Krispy Kreme Case Analysis
Krispy Kreme operates by owning and franchising stores worldwide. The company sells and distributes a wide variety of premium doughnuts including the Original Glazed, together with complementary products and beverages. Krispy Kreme operates within the quick service restaurant segment of the restaurant industry (Thomson Reuters, 2012). In both domestic and international markets, they compete against international retailers of doughnuts such as Dunkin’ Doughnuts and local stores such as Tesco’s bakery. Krispy Kreme also competes against retailers who sell desserts such as coffee shops, cookie stores and ice cream parlours.
During 1990-2000 Krispy Kreme saw a rapid growth in the number of new store openings. Enthusiasm for …show more content…
It will analyse the reasons for Krispy Kreme’s current poor performance by comparing it to its success in the 1990’s. The operational issues will be looked at using three frameworks; the value chain, distribution and the four v’s. This essay will also suggest ways Krispy Kreme can overcome operational issues by imitating processes used by its competitor Dunkin’ Doughnuts. Throughout this report it is crucial to keep in mind the implications of Krispy Kreme deviating further from its original operational procedures. The company needs to consider the various operational risks it faces and make a conscious effort to try and avoid or overcome them. In conclusion, there are several other frameworks that can be used to analyse Krispy Kreme’s operational issues such as its lack of inventory planning and non-manufacturing process failures in accounting and …show more content…
This is beneficial as it helps them maintain consistency and utilize purchasing economies of scale, lowering the cost of supplies and enhancing profitability. During the early 2000’s, the firm also adopted a vertical integration model for its beverages, acquiring Digital Java, Inc., a micro-roaster of premium-quality coffee and producer of a range of beverages (Go Upstate, 2001).
As Krispy Kreme grew globally they outsourced the distribution of the Krispy Kreme doughnut mix and equipment to franchises around the world through Sysco (Business Week, 2011). This allowed the company to benefit from the expertise of a world-class logistics company. The size and reach of Sysco’s distribution network worked in Krispy Kreme’s favour when franchises were sold in the Middle East and Asia.