Strengths – Krispy Kreme Doughnuts provides products which are affordable and high quality in nature. The doughnuts provided by the organization are “one-of-a-kind” taste. The market research has shown that the appeal of the company has extended to different demographic groups which include income and age. The “hot shop” based stores of Krispy Kreme Doughnuts are able to provide high levels customer experience. The vertical integration based process has been helpful in ensuring the quality of products (Barros, Hernangómez & Martin-Cruz, 2016).
Weaknesses – The assets of the organization, return based on equity have been negative from the last twelve months and the skills shown by the management are also not effective. The shareholders of KKD have not been provided with the effective amounts of dividends and the stock prices have also started falling rapidly. Many stores of KKD have started closing down due to which the organization is not able to keep up with the growth rates (Daspit et al., 2017).
Opportunities – KKD is aiming at diversifying its products to different markets. The levels of problem detection in the management has increased which has led to many changes in the operations. The organization has the opportunity to develop programs which are based on social outreach and promote different objectives that are customer based and are related to the mission of KKD. KKD aims to reach the market in order to understand the customers and their objectives in an effective manner (Demir, Wennberg & McKelvie, 2017).
Threats – High levels of competition in the industry and increase in global recognition of the organizations like, Dunkin Donuts and Starbucks has affected the revenues of KKD. The international presence of competitors in the industry has been a major threat to the operations of KKD. The number of stores which of the competitors of KKD which operate in the confectionery industry are much more as compared to the organization. The cash flows which are received by the organization are quite low (Durand, Grant & Madsen, 2017).
Rivalry among the competitors – The high concentration levels of rivals including, the local chains and organizations like, Starbucks, Tim Hortons, Dunkin Brands have increased the levels of rivalry in a huge manner. Static levels of market growth, high costs and perishable products in the range have been an important factor in increasing the levels of rivalry within the industry. The competitors in the industry have also started competing for similar types of products which are offered to the similar customers as well (Dyer et al., 2015).
Threats based on the new entrants – The large requirements of capital for building chain of stores is a major problem based on entry of new organizations. The market is also lacking favourable locations for the organizations. Differentiation of the brand and products which are offered by the organizations in the industry needs to high which becomes quite difficult for the new entrants. The financial requirements for different individual stores are quite high which is provides huge barriers for new organizations (Engert, Rauter & Baumgartner, 2016).
Threats based on the substitutes – The choice based on alternatives which are provided to the customers is large which include, cakes, energy drinks, ice-cream, chocolate and biscuits. The consumers can thereby choose from various organizations that have their operations in the industry and offer similar types of products as well. The full menu based eateries are also able to provide tough competition to the organization based on products which are provided to customers (Ethiraj, Gambardella & Helfat, 2018).
Bargaining power of the suppliers – The business operations of Krispy Kreme Doughnuts are vertically integrated in nature. The raw ingredients which are used for the manufacture of products are commoditised. The organization also has huge number of suppliers from which they need to choose and the switching costs are also low. The power of suppliers with respect to the operations of Krispy Kreme Doughnuts is also quite low (Frynas & Mellahi, 2015).
Bargaining power of the buyers – The industry consists of huge number of buyers who are interested in buying the products. The buyers also do not have to incur any costs based on the switching of organizations from which they wish to buy the products. The power of buyers is thereby quite low in the market. Due to the availability of large number of buyers, they are not able to influence the prices which are charged from them (Hill, Jones & Schilling, 2014).
First strategy – Krispy Kreme Doughnuts can increase its product line in order to differentiate itself from the competitors which exist in the industry. This will serve as an effective growth opportunity for the company.
Second strategy – Krispy Kreme Doughnuts can develop strategies in order to improve the social media based operations in an effective manner. This will help the company to reach the consumers faster and increase the presence of the brand as well (Hubbard, Rice & Galvin, 2014).
Third strategy – KKD can make plans of increasing its global presence in order to compete with the large multinational organizations that already operate in the industry.
Fourth strategy – KKD can aim at increasing its presence in the local areas by opening more stores all over the country and the attract the consumers (Karadag, 2015).
Fifth strategy – KKD needs to build the financial resources in such a manner which will be helpful in the development of the organization and its expansion based plans as well.
First strategy – The affordability levels of the products which are offered by Krispy Kreme Doughnuts can be used in order to compete with the large multinational organizations like Tim Hortons. KKD thereby needs to differentiate itself with the help cost leadership based strategy.
