Krispy

Kreme
Donughn
ut Inc.

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Table of Content
Page no.
About Krispy Kreme Inc. 03
Current performance of Apple04
Mission and Vision statement.06
Growth strategy05
Corporate governance..08

Environmental scanning:
External Environment Analysis .......09
Industry environment.10-12
Summary of external forces 12
Internal Environment13
Core Competencies ..17
Summary Of Internal forces...18

Analysis of strategic factors:

SWOT analysis......19
IFAS20
EFAS21
TOWS Matrix.22

Strategic alternatives and recommendation23

Evaluation and control..24

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Introduction:
Krispy Kreme is a doughnut retailer in the quick-service restaurant sector. As of January
31, 2010 they operated 582 stores in 20 countries across the world including The United States,
Australia, Mexico, Saudi Arabia, and Qatar. In addition to their famous Original Glazed
doughnuts, they also offer other options such as doughnut holes and jell-filled doughnuts, and
coffee and espresso drinks that complement their featured product. They have also recently
started to offer a product called Kool Kreme which is a homemade ice-cream that they make
doughnut sundaes and other dessert items with.
The quick-service restaurant sector of the economy is very competitive. Going against
giants like McDonalds and Burger King, Krispy Kreme is having a tough time matching what
these monster chains can offer customers. These competitors are encroaching into the breakfast
market and Krispy Kreme is in danger of losing its advantage and position in the market. Unlike
these other quick-service restaurants, Krispy Kreme is having trouble bringing in customers for
meals after breakfast because they offer only doughnuts, coffee, and sweet treats. Based on their
recent menu additions and the companys vision statement, To be the worldwide leader in
sharing delicious tastes and creating joyful memories, Krispy Kreme obviously feels that they
need to be more than just an average doughnut shop that sells doughnuts in the morning.

Company History:
In 1937, Vernon Rudolph began selling homemade doughnuts to local groceries for resale in
Winston-Salem, North Carolina. His doughnuts were based on a recipe his uncle had obtained from
Louisiana, and they were unique in their inclusion of yeast. The yeast allowed the dough to rise,
which gave the doughnuts a light, airy composition, different from the usual cake doughnuts. This
secret ingredient proved successful and it didnt take much time before Rudolph started selling
doughnuts straight to customers from a hole he cut in his wall. The success of his doughnut
operation forced Rudolph to expand, and by the 1950s, it had grown to a small chain of familyowned doughnut shops. Rudolph was committed to quality and consistency. Each doughnut shop
used the same original recipe, but the doughnuts were still handmade at each location. To enforce a
standard of quality, the company opened a plant dedicated to producing and distributing dry
doughnut mix to each shop. The company also engineered and manufactured doughnut-making
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machinery for regulating doughnut production. This automation allowed the company to enjoy
steady growth throughout the 1950s and 1960s in the Southeast. The doughnut machinery,
ingredient mix, and corporate image were refined during this period, and are nearly the same today
as they were back then. Rudolph passed away in 1973, and company growth slowed for a while,
until the Beatrice Foods Company acquired Krispy Kreme in 1976. Although some reorganization
took place, the companys headquarters remained in Winston-Salem. The Beatrice Foods Company
was a major presence in the food market and a household name until
the leveraged buyout raids of the 1980s. The bulk of their brands and assets became ConAgra
Foods, which is still today one of the countrys largest packaged foods companies. A group of
franchisees bought Krispy Kreme back from Beatrice Foods in 1982, and refocused the companys
energies on the hot doughnut experience. The Doughnut Theatre concept, where customers could
watch freshly baked doughnuts roll off the assembly line from behind a glass window, was
popularized during this time. The company began to expand again, and it ventured out of the
Southeast. In 1996, a store was opened in New York City, and in 1999, a store was opened in
California. Krispy Kreme was a national brand at this point, and took the opportunity to go public.

