Professional Documents
Culture Documents
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND ISSUES
Currently the food and beverage industry is increasing, the growth is related to the attitude of society
are increasingly critical in choosing food. Eating is a primary need that is endless, every day people
always need to eat but as time goes by changing human behavior. Humans need food that has certain
characteristics. this affects a growing number of companies engaged in this industry. When we observe
the conditions in the market, in almost all segments of the food and beverage market is getting much
demand. Not just the tight competition, the character of the food and beverage market is also likely to
increasingly challenging and if not faced with the right strategy it will be a failure, when viewed from
the characteristics of consumers alone leads to impulse buyers. They are easy to switch brands.
To deal with that company should be able to provide two kinds of benefits to consumers, namely
functional benefits and emotional benefits to its customers. Functional benefit is the value given by the
company to the consumer of the goods or services used, it means consumers are satisfied if the goods
or services can perform its functions desired by the consumer, while the emotional benefits is the value
that companies provide to their customers is measured from the level of customer satisfaction with
service and existing facilities. Consumers generally want to get both of these benefits, if the company is
able to provide both of these benefits, then the consumer will feel a good experience to the company.
This is important because it is the key to success for the company to win the market. Therefore, the role
of experiential marketing is indispensable in contributing to the company's progress. The reason is, the
provision would create a pleasant experience for consumers emotional benefits that impact increases
consumer confidence to choose, use, and ultimately will be loyal to the brand. From the brand image of
the company's products, for example in terms of competitive price, good quality, good image, benefits
and outstanding service will provide functional benefits to consumers that will also encourage
consumer confidence that will have an impact on brand loyalty.
Conditions like these that encourage the greater number of competition donuts and coffee with modern
innovation offers distinct advantages. This is an effort to modern outlets for entrepreneurs to survive in
the business competition intensifies, but offers a view of the outlet and attractive product alone is not
enough. Every company should be Able to create products and services that evoke an unforgettable
experience (experiential marketing). The concept of experiential marketing Began grounded in the
world of marketing has now been-adopted by the company, Instant confirmation items, namely by
adding the element of experience of the product. With experiential marketing, marketers are expected to
use a wide selection of Appropriate strategies in accordance with the expected goals, be it to Achieve
brand awareness, brand perception, brand equity or brand loyalty (Fransisca Andreani, 2007, p5).
Krispy Kreme is one of the companies in the food and beverage industry to implement this concept.
Krispy Kreme comes with products that create experience for consumers by stimulating the five senses
(sense), feeling or emotion (feel), mind (think), action (act), and efforts to connect consumers with the
brand itself (relate). A brand products that provide creative experiences for consumers will be able to
create a brand image, brand trust and increase brand loyalty.
Establish customer loyalty requires a strong emotional bond between consumers and companies. The
emotional bond formed through a unique experience that is perceived by consumers to the company's
products. Krispy Kreme offers experience to its customers. Because Krispy Kreme is one of the food &
beverage industry company that prioritize features and benefits Also while prioritizing customer
satisfaction. One of the success factors in Krispy Kreme can be seen from experiential marketing factor.
When connected to the concept of sense-feel-act-think-relate, Krispy Kreme stimulate the senses of
consumers by providing a sense be fragrant aroma of donuts and coffee. Products offered by Krispy
Kreme Also has a very unique name such as Nutty Butter, Mud Pie, Choco Snow Flakes, White
Rainbows, Custard Flower and Blueberry Blossom. All donuts are Also designed with a unique and
good quality. Overall facilities and infrastructure used by Krispy Kreme is in conformity with the
lifestyle of today's modern society. For consumers, can buy Krispy Kreme donuts have a pride in itself
(lifestyle).
Krispy Kreme is not just selling Doughnut and coffee were delicious, but also provide a pleasant
2
CHAPTER 2
INTERNAL & EKSTERNAL FACTOR, FINANCIAL PERFORMANCE
of the variety. The display case is a feature you cannot miss when entering our stores today. Vernon
Carver Rudolf mission is Quality and Consistent to its customers.
In 1945 Original Glazed
Then and Now, While times had changed a lot the company's signature Original Glazed Doughnut
stayed the same with eight wonderfull varieties Glazed, Jelly Filled peanut cake stick, plain powdered,
coconut chocolate, cinnamon. With the development of his business in 1948 built factory plant mix and
in 1949 the Department of operating supplies.
