krispy kreme doughnuts case study strategic management

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STRATEGIC MANAGEMENT 1 Krispy Kreme Doughnuts (KKD) — 2009

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This research is to investigate whether and how “7Ps marketing mix” elements, “brand equity” elements and “customer purchase behavior determinant” elements influence customer doughnut brand choice decision in Thailand, focusing on Mister Donut, Dunkin’ Donuts and Krispy Kreme Doughnut, meanwhile, the differences among these three brands and the key success factor of Krispy Kreme Doughnuts were studied by the author. This study is a quantitative research and survey strategy was selected by the author. Data was collected randomly online through 406 valid questionnaires and cross tabulation and multinomial logistic regression were used for data analysis. The result of the study is all of the investigating factors, product, price, place, promotion, people/personnel, process, physical environment, brand equity and customer purchase behavior determinants has positively influence on customer doughnut brand choice decision in Thailand, and some specifications of each factors are found signi...

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Strategic Management: A Competitive Advantage Approach, Concepts and Cases, 16/e by Fred R. David, Forest R. David

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Krispy Kreme Doughnuts, Inc., 2015

www.krispykreme.com , KKD

Headquartered in Winston-Salem, North Carolina, Krispy Kreme Doughnuts (KKD) serves doughnuts and coffee as well as other snack items. The company has locations in 23 different countries. Many Krispy Kreme shops are factory shops where customers can watch doughnuts being made and purchase fresh hot doughnuts as well. The factory stores are responsible for servicing local grocery stores and convenience stores. The KK Supply Chain provides raw materials for both franchise and company-owned stores in the doughnut-​making process. Krispy Kreme storeowners must purchase all materials from KK Supply Chain. Krispy Kreme reported total revenues in fiscal year end February 2015 of $490 million ...

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the Newsroom

Moscow is a big potential market for krispy kreme, says professor mike lord.

Reposted from Winston-Salem Journal | by Richard Craver

"To Russia with doughnuts" is the latest international venture for Krispy Kreme Doughnuts Inc.

The company said Monday that it has signed a franchisee deal with LLC Doughnuts Café to open 40 shops in Moscow over five years. LLC Doughnuts is owned by Arkady Novikov, owner of the Novikov Restaurant Group.

Jeff Welch, president of Krispy's international division, said in a statement the company is pleased to have gained a franchisee agreement with "someone so instrumental in the development of today's vibrant restaurant culture in Moscow."

"Arkady's great passion for the Krispy Kreme brand, combined with his strong organizational structure and years of successful restaurant experience in Moscow, are strong assets he can leverage."

Russia becomes the 21st country that Krispy Kreme has entered, but only the second in Europe after England. "We believe Krispy Kreme's premium products and one-of-a-kind experience will quickly become a favorite of Muscovites," Novikov said.

The biggest challenge for Krispy Kreme is how well "hot now" doughnuts will translate to Muscovite taste buds. Krispy Kreme officials could not be reached for comment about whether the company plans to include local flavors in its Moscow shops.

Although international franchise sales represented 6 percent of Krispy Kreme's revenue in its fourth quarter of 2012, which ended Jan. 29, its global expansion is a big part of its growth strategy.

In February 2011, Krispy Kreme said its goal was having close to 1,000 international shops by 2016.

The company ended fiscal 2012 with 602 franchise stores and 92 company stores, with international representing 460 franchise stores. It plans to add 75 international franchise stores during fiscal 2013.

The strategy could be pivotal because the jobs of its 3,900 employees, including 408 in Winston-Salem and an additional 102 elsewhere in the Triad, are riding on Krispy Kreme's ability to make its doughnuts a regular choice rather than an occasional treat in international markets.

Michael Lord, an associate professor of strategy and entrepreneurship at Wake Forest University, said Russia has been traditionally "a very difficult market for many companies to figure out, and to successfully operate in."

"Moscow is a big potential market," Lord said. "They should be able to get significant economies of scale in Moscow alone if things work out right. Anywhere else in Russia will be a bonus."

In the past nine months, Krispy Kreme has announced major expansions for England (35 planned new shops for a total of 80), Japan (73 planned new shops for a total of 94) and Mexico (58 planned new shops for a total of 128).  

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Krispy Kreme expands into Morocco with new store opening

The expansion is the result of a partnership with franchisee Americana.

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American doughnut and coffeehouse chain Krispy Kreme will enter the Moroccan market with the launch of its first store in the country on 9 August 2024.

The store will be located in the Arribat Centre in the country’s capital, Rabat.

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The move is part of the company’s strategic growth plan to extend its global reach through a capital-efficient hub and spoke model.

 The Moroccan store will feature a selection of 12 doughnuts, including the signature Original Glazed, alongside chocolate, fruit, hazelnut, cream and jam-filled options and gluten-free and vegan varieties.