Current Situation:
Krispy Kreme is going through a tough stretch right now. Their aggressive expansion in
the 1990s and early 2000s have come back to hit them hard. Net income has been negative
since 2003 and the company has been on the verge of bankruptcy several times throughout the
past seven years. However, 2010 is forecasted to have a positive net income based on quarterly
earnings for the year. Current leadership has done a great job recreating the companys image
and getting back to the basics of the classic doughnut shop, but there is still a lot of work to do.
The current situation Krispy Kreme finds itself in is based on the actions of former CEO
Scott Livengood. The company was sued by shareholders after releasing its first profit-warning
in May of 2004 and was accused of fudging earnings to meet expectations and receive huge
bonuses. The Securities Exchange Commission formally filled an investigation into the company
and the stock price had fallen 50% in 2004. As the following graph shows, 2004 was the first
year that Krispy Kreme reported a loss. In 2005 the company failed to file audited financial
statements and Livengood resigned as CEO. It is impossible to know what the real numbers
would have been had Krispy Kreme been following the guidelines from 2000-2004, but it is safe
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to assume that they were losing money during that time. The actions of past management have put
the current management under serious pressure to save the company.

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Compared with its largest competitors, Dunkin Donuts and Starbucks, Krispy Kremes revenues
are drastically lower. Posting revenues of 6.90 and 10.29 billion respectfully, its competitors
dwarfed Krispy Kremes revenue of 350.42 million in 2009. Low revenues have caused major
problems for the company. High startup costs, coupled with falling sales, have stressed Krispy
Kremes stores. In the period from 2004-2009 over 240 domestic stores were
shut down by the company and franchisees. Additionally, on November 10, 2010 they
announced they will be shutting down 21 of their 51 stores in Australia. Competition from these
companies, as well as changes in consumer taste and poor expansion strategy, has put Krispy
Kreme in a difficult position.

Mission Statement:
To touch and enhance lives through the joy that is Krispy Kreme

Vision Statement:
To be the worldwide leader in sharing delicious tastes and creating joyful memories.

Values

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

Growth Strategies and Policies of krispy kreme: Traffic fell at Krispy Kreme Doughnuts
during the companys fourth quarter, as the donut chain tweaked its promotional and incentive
strategies to improve operating margins.
Net income for the fourth quarter ended Feb. 1 tumbled to $6,546,000, or 10c per share, compared
with $14,760,000, or 21c per share, reflecting unusual tax credits in the prior year. Excluding
special items, earnings per share increased to 17c from 12c.
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Revenues increased 11% to $125,367,000 from $112,746,000 in the year-ago period.

For the year, net income declined to $30,060,000, equal to 44c per share on the common stock,
which compared with $34,256,000, or 48c per share.
Revenues increased 6.5% to $490,334,000 from $460,331,000.
System-wide domestic same-store sales rose 3.6% for the quarter and 3.1% for the year on higher
prices and average check. System-wide store count rose 19% to 987 company and franchise shops
worldwide for the year.
Looking ahead, management is focused on four key strategies, which include accelerating global
growth, leveraging technology, enhancing the core menu and maximizing brand awareness.
This year, Krispy Kreme executives project shop openings in at least six new countries, mostly in
the Asia-Pacific region, where the chain already has a strong presence, and in Latin America, where
it is establishing a foothold.
We are evaluating a list of additional countries to build on our strong, global brand, said Tony
Thompson, president and chief executive officer, during a March 11 earnings call with analysts.
We believe that we can continue global system-wide unit growth at a double-digit rate for years to
come.
On the technology front, Krispy Kreme began testing a mobile platform late last year, which
included the introduction of a loyalty and rewards program. A national roll-out is planned for later
this year.
The mobile app engages our guests through its Hot Light feature that notifies them when the Hot
Light is on at their favorite Krispy Kreme shop, and it allows us to reward our guests with points
that can be redeemed on future visits, Mr. Thompson said. The app also offers stored value, which
can be securely loaded, and allows our guests to easily pay and go.
Krispy Kremes third strategic focus is enhancing the core menu, particularly in beverages and
limited-time donut varieties. Within the coming months, the chain plans to promote frozen lattes.
Donuts will always be center of plate for us, and an important complement to our donuts is the
significant opportunity to increase our in-store beverage attachment rate, Mr. Thompson said. We
have devoted additional leadership resources to beverage, and currently are revamping our longterm beverage strategy, as well as working on short-term opportunities, both inside and outside of
our shops.

