Case Study: Strategic Analysis of Krispy Kreme Doughnuts - BUS400

This case study provides a comprehensive strategic analysis of Krispy Kreme Doughnuts (KKD). It begins with a SWOT analysis, identifying the company's strengths (affordable, high-quality products, and customer experience), weaknesses (negative equity, ineffective management), opportunities (product diversification, social outreach programs) and threats (competition). The study then applies Porter's Five Forces to assess industry rivalry, the threat of new entrants, substitutes, and the bargaining power of suppliers and buyers. The analysis culminates in strategic recommendations, including product line expansion, improved social media presence, global expansion, increased local presence, and financial resource development. The study suggests strategies such as cost leadership, improved promotional activities, enhanced customer service, and dividend distribution. Finally, the study proposes a strategic option focused on developing retail stores, increasing product variety, and expanding internationally, along with strategic objectives to increase growth rates, international footprint, and brand recognition, and suggests changes to KKD's vision and mission statements. The analysis is supported by several academic references.

Running head: STRATEGIC MANAGEMENT CASE STUDY
STRATEGIC MANAGEMENT CASE STUDY
Name of the Student
Name of the University
Author Note

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Answer to Question 1
Strengths – Krispy Kreme Doughnuts provides products which are affordable and
high quality in nature. The doughnuts provided by the organization are “one-of-a-kind” taste.
The market research has shown that the appeal of the company has extended to different
demographic groups which include income and age. The “hot shop” based stores of Krispy
Kreme Doughnuts are able to provide high levels customer experience. The vertical
integration based process has been helpful in ensuring the quality of products (Barros,
Hernangómez & Martin-Cruz, 2016).
Weaknesses – The assets of the organization, return based on equity have been
negative from the last twelve months and the skills shown by the management are also not
effective. The shareholders of KKD have not been provided with the effective amounts of
dividends and the stock prices have also started falling rapidly. Many stores of KKD have
started closing down due to which the organization is not able to keep up with the growth
rates (Daspit et al., 2017).
Opportunities – KKD is aiming at diversifying its products to different markets. The
levels of problem detection in the management has increased which has led to many changes
in the operations. The organization has the opportunity to develop programs which are based
on social outreach and promote different objectives that are customer based and are related to
the mission of KKD. KKD aims to reach the market in order to understand the customers and
their objectives in an effective manner (Demir, Wennberg & McKelvie, 2017).
Threats – High levels of competition in the industry and increase in global
recognition of the organizations like, Dunkin Donuts and Starbucks has affected the revenues
of KKD. The international presence of competitors in the industry has been a major threat to
the operations of KKD. The number of stores which of the competitors of KKD which

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operate in the confectionery industry are much more as compared to the organization. The
cash flows which are received by the organization are quite low (Durand, Grant & Madsen,
2017).
Answer to Question 2
Rivalry among the competitors – The high concentration levels of rivals including,
the local chains and organizations like, Starbucks, Tim Hortons, Dunkin Brands have
increased the levels of rivalry in a huge manner. Static levels of market growth, high costs
and perishable products in the range have been an important factor in increasing the levels of
rivalry within the industry. The competitors in the industry have also started competing for
similar types of products which are offered to the similar customers as well (Dyer et al.,
2015).
Threats based on the new entrants – The large requirements of capital for building
chain of stores is a major problem based on entry of new organizations. The market is also
lacking favourable locations for the organizations. Differentiation of the brand and products
which are offered by the organizations in the industry needs to high which becomes quite
difficult for the new entrants. The financial requirements for different individual stores are
quite high which is provides huge barriers for new organizations (Engert, Rauter &
Baumgartner, 2016).
Threats based on the substitutes – The choice based on alternatives which are
provided to the customers is large which include, cakes, energy drinks, ice-cream, chocolate
and biscuits. The consumers can thereby choose from various organizations that have their
operations in the industry and offer similar types of products as well. The full menu based
eateries are also able to provide tough competition to the organization based on products
which are provided to customers (Ethiraj, Gambardella & Helfat, 2018).