Second strategy – The products of KKD are able to appeal to the consumers belonging to different age groups. The organization thereby needs to improve the promotional activities in order to reach consumers (Kasemsap, 2014).
Third strategy – KKD provides high levels of customer experience with the help of its “hot shops”. The organization thereby needs to improve its services in order to increase the appeal among consumers.
Fourth strategy – KKD needs to provide the required dividends to shareholders in order to ensure that the organization can maintain its position in the industry. KKD can provide the dividends to shareholders with the help proper resources and products (Meyer et al., 2017).
Fifth strategy – KKD needs to increase the number of stores and also try to reach the consumers with the help of online channels. The online channels will be able to provide effective opportunities to the organization in order to reach the consumers.
Answer to Question 5
First strategic option – This strategic option will be based on increasing the online channels of the organization. The organization needs to develop its website in such a manner which will be interactive in nature and will provide the products to consumers at their doorsteps. The online operations of the organization will be able to increase the reach of KKD to the different customers who are a part of the industry (Michael, Storey & Thomas, 2017).
Second strategic option – The second option is related to development of services which are offered to the consumers in the factory stores of the organization. The factory stores will be able to provide freshly made doughnuts and differentiate the operations of the company from its competitors. Proper development of services is considered to be an important part of the differentiation based activities of the organization. The service oriented operations of a company are considered to be important factors which can affect the revenues and profitability levels of KKD. Service provided to the consumers is considered to be a major part of development of competitive advantage (Morschett, Schramm-Klein & Zentes, 2015).
Third strategic option – The third option is based on the ways by which the company has started focussing on the development retail stores rather than the wholesale based operations. The organization can thereby increase its retail presence in the industry with the help of proper development of these stores. This option is related to the focus which is can provided by the company on developing proper retail stores of KKD which can help in competing with the others in the industry (Sakas, Vlachos & Nasiopoulos, 2014).
The strategic option which can be implemented by Krispy Kreme Doughnuts is based on the development of retail stores all over USA and other countries as well. The organization will be able to provide freshly baked doughnuts to the customers with the help of these retail stores. KKD can also aim at increasing the number of products which are offered to the consumers in order to attract them towards its stores (Simon, Fischbach & Schoder, 2014). The competitors of the organization, like, Tim Hortons and Dunkin Brands provide other products like coffee to the customers. KKD can thereby provide different types of products to the consumers in order to compete with the variety which is offered by its competitors. KKD will be able to increase the levels of revenues of the organization with the help of high variety of products. The company will be able to increase its presence in the industry. The international expansion will also be possible with the help of proper operations of the retail stores in different areas of the world (Steinbach et al., 2017).
Strategic objectives of Krispy Kreme Doughnuts
The objectives which have been developed by the company need to be monitored after implementation in order to ensure their effectiveness. Implementation of the first objective can be monitored with the help of analysis of the financial resources which have been gained by the company. Effectiveness of implementation of the second objective can be monitored by analysing the progress which has been made by the organization in order to start its operations in Asian countries. Effectiveness of the third objective can be monitored with the help of proper analysis of the recognition levels of the brands as compared to the competitors (Trigeorgis & Reuer, 2017).
The vision statement which had been developed by the organization previously is based on the aim of becoming a global leader in the production of doughnuts and further creating moments as well. The change which can be made in the vision statement is based on developing a proper recognition of the brand as compared to the competitors (Krispykreme.com, 2018).
The mission statement which was formed by the company previously was based on the warm memories and good times which can be provided to the consumers. The basic qualities of the organization mainly include high levels of quality, caring service and innovative ideas. The change which can be suggested in the mission statement of the organization is based on the ways by which KKD can provide larger variety of products to the consumers. The variety of products are based on the ways by which the organization is able to attract the consumers towards its retail stores (Krispykreme.com, 2018).
The stakeholders of an organization are able to play a key role in the ways by which it is able to fulfil the strategic vision in an effective manner. Krispy Kreme Doughnuts can also use the stakeholders in order to achieve the strategic vision. The customers are considered to be the most important stakeholders of the organization who are helpful in achievement of strategic vision. The suppliers of KKD can also play a key role in the ways by which the organization is able to reach the strategic vision which has been developed. Timely supply of raw materials is able to play a key role in development of the organization (Simon, Fischbach & Schoder, 2014). The creditors can also act as an important stakeholder in the operations of KKD and achievement of strategic vision as well. Creditors will be able to provide effective financial resources to the organization in order to improve its operations.