In 1955 bowtie gets trademarked
The Krispy Kreme bowtie logo is trademarked with familiar green and red coloring. In the same year
fundraising has begins named krispy Kreme fundraising - Special business ordering from churches,
schools, clubs and other organizations took an upswing in 1955, and has grown steadily. Using the
Fund Raising Plan to sell doughnuts has enabled many schools to buy uniforms and take school trips.
The Plan has also helped organizations buy air conditioners, pianos, and libraries for schools. It has
helped to fund scholarship programs.
In 1963 change the mode of production
Hand production was a thing of the past when automation took over. The planning and timing of
production became a vital task.
In 1973 Bad News Came To Krispy Kreme
the founder Krispy Kreme Mr. Vernon Carver Rudolf dies and the company was sold to Beatrice Foods
but the development is very slow.
In 1982 Krispy Kreme Doughnuts acquired back by Krispy Kreme and continues to be developed by
opening outlets in several major cities in the US
In 1989 First retail store
The first retail-only store is opened which brings the doughnuts out to the customer on the 180 curve.
This first location is on High Point Road in Greensboro, NC. The innovative menu system helped shops
to be able to order products at a much faster pace than the former paper ordering system. A team
member testing the program at the launch said, "I can order in fifteen minutes. It's amazing. I can
change orders when necessary and then print my tickets." Since this time, the Krispy Kreme
Information Services Department has been researching innovative solutions to provide ease to team
members and guests.
In 2001 First international shop in Canada
In December 2001, the first International store opened in Canada just outside of Toronto.
In 2011 New Krispy Kreme Coffe
Krispy Kreme proudly announces the launch of its newKrispy Kreme Signature Coffee Blends at
participating U.S. and Canada locations. Three specially crafted coffee blends "WORTHY" of its oneof-a-kind doughnuts. This also opened the door for speciality coffee blends. In the same year Hot
Light App Launched - We invented the Hot Light App in response to customer requests to know exactly
when our doughnuts are the hottest. Becoming wildly popular since it's inception, it continues to evolve
as it alerts Krispy Kreme fans when it's the perfect time for hot, delicious doughnuts.
In 2012 Celebrate The 500 International Locations
We celebrated our 500th international opening in Aguascalientes, Mexico. Since opening our first
international location in 2001, we have expanded into 21 international markets.
In 2013 We Celebrate The 100 In Mexico
We proudly open the doors of our new store in Cancun, making it Mexico's 100th Krispy Kreme
location. Along with Cancun, Krispy Kreme currently has locations in some of the most vibrant and
exciting cities in Mexico, including Mexico City, Puebla, Cuernavaca, Monterrey, Leon, Guadalajara,
and Aguascalientes.
In 2014 Tony Thompson June 1, 2014 - Appointment of new Krispy Kreme President and CEO
Anthony N Thompson.
5
We believe :
Consumers are our lifebloods, the center of the doughnut.
There is no substitute for quality in our service to customers.
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.