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Bargaining power of the suppliers – The business operations of Krispy Kreme
Doughnuts are vertically integrated in nature. The raw ingredients which are used for the
manufacture of products are commoditised. The organization also has huge number of
suppliers from which they need to choose and the switching costs are also low. The power of
suppliers with respect to the operations of Krispy Kreme Doughnuts is also quite low (Frynas
& Mellahi, 2015).
Bargaining power of the buyers – The industry consists of huge number of buyers
who are interested in buying the products. The buyers also do not have to incur any costs
based on the switching of organizations from which they wish to buy the products. The power
of buyers is thereby quite low in the market. Due to the availability of large number of
buyers, they are not able to influence the prices which are charged from them (Hill, Jones &
Schilling, 2014).
Answer to Question 3
First strategy – Krispy Kreme Doughnuts can increase its product line in order to
differentiate itself from the competitors which exist in the industry. This will serve as an
effective growth opportunity for the company.
Second strategy – Krispy Kreme Doughnuts can develop strategies in order to
improve the social media based operations in an effective manner. This will help the
company to reach the consumers faster and increase the presence of the brand as well
(Hubbard, Rice & Galvin, 2014).
Third strategy – KKD can make plans of increasing its global presence in order to
compete with the large multinational organizations that already operate in the industry.

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Fourth strategy – KKD can aim at increasing its presence in the local areas by
opening more stores all over the country and the attract the consumers (Karadag, 2015).
Fifth strategy – KKD needs to build the financial resources in such a manner which
will be helpful in the development of the organization and its expansion based plans as well.
Answer to Question 4
First strategy – The affordability levels of the products which are offered by Krispy
Kreme Doughnuts can be used in order to compete with the large multinational organizations
like Tim Hortons. KKD thereby needs to differentiate itself with the help cost leadership
based strategy.
Second strategy – The products of KKD are able to appeal to the consumers
belonging to different age groups. The organization thereby needs to improve the
promotional activities in order to reach consumers (Kasemsap, 2014).
Third strategy – KKD provides high levels of customer experience with the help of its
“hot shops”. The organization thereby needs to improve its services in order to increase the
appeal among consumers.
Fourth strategy – KKD needs to provide the required dividends to shareholders in
order to ensure that the organization can maintain its position in the industry. KKD can
provide the dividends to shareholders with the help proper resources and products (Meyer et
al., 2017).
Fifth strategy – KKD needs to increase the number of stores and also try to reach the
consumers with the help of online channels. The online channels will be able to provide
effective opportunities to the organization in order to reach the consumers.

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Answer to Question 5
First strategic option – This strategic option will be based on increasing the online
channels of the organization. The organization needs to develop its website in such a manner
which will be interactive in nature and will provide the products to consumers at their
doorsteps. The online operations of the organization will be able to increase the reach of
KKD to the different customers who are a part of the industry (Michael, Storey & Thomas,
2017).
Second strategic option – The second option is related to development of services
which are offered to the consumers in the factory stores of the organization. The factory
stores will be able to provide freshly made doughnuts and differentiate the operations of the
company from its competitors. Proper development of services is considered to be an
important part of the differentiation based activities of the organization. The service oriented
operations of a company are considered to be important factors which can affect the revenues
and profitability levels of KKD. Service provided to the consumers is considered to be a
major part of development of competitive advantage (Morschett, Schramm-Klein & Zentes,
2015).
Third strategic option – The third option is based on the ways by which the company
has started focussing on the development retail stores rather than the wholesale based
operations. The organization can thereby increase its retail presence in the industry with the
help of proper development of these stores. This option is related to the focus which is can
provided by the company on developing proper retail stores of KKD which can help in
competing with the others in the industry (Sakas, Vlachos & Nasiopoulos, 2014).
Answer to Question 6