Krispy Kreme has developed exclusive doughnuts inspired by Moroccan flavours. These include a caramel doughnut, evoking the popular dulce de leche and churros, and a cinnamon doughnut that mirrors traditional Moroccan spices. A lemon dream doughnut has also been developed, celebrating the prevalent use of citrus in the local cuisine.

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The store will also provide 100% Arabica coffee, cappuccinos, lattes, teas and fruit frappés.

Krispy Kreme’s Moroccan outlet will feature the Hot Light shop concept, also known as the Theatre Shop. This allows patrons to observe the doughnuts being glazed and served fresh from the production line.

Krispy Kreme chief development officer Raphael Duvivier said: “Our decision to enter the Moroccan market is part of our broader expansion strategy in the Middle East and North Africa region.

“We know our iconic doughnuts and coffee will add an extra touch of joy to Moroccan consumers and bolster our presence in this crucial market.”

In August 2024, Krispy Kreme teamed up with Gleseadas Originales in a joint venture to break into the Spanish market – a key move in its strategy for international expansion.

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Why are krispy kreme (dnut) shares soaring today, what happened:.

Shares of doughnut chain Krispy Kreme (NASDAQ:DNUT) jumped 14.8% in the morning session after the company reported second quarter earnings results. Krispy Kreme provided optimistic full-year revenue guidance, which blew past analysts' expectations. Its revenue also outperformed Wall Street's estimates. Given the strong topline performance indicating healthy near-term demand, the company announced plans to launch in Germany and Brazil. Management also noted that expansion in the U.S. market is accelerating in light of the recent partnership with McDonald's. On the other hand, its EPS missed, and its full-year earnings guidance fell short. Overall, this was a mixed but decent quarter for Krispy Kreme.

Is now the time to buy Krispy Kreme? Access our full analysis report here, it's free .

What is the market telling us:

Krispy Kreme's shares are not very volatile than the market average and over the last year have had only 14 moves greater than 5%. Moves this big are very rare for Krispy Kreme and that is indicating to us that this news had a significant impact on the market's perception of the business.

The biggest move we wrote about over the last year was 4 months ago, when the stock gained 36.5% after company announced in a press release that it would provide fresh doughnuts daily at McDonald's restaurants nationwide (in the United States). According to the report, the Phased rollout will begin in the second half of 2024, with nationwide availability expected by the end of 2026. This is positive news for Krispy Kreme as the move should accelerate its sales velocity and eventually be accretive to revenue growth given the power of the McDonald's brand.

Krispy Kreme is down 29.6% since the beginning of the year, and at $10.37 per share it is trading 40.2% below its 52-week high of $17.35 from March 2024. Investors who bought $1,000 worth of Krispy Kreme's shares at the IPO in June 2021 would now be looking at an investment worth $493.81.

When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we’ve found one, a low-priced stock that is gushing free cash flow AND buying back shares. Click here to claim your Special Free Report on a fallen angel growth story that is already recovering from a setback .

US Inflation:

Krispy Kreme CFO Braces for Double-Digit Inflation in Key Costs

• CFO sees “mixed bag” for prices amid deflation in some items
• Company bought protection against commodity cost increases

Krispy Kreme Inc. said it’s expecting double-digit price increases in some of the ingredients for its doughnuts, highlighting the cost pressures facing US companies.

The company expects mid- to high-single digit inflation this year, Chief Financial Officer Jeremiah Ashukian said on a call Tuesday discussing its latest results. Price gains for commodities like sugar may exceed 20% while the increases for items such as cartons may be in the low double digits. California’s minimum wage increase may result in high single-digit or low double-digit labor inflation, Ashukian said.

First Krispy Kreme Doughnut Shop Set To Open in Moscow

Krispy Kreme Partners with Russian Restaurateur Arkady Novikov to Bring Its Signature Treats to Russia

News provided by

Sep 10, 2013, 06:00 ET

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WINSTON-SALEM, N.C. , Sept. 10, 2013 /PRNewswire/ -- In collaboration with Russian restaurateur and franchise partner Arkady Novikov , owner and operator of LLC Doughnuts Cafe, the first Krispy Kreme doughnut shop in Moscow is scheduled to open on Thursday, September 12 , 2013.  With the opening of the new Moscow location, the international sweet treat retailer will have a presence in 22 countries around the world.

(Photo: http://photos.prnewswire.com/prnh/20130910/CL75833 )

"We look forward to working with Mr. Novikov and the LLC Doughnuts Cafe team as they continue to expand in Moscow ," explains Jeff Welch , Krispy Kreme President-International.  "With their vast knowledge of the appetites and attitudes of Muscovites, and proven track record of success, it is our hope that our beloved brand will become an integral part of Moscow's culture for many years to come."