EXHIBIT I
3-FEB2009
28-JAN2007
$ 383,984
$ 429,319
$ 461,195
$ 345,007
$ 380,014
$ 389,379
$ 23,458
$ 26,303
$ 48,860
$ 8,709
$ 18,433
$ 21,046
$ 548
$ 62,073
$ 12,519
$ (14,930)
$ 15,972
$ 1,501
$ 13
$ 1,916
$ 4,761
$ (42,587)
$ (28,497)
$ 331
$ 1,422
$ 1,627
$ (10,679)
$ (9,796)
$ (20,334)
$ (9,622)
$ (786)
$ (933)
$ (842)
$ 2,815
$ (3,211)
$ 7,021
$ (3,558)
$ (64,727)
$ (41,025)
$ 503
2,324
$ 1,211
$ (4,061)
$ (67,051)
$ (42,236)
REVENUES
OPERATING EXPENSES
DIRECT OPERATING EXPENSES
(EXCLUSIVE OF DEPRECIATION AND
AMORTIZATION SHOWN BELOW)
SETTLEMENT OF LITIGATION
INTEREST INCOME
INTEREST EXPENSES
LOSS ON EXTINGUISHMENT OF DEBT
EXHIBIT II
THOUSANDS)
PERIOD ENDING
FEBRUARY
1 2009
FEBRUARY
3 2008
JANUARY
28 2007
$ 35,538
$ 24,735
$ 36,242
Net Receivables
$ 20,770
$ 26,764
$ 64,227
Inventory
$ 15,587
$ 19,987
$ 26,612
$ 3,991
$ 4,594
$ 5,187
$ 75,886
$ 76,080
$ 132,268
$ 1,365
$2,024
$ 4,261
$ 85,075
$ 90,996
$ 168,654
Goodwill
$ 23,496
$ 23,496
$ 28,094
Intangible Assets
$ 1,036
$ 1,531
$ 1,900
ASSETS
Current Assets
Cash and Cash equivalents
Short Term Investments
Acumulated Amortization
Other Assets
$ 6,144
$ 5,855
$ 9,226
$ 2,004
$ 2,396
$ 5,539
$ 195,006
$ 203,378
$ 349,942
Accounts Payable
$ 27,816
$ 30,630
$ 133,140
$ 3,761
$3,788
$ 1,730
$ 8,039
$ 8,800
$ 39,616
$ 43,218
$ 134,870
$ 97,449
$ 75,156
$ 105,966
Other Liabilities
$ 23,865
$ 25,656
$ 106
$ 3,488
$ 4,038
Minority Interest
Negative Goodwill
$ 137,171
$ 145,727
$ 270,530
Prefered Stock
Common Stock
$ 361,801
$ 355,615
$ 310,942
$ (303,133)
$(299,072)
$ (233,246)
Treasury Stock
Capital Surplus
$ (913)
$ 81
$ 1,266
$ 57,755
$ 56,624
$ 78,962
$ 194,926
$ 202,351
$ 349,492
Total Assets
Liabilities
Current Liabilities
Total Liabilities
Stockholders Equity
Retained earnings
Source : www.krispykreme.com
EXHIBIT III NUMBER OF EACH TYPE OF STORE AT THE END OF FYs 2009. 2008, 2007
and 2006
FEBRUARY
1 2009
FEBRUARY
3 2008
JANUARY
28 2007
JANUARY
29 2006
COMPANY STORE
93
105
113
133
FRANCHISE
STORE
430
344
282
269
TOTAL
SYSTEMWIDE
523
449
395
402
COMPANY
83
97
108
128
FRANCHISE
198
198
188
195
TOTAL FACTORY
281
295
296
323
COMPANY
10
FRANCHISE
232
146
94
74
TOTAL SATELITES
242
154
99
79
TOTAL
SYSTEMWIDE
484
308
198
158
COMPANY
93
100
107
127
FRANCHISE
132
145
165
207
TOTAL
DOMESTIC
STORES
225
245
272
334
BY OWNER
BY TYPE
FACTORY
STORES
STORE
SATELITES
DOMESTIC
STORE
INTERNATIONAL
STORES
10
COMPANY
FRANCHISE
298
199
117
62
TOTAL
INTERNATIONAL
STORES
298
204
123
68
TOTAL
SYSTEMWIDE
523
409
246
130
FEBRUARY
1 2009
FEBRUARY
3 2008
JANUARY
28 2007
REVENUES BY BUSINESS
SEGMENT
11
Company Stores
$ 265,890
$ 304,444
$ 326,199
Franchise
$ 25,537
$ 22,958
$ 21,075
KK Supply Chain
$ 92,557
$ 101,917
$ 113,921
Total Revenues
$ 383,984
$ 429,319
$ 461,195
$ 268,098
$ 299,806
$ 307,635
Franchise
$ 8,936
$ 8,746
$ 4,602
KK Supply Chain
$ 67,973
$ 71,462
$ 77,142
$ 345,007
$ 380,014
$ 389,379
$ 6,402
$ 11,558
$ 15,979
$ 86
$ 92
$ 119
KK Supply Chain
$ 1,019
$ 5,586
$ 3,469
Corporate Administration
$ 1,202
$ 1,197
$ 1,479
$ 8,709
$ 18,433
$ 21,046
DEPRECIATIONS AND
AMORTIZATION EXPENSES
Company Stores
Franchise
Total Asset Krispy Kreme Doughnuts decreased from $ 349.492 be $ 194.926. (EXHIBIT II)
Total Revenue Krispy Kreme Doughnuts decreased from $ 461.195 be $ 388.984. (EXHIBIT IV)
Company Stores: revenue fell from $ 326.199 be $ 265.890, down from $ 307.635 expense be $
268.098,
so that in the year 2009 Company Stores no longer profit but a loss of about $ 2.208.