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The final piece of the companys plan is maximizing brand awareness through multiple channel
opportunities, including wholesale donuts and snacks, licensing and a fundraising program.
Wholesale, or consumer packaged goods, represent about half of the companys shop revenues,
and we believe the channel has significant growth opportunities over the long term, Mr. Thompson
said. We have been adding new, longer shelf life products such as marble cake and fruit danishes,
which have received positive feedback from consumers.
The company announced a coffee licensing program last year that now includes packaged ground
coffee, ready-to-drink coffee and K-Cup packs. Recently, Krispy Kreme announced a multi-year
licensing agreement with Massimo Zanetti Beverage USA to roast and distribute 12-oz bags of
Krispy Kreme ground coffee for grocery stores, mass merchants, club stores and on-line.

B. Corporate Governance:
The Board oversees the Companys Chief Executive Officer (the CEO) and other senior
management in the competent and ethical operation of the Company on a day-to-day basis and
assures that the long-term interests of the shareholders are being served. To satisfy its duties,
directors are expected to take a proactive, focused approach to their position, and set standards to
ensure that the Company is committed to business success through the maintenance of high
standards of responsibility and ethics. The key practices and procedures of the Board are outlined in
the Corporate Governance Guidelines available on the Companys website.
The Board met a total of four times during 2009. The Board has determined that all Board members
are independent under the applicable NASDAQ and SEC rules.

C. Top Management:
Name
Anthony N. Thompson
James H. Morgan

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Title

Board Role
CEO

Chairman of the Board

President and Chief Executive

Officer
Chairman of the Board of
Krispy Kreme

Price Cooper

CFO

2. External Environmental Analysis

A. General Environment
The U.S Market for Doughnut was $10 billion. The Major portion of 45% market share was
held by Dunkin donuts. Dunkin Donut was the world`s largest coffee and baked-good chain. In
contrast to Krispy Kreme it emphasize more on coffee and convenience. Dunkin Donut had threat
from Starbuck which the countered by adding a wider variety of hot-and cold-coffee beverages, and
beating Starbuck in time management. Quick and consistence service was the Dunkin donut focus.
Winchell`s Donut house was also proposing itself as a fresh glazed donut maker. It initiated
program like WARM N FRESH and replacing donut after every 15-20 minutes between certain
times. It initiated several promotional schemes to combat Krispy Kreme. It brought some
innovation by adding low-fat doughnuts, muffins and bagels.
Tim Hortons was another name in the market and it specialized in coffee and baked doughnut.
Eventhough half of its sales include coffee without donut. Another point of difference was the 24
hour drive through at Tim Hortons. Similarly LAMAR`s Donut was famous for its customized
product and its doughnut were of artisan quality. The biggest surprise with respect to other
companies was that a day old donut were never sold at the shops but were donated at day`s end to
the needy.
All these companies had some portion of market since the size of market was so huge that every
company was doing good in its area of expertise. Moreover, some small vendors were also happy
since giants like Krispy Kreme and others used to invest heavily on marketing and promotion which
was simply increasing awareness and size of the market

PESTL Analysis for KRISPY KREME DOUGHNUTS, INC.

i. Political Factors
Political factors affecting the specialist eateries industry are few and consist mainly of minimum wage and
employment law changes. Krispy Kreme train their staff who usually have little experience or education;
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consequently, they pay employees minimum wage or similar and are therefore affected by minimum wage
increases.Other political factors are government actions to reduce obesity; however it is very unlikely
that government will legislate against high fat and unhealthy foods2.

