use of this control measure
will be an effective one since it