Krispy Kreme Doughnuts Krispy Kreme is a unique brand offering doughnuts. It is a pioneer in doughnut business, stared in 1933; by Vernon Rudolph bought doughnut shop in Paducah, Kentucky from Joe LeBeau. First, Rudolph started selling doughnuts to grocery stores. Soon after, people begin to stopping by the shop and pick up hot doughnuts. And the business begins to grow. The following is a SWOT analysis of the business case. Strength – The most dominant strength of Krispy Kreme doughnut is its Strong Brand name (Brand equity).
It has presence everywhere in the market like supermarkets, convenience stores etc. (Product Visibility). Vertical integration of supply chain strategy, ensure the product quality and consistency. HOT DOUGHNUTS NOW- Sign encourage people from outside to buy doughnuts and eventually increase the sales. Product diversification through acquisition strategy of Digital JAVA and Montana Mills for coffee and bread respectively. Market research shows appeals extend to all major demographic group including age and income.
Krispy Kreme has the first enter privilege and has a leadership position in doughnut business. Excellent modernized Training facilities is added advantage to Krispy Kreme Doughnuts. Weakness – Low product portfolio or less Innovation in products compare to Dunkin’ Donuts, Tim Hortons, Winchell’s Donut house and LaMar’s donuts where they have variety of doughnuts, coffee and other bakery product like Muffins, pies, bagels etc. No breakfast or lunch menu offered by Krispy Kreme. Random Closing and opening of new stores damaged the reputation of the company.
Krispy Kreme has weak business in international market. Franchise Buybacks and repurchase of stores shows an improper management. Opportunity – There is tremendous opportunity for food industry as people are more focused on diet. Krispy Kreme can produce Low calories or sugar free doughnuts (healthy Menu offering). Introducing product mix and product Line. Example: Mini rings 40% smaller than regular doughnuts. Market Penetration by Joint Venturing with other countries. Untapped domestic markets can be acquired.
Improve Franchise business since opening of company owned shop cost high. Online/Internet ordering. Threat – Competitors product portfolio are larger compare to Krispy Kreme Doughnuts. Proliferation of bakery department in supermarket squeeze out doughnut shops. Threat of New entries. Krispy Kreme have strong presence of competitors in international markets. Increasing awareness on low calorie food items and increased consumption of Low Carbohydrate, sugar-free foods item is a threat to doughnut. Large breakfast and dinner menu offered by competitors.