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The strategic option which can be implemented by Krispy Kreme Doughnuts is based
on the development of retail stores all over USA and other countries as well. The
organization will be able to provide freshly baked doughnuts to the customers with the help
of these retail stores. KKD can also aim at increasing the number of products which are
offered to the consumers in order to attract them towards its stores (Simon, Fischbach &
Schoder, 2014). The competitors of the organization, like, Tim Hortons and Dunkin Brands
provide other products like coffee to the customers. KKD can thereby provide different types
of products to the consumers in order to compete with the variety which is offered by its
competitors. KKD will be able to increase the levels of revenues of the organization with the
help of high variety of products. The company will be able to increase its presence in the
industry. The international expansion will also be possible with the help of proper operations
of the retail stores in different areas of the world (Steinbach et al., 2017).
Answer to Question 7
Strategic objectives of Krispy Kreme Doughnuts
First objective based on the chosen strategic option of developing retail stores
of the organization is related to the increase in growth rates in the industry.
The revenue levels of the organization can also increase with the help of
proper retail stores of Krispy Kreme Doughnuts.
Second objective is related to the aim of increasing the international footprint
of the company in other areas of the world. The company can increase its
international presence with the help of the Asian market. The growth of KKD
will be supported effectively with the help of huge number of consumers.
Third objective is related to increasing awareness of the products and
improving brand recognition with the help of proper operations of retail stores.

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The company can also reach a larger group of consumers through the retail
stores.
The objectives which have been developed by the company need to be monitored
after implementation in order to ensure their effectiveness. Implementation of the first
objective can be monitored with the help of analysis of the financial resources which have
been gained by the company. Effectiveness of implementation of the second objective can be
monitored by analysing the progress which has been made by the organization in order to
start its operations in Asian countries. Effectiveness of the third objective can be monitored
with the help of proper analysis of the recognition levels of the brands as compared to the
competitors (Trigeorgis & Reuer, 2017).
Answer to Question 8
The vision statement which had been developed by the organization previously is
based on the aim of becoming a global leader in the production of doughnuts and further
creating moments as well. The change which can be made in the vision statement is based on
developing a proper recognition of the brand as compared to the competitors
(Krispykreme.com, 2018).
The mission statement which was formed by the company previously was based on
the warm memories and good times which can be provided to the consumers. The basic
qualities of the organization mainly include high levels of quality, caring service and
innovative ideas. The change which can be suggested in the mission statement of the
organization is based on the ways by which KKD can provide larger variety of products to
the consumers. The variety of products are based on the ways by which the organization is
able to attract the consumers towards its retail stores (Krispykreme.com, 2018).

8STRATEGIC MANAGEMENT CASE STUDY
Answer to Question 9
The stakeholders of an organization are able to play a key role in the ways by which it
is able to fulfil the strategic vision in an effective manner. Krispy Kreme Doughnuts can also
use the stakeholders in order to achieve the strategic vision. The customers are considered to
be the most important stakeholders of the organization who are helpful in achievement of
strategic vision. The suppliers of KKD can also play a key role in the ways by which the
organization is able to reach the strategic vision which has been developed. Timely supply of
raw materials is able to play a key role in development of the organization (Simon, Fischbach
& Schoder, 2014). The creditors can also act as an important stakeholder in the operations of
KKD and achievement of strategic vision as well. Creditors will be able to provide effective
financial resources to the organization in order to improve its operations.
Answer to Question 10
According to Sakas, Vlachos and Nasiopoulos, (2014), the organization needs to
engage with the stakeholders in an effective manner with the help of different types of
strategies. First major communication strategy which can be implemented by Krispy Kreme
Doughnuts in order to engage the stakeholders is based on the proper usage of online
communication based channels. The online communication based activities are helpful in
engaging the customers with the organization. The company will be able to connect with the
consumers and understand their needs with the help of this communication based strategy.
The online communication channels are also highly important for the connection which can
be developed with the stakeholders and thereby updating the operations of the company in an
effective manner as well.
As discussed by Michael, Storey and Thomas (2017), on the other hand, second
communication strategy which can be implemented by the company in order to engage the

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stakeholders is based on monitoring the feedback which is provided by the stakeholders. The
feedback of stakeholders will play a key role in the ways by which the organization will be
able to engage the stakeholders and reach the strategic vision as well. The feedback which is
provided by the other two major stakeholders like, creditors and suppliers is able to play a
major role in the operations of KKD and profitability based levels as well. The two
communication strategies which have been suggested to Krispy Kreme Doughnuts are based
on the ways by which the organization is able to engage the stakeholders within the
organizational processes. The stakeholders will further help in achievement of the strategic
vision effectively.

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