ii. Economic Factors

The continued economic downturn has meant tightened consumer spending, as Krispy Kreme is a
non-essential food item this may pressure sales. Inflation is above the Bank of England target and
there is upward pressure on long-term interest rates as shown by the UK treasury yield curve. An
increase in interest rates will increase the cost of capital and mean more expensive borrowing at a
time that they could need to expand to compete with rivals.

iii. Social Factors

UK consumers are becoming more aware about the ingredients in food, e.g. boycotting trans fats,
battery farmed poultry and mass farmed tuna. In 2008 this motivated Krispy Kreme to remove trans
fats from their products. Low carb diet trends (e.g. Atkins) can also have an effect on purchasing.
Going out to eat and drink is a social habit that is unlikely to change in the near future, but
consumers can change their habits from eating doughnuts to other sweet foods such as icecream or
pastries.
iv. Technological Factors
Due to the nature of purchasing and preparing foods, few technological trends influence the
industry. However technology can be used to improve efficiency, production, distribution, and
monitor commodity prices in real-time. Some commentators argue that ecommerce will erode visits
to physical stores, however the convenience food nature of speciality eateries require strong
physical presence to capitalise impulse purchases.
v. Legal Factors
Fluctuations in commodity prices affect margins, as in 2009 when the price of wheat and soybean
oil (key ingredients of doughnuts) reached record highs.

B. Task Environment (Industry Analysis):

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. Using Porters Five Forces model, we can better analyze the industry as a whole.
Suppliers generally have low bargaining power. This is true because suppliers have an
uphill battle both ways in the supply chain. On one hand, they have volatile raw input prices
which can cause fluctuation in costs and hinder proper planning, while on the other hand, their
customers come and go as they please because bread products are easily interchangeable and
readily available. In order for suppliers to leverage their bargaining power they need to
differentiate themselves from the rest and create some sort of switching cost for the buyers. To
do so they need to offer premium products or a particular combination of products that are easily
accessible to consumers at low prices; these products must be hard to find elsewhere or the
consumer must be brand loyal to the firm based on other factors.
The bargaining power of buyers is very high. Consumers can go nearly anywhere to
get their bread products, with the exception of specialty niche products. Goods like loaf breads
from grocery stores are especially common; consumers head to the bread aisle and can choose
from a variety of brands, finding similar offerings among them all, usually settling on whichever
is the lowest price for what theyre looking for.
Threat of substitutes is at an extreme high. Especially in todays society where
consumers are becoming more aware and conscientious of what they eat, substitutes are readily
available and on the rise. Healthy alternatives to traditional bakery items can satisfy the hunger
and are much more accessible. These items include things like yogurt or fruit bars, nuts, and
even fruit.
The threat of new entrants into the bread production industry is moderate:
Barriers to
entry are low because the capital required to successfully start a profitable business is fairly
significant. What new entrants have to face is the entrenchment of strong players within the
industry who have the resources to maintain contracts with their suppliers for stable raw input
prices, the capital to invest in technologically advanced manufacturing equipment, and customer
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brand loyalty. Furthermore, they enjoy economies of scale because they are able to have lower
per unit outputs.
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The competitive rivalry among firms is high. Because operating conditions have
become increasingly unpredictable and industry growth over the past five years has been
-1.0%, many companies have had to make many changes. Many have begun to scale back
operations and the industry has seen increases in mergers, as well as acquisitions, creating an
increasingly
fragmented arena which leads to overall low industry concentration levels. There are many
small to medium sized enterprises that are dispersed throughout the country, therefore there is
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no significant foreseen increases to concentration. Furthermore, businesses are unable to

capture significant portions of the market for several reasons - not only because of the highly
fragmented nature of the industry, but also the violent fluctuations of raw inputs, price
competition, quality
.