Krispy Kreme Doughnut Corporation announced a development agreement for Moscow with LLC Doughnuts Cafe, wholly owned and operated by Arkady Novikov , owner of the Novikov Restaurant Group, in April 2012 . Under the agreement, LLC Doughnuts Cafe has agreed to build 40 Krispy Kreme shops in the city of Moscow .

"I was very inspired by the sensational taste of Krispy Kreme doughnuts when I tried them for the first time during a trip to London ," says Arkady Novikov . "Today, I am extremely proud to have the opportunity to introduce this beloved brand and Krispy Kreme's great-tasting doughnuts to my fellow Muscovites. I am confident they will enjoy them as much as I do."

The approximately 300 square meter (3229 square feet) Krispy Kreme doughnut shop is located on Nikolskaya Street, just behind Moscow's famous Gum Shopping Arcade and Red Square, making it the perfect destination for area shoppers and tourists. The menu will feature an assortment of iced, glazed, and filled doughnuts, as well as an array of premium coffees and espressos, teas and iced beverages. 

While inside the shop, customers can enjoy the delicious sights and aromas of fresh doughnuts being made and served from the production line through Krispy Kreme's iconic Doughnut Theater™.  While the signature Original Glazed® doughnuts are being made, Krispy Kreme's Hot Light™ will be illuminated to alert customers that doughnuts are being made and served Hot Now® in the store.

"With an expanding presence of over 540 locations in 21 international markets, Krispy Kreme has experienced dramatic international growth over the last seven years," explains James Morgan , CEO and President of Krispy Kreme.  "We are excited to add Moscow to our growing list of international markets, and look forward to our continued growth."

Krispy Kreme's most recent international market openings include Edinburgh and Bangalore , with the opening of a new Singapore location planned for later this year. Additionally, Krispy Kreme is currently working on new development opportunities in Central and South America .

About Krispy Kreme Krispy Kreme (NYSE: KKD ) is an international retailer of premium-quality sweet treats, including its signature Original Glazed(R) doughnut. Headquartered in Winston-Salem, N.C. , the Company has offered the highest-quality doughnuts and great-tasting coffee since it was founded in 1937. Krispy Kreme is proud of its Fundraising program, which for decades has helped non-profit organizations raise millions of dollars in needed funds. Today, Krispy Kreme can be found in over 785 locations in 21 countries around the world. Visit us at www.KrispyKreme.com .                                                         

About LLC Doughnuts Cafe LLC Doughnuts Cafe is a licensed franchisee of Krispy Kreme Doughnut Corporation in Moscow, Russia , wholly owned and operated by Arkady Novikov . Mr. Novikov also owns and operates the Moscow -based Novikov Restaurant Group. The Novikov Restaurant Group includes a variety of businesses located in Moscow , St. Petersburg and London, U.K. including more than 40 stand-alone family and fine dining restaurants, plus the casual dining chains Barashka, Kish Mish, Delis Cafe and Prime Star. In addition, the Novikov Restaurant Group owns and operates the karaoke bar Krik, seafood supplier NRG, agricultural enterprise Agronom, florist chain Flower Studio 55, professional catering company Novikov Catering, luxury real estate firm Mainstreet and the balanced food project Just for You.

Information contained in this press release, other than historical information, should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management's beliefs, assumptions and expectations of our future economic performance, considering the information currently available to management. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause our actual results, performance or financial condition to differ materially from the expectations of future results, performance or financial condition we express or imply in any forward-looking statements. The words "believe," "may," "forecast," "could," "will," "should," "would," "anticipate," "estimate," "expect," "intend," "objective," "seek," "strive" or similar words, or the negative of these words, identify forward-looking statements. Factors that could contribute to these differences include, but are not limited to: the quality of Company and franchise store operations; our ability, and our dependence on the ability of our franchisees, to execute on our and their business plans; our relationships with our franchisees; our ability to implement our international growth strategy; our ability to implement our domestic small shop operating model; political, economic, currency and other risks associated with our international operations; the price and availability of raw materials needed to produce doughnut mixes and other ingredients, and the price of motor fuel; our relationships with wholesale customers; our ability to protect our trademarks and trade secrets; changes in customer preferences and perceptions; risks associated with competition; risks related to the food service industry, including food safety and protection of personal information; compliance with government regulations relating to food products and franchising; increased costs or other effects of new government regulations relating to healthcare benefits; and risks associated with implementation of new technology platforms. These and other risks and uncertainties, which are described in more detail in the Company's most recent Annual Report on Form 10-K and other reports and statements filed with the United States Securities and Exchange Commission, are difficult to predict, involve uncertainties that may materially affect actual results and may be beyond the Company's control, and could cause actual results, performance or achievements to be materially different from those expressed or implied by any of these forward-looking statements. New factors emerge from time to time, and it is not possible for management to predict all such factors or to assess the impact of each such factor on the Company. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

SOURCE Krispy Kreme Doughnut Corporation

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