According to Sakas, Vlachos and Nasiopoulos, (2014), the organization needs to engage with the stakeholders in an effective manner with the help of different types of strategies. First major communication strategy which can be implemented by Krispy Kreme Doughnuts in order to engage the stakeholders is based on the proper usage of online communication based channels. The online communication based activities are helpful in engaging the customers with the organization. The company will be able to connect with the consumers and understand their needs with the help of this communication based strategy. The online communication channels are also highly important for the connection which can be developed with the stakeholders and thereby updating the operations of the company in an effective manner as well.
As discussed by Michael, Storey and Thomas (2017), on the other hand, second communication strategy which can be implemented by the company in order to engage the stakeholders is based on monitoring the feedback which is provided by the stakeholders. The feedback of stakeholders will play a key role in the ways by which the organization will be able to engage the stakeholders and reach the strategic vision as well. The feedback which is provided by the other two major stakeholders like, creditors and suppliers is able to play a major role in the operations of KKD and profitability based levels as well. The two communication strategies which have been suggested to Krispy Kreme Doughnuts are based on the ways by which the organization is able to engage the stakeholders within the organizational processes. The stakeholders will further help in achievement of the strategic vision effectively.
References
Barros, I., Hernangómez, J. & Martin-Cruz, N. (2016). A theoretical model of strategic management of family firms. A dynamic capabilities approach. Journal of Family Business Strategy, 7(3), pp.149-159.
Daspit, J.J., Chrisman, J.J., Sharma, P., Pearson, A.W. & Long, R.G. (2017). A strategic management perspective of the family firm: Past trends, new insights, and future directions. Journal of Managerial Issues, 29(1), p.6.
Demir, R., Wennberg, K. & McKelvie, A. (2017). The strategic management of high-growth firms: a review and theoretical conceptualization. Long Range Planning, 50(4), pp.431-456.
Durand, R., Grant, R.M. & Madsen, T.L. (2017). The expanding domain of strategic management research and the quest for integration. Strategic Management Journal, 38(1), pp.4-16.
Dyer, J.H., Godfrey, P., Jensen, R. & Bryce, D. (2015). Strategic Management: Concepts and Cases. Wiley Global Education.
Engert, S., Rauter, R. & Baumgartner, R.J. (2016). Exploring the integration of corporate sustainability into strategic management: a literature review. Journal of cleaner production, 112, pp.2833-2850.
Ethiraj, S.K., Gambardella, A. & Helfat, C.E. (2018). Theory in strategic management. Strategic Management Journal, 39(6), pp.1529-1529.
Frynas, J.G. & Mellahi, K. (2015). Global strategic management. Oxford University Press, USA.
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Hubbard, G., Rice, J. & Galvin, P. (2014). Strategic management. Pearson Australia.
Karadag, H. (2015). Financial management challenges in small and medium-sized enterprises: A strategic management approach. Emerging Markets Journal, 5(1), p.26.
Kasemsap, K. (2014). Strategic innovation management: An integrative framework and causal model of knowledge management, strategic orientation, organizational innovation, and organizational performance. In Strategic approaches for human capital management and development in a turbulent economy (pp. 102-116). IGI Global.
Krispykreme.com (2018). Krispy Kreme – Legal. [online] Krispykreme.com. Available at: https://www.krispykreme.com/about [Accessed 3 Nov. 2018].
Meyer, G.D., Neck, H.M. & Meeks, M.D. (2017). The entrepreneurship?strategic management interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
Michael, S., Storey, D. & Thomas, H. (2017). Discovery and coordination in strategic management and entrepreneurship. Strategic entrepreneurship: Creating a new mindset, pp.45-65.
Morschett, D., Schramm-Klein, H. & Zentes, J. (2015). Strategic international management (pp. 978-3658078836). Springer.
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Steinbach, A.L., Holcomb, T.R., Holmes, R.M., Devers, C.E. & Cannella, A.A. (2017). Top management team incentive heterogeneity, strategic investment behavior, and performance: A contingency theory of incentive alignment. Strategic Management Journal, 38(8), pp.1701-1720.
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