C. Summary of external forces:

At present time in general environment the economic forces and socio-culture force are
important. The purchasing power of consumer, Inventory cost, Distribution cost, selling price
etc. all are related with economic forces. If countrys economic condition is stable then all factors
will work positively. In industry environment threats of substitute product and threats of new
entrance is important for present as well as for future. New entrance in industry keep krispy
kreme always improving their product quality feature etc. and for substitute products they will
always try to make their product unique.

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3. Internal Environment:
Corporate structure of Krispy Kreme Doughnuts:
The organizational structure is mainly a traditional hierarchy, with some key elements from
other types of organizational structure. The success of the company is linked to innovation and
the leadership of Steve Jobs, but its organizational structure is partly responsible for ensuring
support for such leadership. Now, under Tim Cooks leadership, Krispy Kreme Doughnuts
has made some small changes in its organizational structure to suit market and industry demands.
Krispy Kreme Doughnuts organizational structure is effective in supporting business

performance to ensure leadership in the industry. However, further changes in this organizational
structure can help improve Krispy Kreme Doughnuts capabilities, especially in the area of rapid
and creative innovation and design

A. Corporate culture:
Krispy Kreme Doughnuts, Inc. (hereinafter, Krispy Kreme) seemed poised to become an
industry leader and Wall Street chart topper in 2000, however, by 2004 the companys stock price
had plummeted. Krispy Kremes stock price one day after the initial public offering in April of
2000, was $40.63, giving the company a market capitalization of nearly $500 million. Investors
believed Krispy Kreme was the next big money maker to enter the market.

B. Organizational Activities:
Organizational activities are such type of work these are done for achieving organizational goals
and objectives. That activities include how the firm will work, in what position will be better for
the company, who will do the work, and what type of improvement is needed etc. These works
are done by several departments this are

Marketing Analysis:

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Marketing
Finance
Research and Development
Human Resource Management.
Information System.

It is difficult to determine where the marketing department resides within the organization, as
very little evidence of market research exists. Krispy Kremes marketing plan seems simple on
the surface; they dont appear to have put much effort into marketing their product. The company
spent very little on advertising, depending largely on word of mouth, and local publicity. Store
openings were popular events in the communities, so often newspapers and other media provided
free publicity for the events. This strategy seems to still work well for new store openings, but
would not be sufficient to generate continuing business. This is evidenced by the fact that even
while new stores are opening, older stores within the same market are having to close. In short,
the companys marketing strategy appeared to consist merely of allowing its product to sell itself.

Financial Analysis:
The majority of Krispy Kremes financial struggles stem from its overexpansion in the
early 2000s. Capital expenditures on opening new company and franchise stores far
outweighed the decreasing revenues on increasingly unproductive stores. The company
began to close stores and taper domestic expansion in 2005, and its financials have seen
mixed results. The company reported revenues of $461 million in 2006, down 15% from
$543 million in 2005. Net income, however, was a loss of $41 million, which is much
smaller than the $135 million loss in 2005, signifying an actual increase in net income.
These odd statistics reflect the companys drive to cut costs. Indeed, operating costs in
2006 were $502 million, down 26% from $679 million in 20005.

Research and Development:

Research and development (R&D) refers to the investigative activities a business conducts to
improve existing products and procedures or to lead to the development of new products and
procedures. Krispy Kremes research and development department always try to utilize their
programs and their product quality to compete in the market and by R&D Krispy Kremes try to
find the unique procedures that will make their product different than competitors products.

Objectives of R&D:

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Maintaining the consistency of product quality.

R&D keeps timely flow to compete with competitors.

Updating the features, software, hardware etc. of product.

R&D helps to generate new innovative idea and also work on them.

In any uncertain situation of products R&D finds out the reason and take critical step to
solve.

Strategies of R&D:
This is the way by which corporation and R&D department intend to win. The overall work
process, design ,portfolio are the element of strategy. Krispy Kremes has its strategy to work in
R&D. In what way the procedure will proceed and the overall planning system of R&D are
strategies of R&D.
R&D provide the Krispy Kremes with competitive advantage by maintaining the consistency of
quality and also developing new ideas, uniqueness, immediate solving the arising issues and by
the executive functions of product.

