Krispy Kreme Case Study

Summarize In early 2004, Krispy Kreme’s prospects appeared bright. With 357 Krispy Kreme stores in 45 states, Canada, Great Britain, Australia, and Mexico, the company was riding the crest of customer enthusiasm for its light, warm, melt-in-your-mouth doughnuts. In 1933, Vernon Rudolph bought a doughnut shop in Paducah, Kentucky, from Lou LeBeau. His purchase included the company’s assists and goodwill, the Krispy Kreme name, and rights to a secret yeast-raised doughnut recipe that LeBeau had created in New Orleans years earlier. Several years after, Rudolph and his partner, were looking for a larger market, and moved their operations to Nashville, Tennessee. In the early 1990s, with interest rates falling and much of the buyout debt paid down, the company began experimenting cautiously with expanding under Scott Livengood, the company’s newly pointed president and COO. Livengood, 48, joined Krispy Kreme’s human relations department in 1978. By the mid-1990s, with fewer than 100 franchised and company-owned stores and corporate sales stuck in the $110-$120 million range for six years, company executives determined that it was time for a new strategy and aggressive expansion outside the Southeast. Beginning in 1996, Krispy Kreme began implementing a new strategy to reposition the company, shifting focus from a wholesale bakery strategy to a specialty retail strategy that promoted sales at the company’s own retail outlets and emphasized the “hot doughnut experience” so often stressed in customers’ Krispy Kreme stories.

2. Problems Problems include but not limited too; Competitors already have the market saturated. They do not offer everything that the competitors offer. They have much fewer stores then most of the competitors. For example Dunkin' Doughnuts in New York City is nearly on every other block while Krispy Kreme only