Franchise: revenue rose from $ 21.075 be $ 25.537, expense rose from $ 4.602 into $ 8.936, so that in
years
12
KK Supply Chain: revenue fell from $ 113.921 be $ 92.557, down from $ 77.142 expense be $ 67.973,
So that in the year 2009 of KK Supply Chain still give a profit of about $ 28.584.
STORES BY OWNER
13
500
400
300
200
100
0
COMPANY STORES
FRANCHISE STORES
STORES BY TYPE
FACTORY STORES
SATELITE
14
450
400
350
300
250
200
INTERNATIONAL
DOMESTIC
150
100
50
0
COMPANY STORES
FRANCHISE STORES
STORES BY LOCATION
BRAND NAME
Kri s py Kreme
Pri vate Label
Entenmanns
Hos tes s
Donettes
Entenmanns
Softees
Li ttl e Debbi e
Entenmanns
Extreme
Hos tes s
Meri ta
Bl ue Bi rd
USD
130,409,808
88,304,008
85,233,104
83,839,496
33,668,032
30,860,856
17,163,728
17,089,810
13,363,270
11,534,341
UNIT SALES
42,774,572
38,358,984
25,656,796
36,445,068
10,643,769
24,837,084
5,244,544
5,745,155
6,303,118
8,092,483
PRICE/UNIT
T
3.05
2.3
3.32
2.3
3.16
1.24
3.27
2.97
2.12
1.43
RANK
4
6
2
7
1
10
3
5
8
9
15
BY OWNER
COMPANY
STORES
FRANCHISE
STORES
BY TYPE
BY LOCATIONS
FACTORY
STORES
SATELITE
DOMESTIC
INTERNATION
93 / 18 %
83
10
93
430/ 82
%
198
232
132
298
523 / 100
%
281
242
225
303
(In Thousands)
YEAR ENDED
FEBRUARY
1 2009
FEBRUARY
3 2008
$ 265,890
$ 304,444
JANUARY
28 2007
REVENUES BY BUSINESS
SEGMENT
Company Stores
$ 326,199
16
CS
FS
Profit CS
Profit
Total
Penjelasa
Data 2009,
profit CS/store
430 $ 14,393.00 $ 24,584.00 $ 38,977.00 Current business
negatif (23.74) 93
Franchise
$ 25,537
$ 22,958Karena CS$profitnya
21,075
dan profit
Data 2009,
negatif (23,74)/store,
KK
Supply
Chain 0
92,557
$ 101,917Company$Store
113,921
profit
CS/store
523 $ 20,193.03 $$24,584.00
$ 44,777.03
negatif (23.74)
dirubah semua
Total
Revenues
$
383,984
$
429,319
$ 461,195
dan profit
menjadi franchise
FS/store 38.61
Jumlah store sesuai
Operating Expenses by Business
posisi tahun 2009. Di
Management
sini harus ada effort
Data 2009,
mematok profit
Company
CS/store Store
$ 40
93
dan profit
Franchise
FS/store
38.61
KK Supply Chain
430
Mematok
profit Expenses
Total
Operating
CS/store $ 40
dan profit
Profit By business segment
FS/store
38.61
Company Stores
40
483
Franchise
KK Supply Chain
perbaikan marketing
$
268,098
$
299,806
$ 307,635
$ 20,322.30 $ 24,584.00 $ 44,906.30 untuk meningkatkan
sales dan efisiensi dan
$ 8,936
$ 8,746 efektifitas $operasi
4,602
untuk menurunkan
$ 67,973
$ 71,462beban
$ 77,142
CS dipertahankan
$ 380,014
$ 389,379
sebanyak 40 store
sedangkan 53 CS
diubah menjadi FS. Di
sini harus ada effort
$(2,208)
$ 4,638
$ 18,564
$ 20,248.63 $ 24,584.00 $ 44,832.63 perbaikan marketing
untuk meningkatkan
$ 16,601
$ 14,212sales dan efisiensi
$ 16,473dan
efektifitas operasi untuk
$ 24,584
$ 30,455menurunkan
$ 36,779
beban
$ 345,007
Total Profit
$ 38,977
$ 49,305
$ 71,816
Company Stores
93
105
113
Franchise
430
344
282
$ (23,74)
$ 44,17
$ 164,28
$ 38,61
$ 38,70
$ 58,41
Total stores
Jan.2000
Jan.2001
Jan.2002
Jan.2003
Jan.2004
Jan.2005
Jan.2006
Revenues
220,243
300,715
394,354
491,549
665,592
707,766
543,361
36.54%
31.14%
24.65%
35.41%
6.34%
-23.23%
Growth Rate
STOCK
PRICE
-88%
17
STORES
-30
CHAPTER 3
BUSINESS CASE ANALYSIS, STRATEGIC BUSINESS ANALYSIS
18
Strengths
Affordable, high-quality doughnuts with strong visual appeal and "one-of-a-kind" taste