Operation and Logistics: Our drivers are the people that keep everything moving.
Every morning at 4am you'll ensure that each Krispy Kreme truck is on the road and our
shops and in-store cabinets receive a fresh supply of great-tasting doughnuts in time for the
morning rush. You'll also merchandise our
doughnuts in selected Tesco, Moto and Welcome Break outlets throughout the UK, so play a big
part in growing the brand. It's a bit of a
logistical mission, but with your delivery experience in a similar setting, you'll be able to rise to
the challenge.

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Human Resource Management:

HRM policies:

Employees should not under any debt to get the job.

Employees should be hard working and work for companys success
Training program for the employees to get best outcome and utilize
their efficiency.
Boss and employees will work together and no dominate activities.
Employees should not take excessive work load.

Unfairness of giving promotion.

Rewarding and compensating problem.
Turn over problem.

HRM Issues:

The trends emerge from the activities is that every company has issues and benefit as well and
with them Krispy Kremes HRM quality is very good cause employees are committed towards
the company to work efficiently. They attend training program to utilize their knowledge and
they give best outcome of them. The competitive advantage of this the Krispy Kremes Inc. get
best outcome from their employees. Employees are very talented and hardworking than other
companies and their training program utilize their capabilities and their outcome is better than
others.

Information system:
1. Understanding business and information system requirements.
2. Analyzing financial performance.
3. Achieve operational excellence: analyzing competitive strategy.
4. Improving decision making: developing a Website privacy policy.
5. Improving decision marking: Designing the customer database
6. Improving operational excellence: Identifying supply chain management solutions

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7. Achieving operational excellence: Developing an E-Commerce strategy

8. Achieving operational excellence: Identifying opportunities for knowledge management

The trends emerge from this is that information is very critical for any organization and Krispy
Kreme has very effective information system that helps to do operation in strategic way. So for

achieving operational success and improving the strategic functions the information system is
very important for present and future as well.

C. Capabilities/core competencies:
Krispy Kreme Doughnuts began in 1937, after Vernon Rudolph began using a secret doughnut
recipe he had bought. Its success spread to other areas and it opened small chains of stores. The
stores made their own doughnuts from scratch using the recipe. To better the quality, the
company bought a mix plant, which enabled it to deliver the doughnut mix in all its stores.
Rudolph, assisted by other engineers developed a doughnut making equipment, which they used
to make the doughnuts. As the company expanded, it maintained the same design in all its stores.
The company has expanded and it has stores in Canada, Australia, London, Mexico, Puerto Rico,
Asia, and the Middle East. The stores maintain a consistency when making their doughnuts. In
addition to the doughnuts, it makes beverages and packaged sweets.
The company has approximately 4300 employees. The company owns and franchises several
stores around the world. By February 2013, the company had 97 company stores and 651
franchises. It owns the land and building of 42 stores, owns the building and leased the land of
23 stores, leases the land and building of nine stores, and leases space for 23 in-line and end cap
locations. It has leased the facility of its corporate headquarters, which is 86, 000 feet. The
company owns 150, 000 square foot facility where its doughnut mix plants are located, and
another 105, 000 square foot facility, which contains research, and development training
facilities as well as the manufacturing plant. The Original Glazed doughnut is the companys
signature doughnut. The company brews its coffee, beginning with fresh coffee beans. The
company has developed a sign, which when illuminated indicates that it is making its original
doughnuts. It has a manufacturing plant, which produces the doughnut mixes. The company has
developed a unique theater experience, which enables customers to see as their doughnuts are
made.

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D. Summary of Internal factors:

At present time in the industry as an internal factor marketing and operation and logistics are
important. Product prices, quality, how Krispy Kremes will promote their product in the market,
where should be their market position these are important for present as well as future. Krispy
Kremes cost efficiency and logistics that is how their distribution system are working and the
inventory to reach of finished products to the consumers are important. The capabilities of
manufacturing very innovative and unique products for the consumer attract the market and this
will be for future also.

