Krispy Kreme Case Study

Strengths

* Krispy Kreme has been around for more than 70 years and until 2008 it has 395 stores in 40 states in the United Stated and in 10 foreign countries.

* Approximately 75% of Krispy Kreme's total stores are operated by franchisees, and half are located outside the US. Currently, the Krispy Kreme hot Original Glazed® doughnut can be found in 14 countries.

* All process in the bakery became entirely automatic. Each KKD store is a doughnut factory that has the capacity to produce from 4,000 dozen to over 10,000 dozen doughnut daily.

* KKD has a unique brand and variety of freshly made donuts

* KKD can offer to have customers watch product being made at the donut "theaters" which allow customer to watch the actual doughnut making-process.

* KKD has a good relationship with social. Through a variety of methods, including our fundraising programs, Krispy Kreme has supported nonprofit organizations, community events and minor league sports teams. For example, The Krispy Kreme Happy Campers campaign helps sponsor children to a full session at one of the participating camps across the U.S.

Weakness

* KKD has bad relations with franchisees such as cost of equipment, packaging, ingredients...

* KKD snacks are not good for health; they need to consider low-calorie donuts.

* KKD has limited "non-breakfast" menu.

* Krispy Kreme Doughnuts' revenues for the second quarter of fiscal 2008 decreased 7,5 percent to $104.1 million compared to $112.5 million in the second quarter of the prior year. Company stores' revenues decreased 4.7 percent to $75.3 million. Franchise revenues were flat at $5.1 million, and KK Supply Chain revenues decreased 16.8 percent to $23.7 million.

* KKD had 4,759 employees, down from 6,982 employees only two year earlier as of Jan 28, 2007.

* KKD profits are in negative.

* KKD does not have an updated registered Uniform Franchise Offering Circular ("UFOC"), which prevents it from offering franchises to new domestic franchisees.

* KKD does not have online ordering capability and non-interactive website.

* KKD's menu is poorer than Dunkin' Donuts and Starbucks' menu.

* KKD's businesses are weak in the International market.

* KKD's franchising business is not doing well

Opportunities

* Krispy Kreme Doughnuts

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