Neon "Hot Doughnuts Now" sign encourages people outside the store to make an impulse
purchase
Market research shows appeal extends to all major demographic groups including age and
income
Hot shop" stores save money while keeping KKD customer experience intact
Vertical integration helps ensure high quality product
Consistent expansion; now in 16 countries
Product sold at thousands of supermarkets, convenience stores, and retail outlets through U.S.
Weaknesses
Return on equity, assets, and investments all negative in the trailing twelve months; skill of
mgmt. is questionable
Shareholders have not received dividends recently, and are not expected to in near future; stock
price in state of flux
Closing stores when stores should be opening globally at steady rate to keep up with
competitors' growth
Management states in recent 10-K that it is struggling with how to make stores profitable
Product line slow to expand with nothing outside "sweet treats" to draw in health-conscious
customers
Advertising not aggressive enough to appeal to areas outside southeast of U.S. where most
stores are
Revenues down, net losses in each of past three years
Opportunities
Development into diversified product markets
Detection of the problem occurring in the management of the business and thus the fall in
business and profitability
Develop the social outreach programs to promote the doughnuts and to promote the customer
based objectives and mission of the organization.
Reaching the market to really know what the customers want and then to develop the marketing
and strategic policy in accordance to that.
Asians love sweets and are open to trying foreign foods
Starbucks lacks a diversified and distinctive pastry line
Dunkin' Donuts does not have hot doughnuts to sell
Many children love sweet treats
Threats
Tough competition and increasing global recognition of Starbucks and Dunkin Donuts.
19
Strengths
Weaknesses
Quality
Communication
Brand Awareness
Management &Control
Market share
Cannibalization (erode)
Various products
Financial practice
Vertically integrated
Opportunities
SO
WO
Marketing &
Social network
Improving
management
Threats
ST
WT
Health campaign
Promoting healthy
products & Economic
scale & CSR
Avoid developing
existing markets
by existing
products
Competition
20
21
22
23
24
25
Krispy Kreme Doughnuts run the operation well, but the results have not been up even tend to decrease
in business.
Krispy Kreme Doughnuts need new strategy to be able to maintain revenue KKD
1.Hard Elements
1) Strategy (Mixed)
2) Structure (Own stores & Franchises)
3) Systems (Everyone contributes to the
value)
2. Soft Elements
1) Shared values (Hot fresh magic
26
SEGMENTING
TARGETING
POSITIONING
ADVANTAGE
DISADVANTAGE
Kreme Doughnuts
management
COMPANY STORES
27
1.
2.
3.
4.
5.
6.
Krispy Kreme's business model involved generating revenues and profits from three sources
sales at company-owned storees
royalties from franchised stores and franchise fees from new store
openings store in the 2,400 to 4,200-square-foot
franchise fee: $20,000 to $40,000 for each store
pay 4.5% royalty fee and 1.0% of revenues
sales of doughnut mixes, customized doughnut-making equipment, and coffees to franchised stores.
