'Krispy Kreme Swot Analysis\r'

'I. INTRODUCTION Krispy Kreme Doughnuts, Inc. (KKD) is an international retailer of in high spirits-quality winsome treats, including its signature savoury Original Glazed® doughnut. It began as a sm totally bakery in Winston Salem, NC on July 13, 1937. Since then, the keep company has built a worldwide writ ten dollar bill herald for serving the highest-quality doughnuts and great tasting coffee. Krispy Kreme Doughnuts is part of the spry servicing Restaurant (QSR) Industry, which includes almost all companies in the â€Å"fast victuals” industry. Our goal in this report is to uptake various tools to analyze KKD and recommend strategies for them to plus more private-enterprise(a) advantage in the marketplace.First, we provide observe the operational characteristics of KKD. These factors al pathetic for show compulsory indications of egression in Krispy Kreme. We testament look at how many stores they sire present-day(prenominal)ly, how many they be i ntend to add (in the U. S and internationally), and the teach and technology that grades them from some others in the QSR industry. We then will evaluate the performance metrics, such(prenominal) as gunstock turnover and long time of memorandum ratios, to compargon how KKD comp argons to their competition. In order to find come to the fore how efficient Krispy Kreme is operating, our group intends to dentify where the QSR is positi unityd according to the industry bread and unlesster cycle. We will observe the SWOT depth psychology, then we will analyze their competitors to see where KKD stands in relation. This will fuddle us the basis to develop recommendations ab pop out their up-to-the-minute strategies. We begin the â€Å"SWOT” analysis by taxing KKD’s strengths, weaknesses, opportunities, and threats. II. SWOT ANALYSIS The following SWOT analysis is intended to examine KKD’s internal strengths and weaknesses so we can link them to external oppo rtunities and threats with the aim of create a strategy they should pursue. STRENGTHSStrengths argon characteristics of the business or project that give it an advantage over other competitors. As a global governance, KKD has become a household name as they’ve branched into securities industry and convenience stores and make doughnuts readily accessible. KKD offers a proceeds that cannot be matched by any competitors when referring to taste, freshness, and the finest ingredients. Their affordable, high-quality doughnuts create a strong visual attract and â€Å"one-of-a-kind” taste. or so of the advert strengths offered by KKD are: * You are able to own a fresh out of the oven doughnut in the store.Consumers are allowed to watch the process of the doughnuts being made and can buy doughnuts immediately after they are made so they are as hot and fresh as possible. * KKD is a vertically coordinated company. They use specialized doughnut making equipment and spe cial(prenominal) doughnut mixes in each store. Vertical desegregation ensures a precise high-quality product. * Market research shows appeal extends to all major demographic groups including age and income. * lucid expansion: Krispy Kreme is now in 21 countries. * production sold at thousands of supermarkets, convenience stores, and retail outlets through U.S. This raises product aware(predicate)ness to the maximum number of sharpen consumers. * Fundraising: Organizations are able to use Krispy Kreme for fundraising. They allow consumers to use their donuts to help raise money for different philanthropies. (Ex: Krispy Kreme run) * Offers tolerant doughnut day once a class to increase sales. This day allows wad who fool been reluctant to spend money on the donuts to get a free taste and therefore increases their amount of consumers. WEAKNESSES Weaknesses are characteristics that place the firm at a separate relative to others.Some apparent weaknesses Krispy Kreme might h ave are: * Limited amount of â€Å"healthy” selections. * Limited notice: Lack Breakfast items. * Limited amount of non-sting food items. * Not innovative. * No major advertising: degree centigrade% reliance on reputation. * Opening additional locations exclusively no waysing on increasing ongoing store performance. * outside(a) differences/preferences. * Lack of knowledge of what the guest wants (demographics, psychographics, behavioral segmentation). OPPORTUNITIES Opportunities are elements that the company can apply to its advantage.Most internationally located stores purchase their ingredients from local merchants or else than the Krispy Kreme Supply Chain. If KKD can find a speak to powerful way to provide these ingredients, they can gain on supply chain efficiencies to make a profit. Some opportunities for Krispy Kreme to leverage for growth would include: * uphill markets and expansion abroad: International expansion has turn out to bring better returns t han expanding nationalally. Asia and the Middle East twain offer KKD a good market because of high levels of consumer sweet goods consumption and the popularity of Western brands in these International markets. Partnerships with sports teams and convenience stores. * Development of brand-new-sprung(prenominal) menu items. * supplement breakfast/healthier options to compete more without delay with Dunkin Doughnuts, etc. * Innovation. * Product and services expansion. * Local open up kiosks and in-store locations in airports, bookstores, and other retail outlets. * Product Diversification. clean Markets. * Significant co-branding opportunities with local sports teams and movie theaters. * Increased snack consumption: During the past 20 years, more Americans are going out to eat. In straightaway’s busy world, there is less time to civilize meals anymore.KKD believes there’s an opportunity in this gallery that will increase the growth of doughnut sales. THREATS Threats to an organization are described as elements in the environs that could cause trouble for the business or project. Some threats facing Krispy Kreme are: * Competition: Only 694 KKD stores compared to 10,000 Dunkin Donuts and 20,000 Starbucks change magnitude competition from large and small doughnut chains, Krispy Kreme market share erodes slightly in highly competitive markets. * Price Wars: In the doughnut and pastry support ndustry, price wars are generated in attempts to take away revenue from other restaurants and sustain growth. * Economic retardation: External changes (government, politics, taxes, etc. ) * Ordering through the net income: More and clients are ordering online, but Krispy Kreme does not offer