Krispy Kreme Donuts has listed the following as its current objectives:

1. Reduce the investment required to produce a given level of sales and reduce operating costs by operating smaller satellite stores instead of larger, more expensive factory stores .

2. Achieve greater production efficiencies by centralizing doughnut production to minimize the burden of fixed costs.

3. Achieve greater consistency of product quality through a reduction in the number of doughnut-making locations.

4. Enable store employees to focus on achieving excellence in customer satisfaction and in-shop consumer experience.

5. Stimulate an increase in on-premises sales of doughnuts and complementary products by increasing the number of retail distribution points to provide customers more convenient access to the company’s products.

Regarding strategies, the Form 10-K filed April 17, 2012 notes a few:

1. Open up new (or convert traditional factory stores to) "hot shops" that provide a hot doughnut experience for customers throughout the day, instead of the traditional experience of having the hottest, freshest doughnuts available only at certain times of the day---these "hot shops" would be added to the traditional fresh shops and kiosks as the primary methods for market penetration while reducing operating costs.

2. Open up new company-owned satellite stores for additional market penetration.

3. The company also plans to extend its testing of soft serve dairy products into additional locations in fiscal 2013 as part of its product development.

4. Close stores that are not performing to company standards.

Vision

Krispy Kreme Donuts "Vision and Values" can be found on their web site (http://investor.krispykreme.com/includes/stupop.html).

"We Believe...

· Consumers are our lifeblood, the center of the doughnut

· There is no substitute for quality in our service to consumers

· Impeccable presentation is critical wherever Krispy Kreme is sold

· We must produce a collaborative team effort that is unexcelled

· We must cast the best possible image in all that we do

· We must never settle for 'second best'; we deliver on our commitments

· We must coach our team to ever-better results"

Vision Statement

From Krispy Kreme Donut's "Vision and Values" provides the following Vision Statement: "To be the global leader in doughnuts and complementary products, while creating magic moments worldwide."

Competitive Profile Matrix (CPM)

		Dunkin' Donuts	Starbucks	Tim Hortons
Critical Success Factors	Weight	Rating	Score	Rating	Score	Rating	Score
Advertising	0.11	4	0.44	3	0.33	2	0.22
Product Quality	0.15	3	0.45	3	0.45	2	0.30
Product Diversity	0.08	2	0.16	1	0.08	2	0.16
Price Competitiveness	0.08	3	0.24	2	0.16	3	0.24
Management	0.10	3	0.30	3	0.30	2	0.20
Financial Position	0.10	3	0.30	2	0.20	3	0.30
Customer Loyalty	0.10	4	0.40	3	0.30	3	0.30
Global Expansion	0.13	3	0.39	4	0.52	1	0.13
Market Share	0.10	3	0.30	3	0.30	1	0.10
Sales Distribution	0.05	2	0.10	3	0.15	2	0.10
Total	1.00		3.08		2.79		2.05

1. Analysis: Please analyze the information presented above and discuss what conclusions you can draw from this information.

External Factor Evaluation (EFE)

Key External Factors	Weight	Rating	Weighted Score
Opportunities
1. Families crave convenience because of busy lifestyles	0.08	3	0.24
2. Asians love sweets and are open to trying foreign foods	0.05	2	0.10
3. Starbucks lacks a diversified and distinctive pastry line	0.10	3	0.30
4. Dunkin' Donuts does not have hot doughnuts to sell	0.07	4	0.28
5. Many children love sweet treats	0.03	2	0.06
6. Tim Hortons has yet to expand beyond the U.S. and Canada, and its product line does not appear to be competitive	0.04	2	0.08
7. South America, Africa, and Southern Asia are markets to conquer	0.09	1	0.09
Threats
8. Dunkin' Donuts presently dominates the doughnut market, particularly in northeastern U.S.	0.12	1	0.12
9. People are becoming more health-conscious, which does not bode well for high-sugar, high-fat treats	0.08	2	0.16
10. Starbucks has approximately 25 times the amount of stores worldwide that Krispy Kreme Donut has	0.08	1	0.08
11. Restricted cash flow from banks and massive layoffs have stifled the world economy, decreasing discretionary income	0.06	2	0.12
12. Europeans prefer their local brands of doughnuts	0.05	2	0.10
13. Britons tend not to have cars, which inhibits drive-thru customers, and their eating habits and office etiquette differ from Americans	0.06	2	0.12
14. Shareholders may sell Krispy Kreme Donut stock for lack of returns and dividends compared to other similar firms in the industry	0.09	1	0.09
Total	1.00		1.94

2. Analysis: Please analyze the information presented above and discuss what conclusions you can draw from this information.

Internal Factor Evaluation (IFE)

Key Internal Factors	Weight	Rating	Weighted Score
Strengths
1. Affordable, high-quality doughnuts with strong visual appeal and "one-of-a-kind" taste	0.09	4	0.36
2. Neon "Hot Doughnuts Now" sign encourages people outside the store to make an impulse purchase	0.06	3	0.18
3. Market research shows appeal extends to all major demographic groups including age and income	0.08	4	0.32
4. "Hot shop" stores save money while keeping Krispy Kreme Donuts customer experience intact	0.07	3	0.21
5. Vertical integration helps ensure high quality product	0.07	3	0.21
6. Consistent expansion; now in 16 countries	0.08	3	0.24
7. Product sold at thousands of supermarkets, convenience stores, and retail outlets through U.S.	0.06	3	0.18
Weaknesses
1. Return on equity, assets, and investments all negative in the trailing twelve months; skill of management is questionable	0.10	1	0.10
2. Shareholders have not received dividends recently, and are not expected to in near future; stock price in state of flux	0.07	1	0.07
3. Closing stores when stores should be opening globally at steady rate to keep up with competitors' growth	0.06	2	0.12
4. Management states in recent 10-K that it is struggling with how to make stores profitable	0.07	1	0.07
5. Product line slow to expand with nothing outside "sweet treats" to draw in health-conscious customers	0.04	2	0.08
6. Advertising not aggressive enough to appeal to areas outside southeast of U.S. where most stores are	0.03	2	0.06
7. Revenues down, net losses in each of past three years	0.08	1	0.08
8. Per 10-K, continued disputes with franchisees could hurt future business	0.04	2	0.08
Total	1.00		2.36

3. Analysis: Please analyze the information presented above and discuss what conclusions you can draw from this information.

Answer rating: 100% (QA)

Krispy Kreme Donuts Case Analysis Introduction Being appointed as the external consultant to advise and assist Krispy Kreme Donuts as they develop their strategic plans this report is for the Board of ... View the full answer