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4. Analysis of strategic factors (SWOT Analysis):

Strengths

Brand loyalty
Selling internationally
Special secret recipe for doughnuts
Placing in Middle East market where

sweet products consumption is high

Baking doughnuts freshly in factory

stores
Innovative development through the

Weaknesses

Menu diversification
Non-various product segment
Decreasing in reputation
Decreasing in hold of company stores
Weak advertising
Problems on reaching customers

franchise stores

Opportunities

Development in brand name

Market diversification
Getting into organic markets
Customer oriented marketing and sales
policy

EFAS of Krispy Kreme:

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Threats

Competition

Dunkin Donuts
Risk of increasing sugar prices
Increasing in demand of organic foods
Falling profitability

with

Starbucks

and

External factors

Weight

Rating

Weighted

0.0 -

1-5

score

Comments

1.00
Opportunities
O1. Market diversification

.25

3.90

0.98

O2. Customer oriented

.20

3.7

0.74

.20

4.10

.82

.10

3.95

0.40

marketing and sales policy

Threats
T1. Competition with
Starbucks and Dunkin
Donuts
T2. Increasing in
demand of organic foods
Total

IFAS of Krispy Kreme:

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1.00

New market

Internal factors

Weight

Rating

Weighted

0.0 -

1-5

score

.20

4.00

0.80

.20

4.10

0.82

Comments

1.00
Strengths
S1. Innovative development
through the franchise stores.
S2. Brand loyalty

High customer
satisfaction level

Weaknesses
W1. Weak advertising

.20

3.90

0.78

W2. Menu Diversification.

.10

3.05

0.31

Total

1.00

SFAS table of Krispy Kreme:

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3.96

Strategic Factors

Weight

Rating

0.0 -1.0

1-5

S1. Innovative development

through the franchise stores.

.20

4.20

0.84

S2. Brand loyalty

.20

4.00

0.80

W1. Weak advertising

.20

3.90

0.78

W2. Menu Diversification.

.10

3.05

0.31

O1. Market diversification

.25

3.90

0.98

O2. Customer oriented

marketing and sales policy

.20

3.7

0.74

T1. Competition with

Starbucks and Dunkin
Donuts

.20

4.10

.82

T2. Increasing in demand of

organic foods.

.10

3.95

0.40

Total

1.00

TOWS Matrix:

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Weighted
score

Short
term

Intermidiate
term

Long
term

IFAS
EFAS

Weakness

i) Innovative development through

i) Weak advertising

the franchise stores.

ii) Menu Diversification.

ii) Brand loyalty

Opportunity
i)

Strength

Market diversification

SO Strategies

WO Strategies

Offer local fare in international

Develop Healthy Fare menu for

ii) Customer oriented marketing and stores ( s1+o1)

the customers ( w2+02)

sales policy
Threats
i)
ii)

ST Strategies

WT Strategies

Competition with Starbucks

New products should be develop to

Intensive use of advertisement in

and Dunkin Donuts

get competitive advantage( s1+t1)

social media and also in google can

Increasing in demand of
organic foods.

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give competitive advantage.(w1+t1)

VI. Strategic Alternatives And Recommendations:

Alt-1: Offer local fare in international stores
Pros: It will create and capture more market share.
Cons : Needed to hire expertise manager.

Alt-2: Develop Healthy Fare menu for the customers

Pros: Revenue growth will increase and also will be able to get competitive advantage.
Cons : It will take more time and costly also

Alt-3: New products should be develop to get competitive advantage

Pros: It will capture more consumer.
Cons :It will take more time and also time consuming.

Alt-4: Intensive use of advertisement in social media and also in google can give
competitive advantage.
Pros: it will attract more customer and also increase online sales.
Cons: It is much costly.

We strongly recommend alternative 2 and 4 for taking strategic decision.

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