online ordering of their donuts. They offer accessories online, such as coffee mugs and t-shirts. Dunkin Donuts offers more accessories including coffee, but no donuts. * vigorous food trends: Krispy Kreme must constantly be aware of substitute products from many different areas of the market place.Such substitutes affected today include healthier menu items include vigor trans fats in all products. Going organic or using 100% natural ingredient items. III. pains ANALYSIS Operational Characteristics Today, Krispy Kreme and its one-of-a-kind â€Å"Hot Light” which is a light that hangs inside the store window for people to know when the doughnuts have just come out of the oven. This â€Å"Hot Light” can be establish in approximately 694 locations around the world and is in 234 locations in the United States.In 2002, KKD shipped their first international thin of doughnut mix to Australia, and since then have added locations in over 20 countries. All KKD ingredients and store supplies are shipped from the company’s diffusion warehouses in NC, IL, and CA. The KKD distribution center supplies all of the products penuryed to operate retail stores, from doughnut ingredients (mix, filling, glaze, sprinkles, etc. ) t o cleaning supplies and uniforms. Production is through in the grind stores and completely automated, which cuts overhead cost and provides consistency in the products.KKD shops chiefly operate seven-spot days a week, excluding some major spends. Traditionally, domestic sales have been slower during the winter holiday season and the summer months. KKD opened five new company operated small retail shops in monetary 2012 and three new company-operated shops in fiscal 2011, all of which were hot shops. They plan to open five to ten small retail shops in fiscal 2013, consisting in the main of small factory stores, all in the southeasterly United States. In the past three years, they have opened 92 stores (See Figure II).The ability to submit a drive-thru window is an important characteristic in most new shop locations, including both factory stores and satellite shops. Of the 85 shops, which serve on-premises customers, 79 have a drive-thru. Traditional factory stores generally a re located in freestanding suburban locations generally ranging in size from approximately 2,400 to 8,000 square feet. The mediocre size is 3,000 square feet. The stores typically have the electrical condenser to produce between 2,800 and 16,000 dozen doughnuts daily. KKD is also investiture funds in more technology to support the business.In 2012, KKD purchased new point-of-sale hardware for all of the company stores and utilise a new computer hardware corpse for all company and franchisee locations. KKD encourages team members to be courteous, helpful, wise(p) and attentive, focusing intently on employee training. High levels of customer service and the maintenance of quality standards are compel by frequently monitoring stores through a variety of methods, including random quality audits, known as â€Å"mystery shoppers” and a toll-free consumer telephone number.KKD offers a comprehensive manager training program for every position in the store, covering the critica l skills involve to operate a Krispy Kreme store and a training program. The manager-training program includes classroom instruction, computer-establish training modules and in-shop training. The main competitors for Krispy Kreme are other quick service restaurants, such as Dunkin Donuts, Starbucks, Panera Bread, and Einstein Noah Bagels. Performance Metrics A company can measure its minimum memorandum investment by its inventory turnover.This is the level of customer demand satisfied by the supply on hand. The inventory turnover tells an organization how many times they cover through the entire inventory in one year. The average day’s supply of inventory that is on hand tells you how many days your current inventory will last based on your sales levels. If a company is short on inventory, the warehousing cost will be lower, but there’s a risk of runnel out. In order to figure these values you need to figure your average inventory and know your costs of goods sold for the year.For the past three years (since 2010) Krispy Kreme has an inventory turnover ratio of 21. 26. They have average days where inventory is 16. 89 (see figures III and IV). Industry brio Cycle Most businesses evolve from the introduction floor, to the growth stage, adulthood, and decline. It is important to understand the evolution of the Quick Service Restaurant (QSR) Industry that KKD competes in to accurately assess the strengths, weaknesses, opportunities, and threats speeding or slowing the firm’s growth. The introduction stage is dominated by the merchandising of an innovation for the first time.Competition is minimal and returns are negative, as most companies must catch up on their investments in R;D, marketing, and manufacturing. The growth stage is characterized by high profits and competition. During this stage organizations begin to differentiate their products based on value and quality. The maturity stage shows high sales accompanied by very strong price pressures. Profit margins often compact as the customers begin to see the product as homogenous (always the same). The decline stage is shown by trim back profits and many companies have to decide whether to anticipate in the industry or cut their losses.Based on these tell factors, we believe the QSR industry is in the maturity stage of the industry life cycle. This is due to a low level of innovation, fluctuating profit margins, and global expansion. IV. RECOMMENDED STRATEGY Krispy Kreme must remain competitive in the Quick Service Restaurant (QSR) Industry. To be effective at this we believe the first thing they should focus on cost leadership. Cost leadership is based on high volume sales of low margin products/services (i. e. Wal-Mart). To achieve this, KKD must focus on increasing their sales.This can be make by analyzing their target market’s key buying habits at the lowest cost to Krispy Kreme. Next, KKD should come their prices and adjust R;D, marketing a nd manufacturing to create a cost gap so they can spell some money. KKD can leverage their economies of scale (complete mechanisation of the doughnut making process, added capacity, and TQM) to create a semipermanent sustainable cost gap. We believe if KKD executives focus on cost leadership in the QSR industry, the company will benefit from increased revenues, retail operations, and increased bear on in the brand name of Krispy Kreme.\r\n'