LO
W
DEGREE
HIG
H
4
4
4
28
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
1
3
2
3
3
1
1
3
2
2
1
3
COST LEADERSHIP
DIFERENTIATION
Unique product
Economic scale
29
Atmosphere
Grow capability
Experience
Aggressive expansion
Emotional leisure
Franchising
Trend & popularity
Reduce advertising
Brand awareness
Go public
Combine with coffee
Go international
STRATEGIC IN MATURE STAGE
3.4CRITICAL ISSUES
Banks saved KK in 4/08 extending life of loan agreement (interest rate higher)
New CEO in fiscal 2008
Highly competitive w/ Dunkin Donuts, Tim Hortons and Starbucks
Focus on marketing
Closing of Franchises
Globalizing Krispy Kreme
30
Decrease loss
Themed doughnuts
o
o
Holiday doughnuts
Special order
birthday doughnuts
Special event
catering (wedding,
etc.)
DISADVANTAGE
ADVANTAGE
DISADVANTAGE
Attractive to the
international market
More efficient
ALTERNATIF 3
ADVANTAGE
ALTERNATIF 2
ALTERNATIF 1
ADVANTAGE
DISADVANTAGE
ALTERNATIF 4
ADVANTAGE
DISADVANTAGE
31
A huge cost of
advertising expense
Formulate marketing
strategy for mascot and
2008 Beijing Olympics
Increase sales
Increase celebrity/icon
marketing possibilities
More helpful on
increasing the
international market
Begin advertisements on TV
and Radio
CHAPTER 4
PROBLEMS AND SOLUTIONS, RECOMMENDATIONS
1. What strategies should implemented by Krispy Kreme Doughnuts Management?
2. How will Krispy Kreme return to profitability?
3. On the basis of your assessment above, what do you think of Krispy Kremes growth prospects?
Just how good are they?
4. RECOMMENDATIONS
Evaluation of operating expenses which the expenditure items that are not rational to be
trimmed.
Looking for a replacement base material donut cheaper but do not detract from the quality.
Evaluation of the number of employees, whether it efficient? If you need to do to be more
efficient equipment modernization.
II. Repair cost structure with innovations to raise revenue :
Adding a selection of drinks at the satellite stores, since the margin beverage products
generally> 50%.
Creating new products that conform with changes in lifestyle and healthy food trend, not limited
to just donuts alone.
Open service delivery order with a minimum order.
improve the way services more friendly and fresh.
32
Competitiveness
Efficiency
Franchisee relations
Historical basic product with variations KK is known for its doughnuts, let that be the basic
product. Other products should be added to the menu based on customer demand.
Vertical integration principle at this stage, in order to reduce cost, increase revenues and subsequent
profitability
Franchise maintain effective communications with franchises, ensure that they uphold the KK brand
and quality and monitor them effectively
Customer experience make every doughnut a fun and adventurous experience for the customers. Let
them feel and be involved
Diversify the sales locations open stores in strategic locations, with dense population
33
80
60
company stores
$ million
40
systemwide20average
0
Q3 2004 Q4 2004 Q3 2005 Q2 2005 Q3 200
For KK, the growth prospects as at the end of 2005 seem quite bleak. Though they had optimistic
projections for sales, revenues and store growth, the actual results were well below what was
expected
30
25
20
15company stores
% 10
5
0
Q3
2004
Q4
Q1 2005
in 2004
systemwide
sales
-5increase
-10
systemwide
Q2 2005
Q3 2005
fiscal year
Porters five forces; though not a traditional model for assessing growth prospects of a company, the
five forces can be used to determine the possibility for future growth for KK in this industry
Competition and rivalry
Substitutes (and complements)
Bargaining power of suppliers
Threat of new entrants
Bargaining power of buyers
Ansoffs growth model
Market penetration existing products, existing market
Market development existing products, new markets
Product development new product, existing market
Diversification
4.4 RECOMMENDATIONS
ALTERNATIVE 1 & 2
Grow slowly
35
BIBLIOGRAPHY
David, Fred R. Fourtheenth Edition, Strategic management concepts and cases, Pearson
Krispy, Kremes. 2011. Krispy Kreme Doughnuts History
http://krispykremers.blogspot.co.id/2008/11/about-krispy-kreme.html/ accessed on
36