1

KKDs Proposed Mission and Vision Statement

Vision KKD
To be the Leading donuts manufacture provider while sharing delicious
taste and joyful memories.

Mission
Our mission is to be the profitable organization and strive to be the best
glaze doughnuts provider all over the world by using the modern
machines, while exceeding shareholders values and employees
expectations.

2


Internal Factor Evaluation (IFE) Matrix
Key internal factors Weight Rating Weighted
Score
STRENGTHS
Affordable, high-quality glazed doughnuts with
strong visual appeal and "one-of-a-kind"
taste (Wide range of doughnuts in its product line and
specialized in it)
.10 4 .40
Market research shows appeal extends to
all major demographic groups including age
and income
.06 3 .18
Vertical integration helps ensure high
quality product (They use specialized doughnut-making
equipment and specific doughnut mixes that each store,
whether franchise or company owned, are required to
purchase)
.08 4 .28
Consistent expansion; now in 16 countries .08 3 .24
Product sold at thousands of
supermarkets, convenience stores, and retail
outlets in U.S.
.06 3 .18
People know Krispy Kreme (brand name) ( Very old brand
established in 1937 and was also leader in doughnuts
industry for many years till 2000)
.12 3 .36

WEAKNESSES
Return on equity, assets, and investments
all negative in the trailing twelve months;
skill of mgmt. is questionable (Assets decreased from 202
mill to 194 mill from year year 20808 to 2009)
.12 1 .12
Shareholders have not received dividends
recently, and are not expected to in near
future; stock price in state of flux ( share value decreased
from 40 $ to less than 10 $)
.08 1 .08
Closing stores when stores should be
opening globally at steady rate to keep up
with competitors' growth (company stores reduced from 105
to 98 from year 2008 to year 2009)
.08 2 .16
Product line slow to expand with nothing outside "sweet
treats" to draw in health conscious.
customers
.10 1 .10

Limited non-breakfast menu items

.06 2 .12
.06 2 .12

3


Limited amount of non-snack food items

TOTAL 1 2.34


External Factor Evaluation
Key external factors
Weight Rating Weighted
Score
OPPORTUNITIES
Families crave convenience because of
busy lifestyles(60 % increase eating trends outside the home
in year 2007 in U.S as well in many other countries)
.08 3 .24
Asians love sweet food.

.08 3 .24
Starbucks lacks a diversified product line. .10 3 .30
Growth in two-income households (More than 60 percent of
families with children under age 18 had both parents
employed outside the home in 2007-2008 in U.S)
.06 4 .24
South America, Africa, and Southern Asia
are markets to conquer(still demand for doughnuts)
.12 4 .48
Popularity of American food brands in overseas markets (
e.g. brands McDonalds, Pizza Hut , and Starbucks becoming
poplar all over the world)
.08 3 .24

THREATS
Dunkin' Donuts presently dominates the
doughnut market, particularly in
northeastern U.S.(more than 6700 stores in U.S)
.10 4 .40
People are becoming more health conscious,
which does not bode well for high sugar,
High-fat treats.
.10 2 .20
Dunkin Donuts has approximately 25 times the
amount of stores worldwide that Krispy
Kreme Donut has.
.06 3 .18
Recession have stifled the world
economy, decreasing discretionary income(unemployment
(more than 9% in U.S in 2009-10)
.06 1 .06
Cultural differences in breakfast and snack foods .08 2 .16
Substitutes products (fast food restaurants are growing
rapidly with rate of 20 % annual growth)
.08 3 .24
TOTAL
1 2.5


4



CPM

Dunkin Donuts star bucks KKD
Critical
Success
Factors
Weight Rating WS Rating WS Rating WS
Advertising
.11 4 .44 3 .33 2 .22
Product
quality
.15 3 .45 3 45 4 .60
Product
Diversity
.08 2 .16 1 .08 2 .16
Price
competitive
ness
.08 3 .24 2 .16 3 .24
Financial
Position
.10 3 .30 3 .30 2 .20
Manageme
nt
.10 3 .30 2 .20 3 .30
remotsuC
yolayml
.10 4 .40 3 .30 3 .30
Global
Expansion
.13 3 .39 4 .52 2 .26
Market
Share
.10 3 .30 3 .30 2 .20

5


Sales
Distributio
n
.05 2 .10 3 .15 3 .15
TOTAL
1

3.08
4
.2.79128 2.632
2.632
.63























6


SWOT Matrix

STRENGTHS
1. Affordable, high-quality
doughnuts with strong
visual appeal and "one-of-a-
kind" taste.
2. Market research shows
appeal extends to all major
demographic groups
including age and income
3. Vertical integration helps
ensure high quality product
4. Consistent expansion; now
in 16 countries
5. Product sold at thousands of
Super markets, convenience
stores, and retail outlets
through U.S.
6. People know Krispy Kreme
(brand name)

WEAKNESSES
1. Return on equity, assets, and
investments all negative in the
trailing twelve months; skill of
mgmt. is questionable
2. Shareholders have not received
dividends recently, and are not
expected to in near future; stock
price in state of flux.
3. Closing stores when stores should
be opening globally at steady rate
to keep up with competitors'
growth
4. Product line slow to expand with
nothing outside "sweet treats" to
draw in health conscious customers
5. Limited non-breakfast menu
items
6. Limited amount of non-snack food
items
Opportunities
1. Families crave
convenience because
of busy lifestyles
2. Asians love sweets
and are open to
trying foreign foods
3. Starbucks lacks a
diversified and
distinctive pastry line
4. Growth in two-
income households
(More than 60
percent
5. South America,
Africa, and Southern
Asia are markets to
conquer
6. Popularity of
American food
brands in overseas
markets
SO Strategies

1.) SO Strategies
KKD Should open more
franchises in Asian
countries
(S2,S4,O5)

2.) Introduce diversified
products e.g pastries
(s4,o3)
3.) Should start
placement in
cafeterias of offices,
hospitals,
universities and
other workplaces.
(S2,S5,O1,O4)
WO Strategies

1.) Introduce sugar free doughnuts
(o1,w4)

2.) Start offering fast food
(o1,w5)

3) Should offer breakfast in some
areas at startup to assess the trend of
market.

(W1,W6,O1,O4)

7


Threats
1. Dunkin' Donuts
presently dominates
the doughnut market,
particularly in
northeastern U.S.
2. People are becoming
more health
conscious, which does
not bode well for high
sugar, high-fat treats
3. Dunkin Donuts has
approximately 25
times the amount of
stores worldwide that
Krispy Kreme Donut
has.
4. Recession have stifled
the world economy,
decreasing
discretionary income
5. Cultural differences
in breakfast and
snack foods
6. Substitutes products
(fast food restaurants
are growing rapidly
with rate of 20 %
annual growth)
ST Strategies

1. KKD should penetrate into
the European market by
decreasing its prices in the
first few months, in this way
many price conscious
Europeans will prefer KKD
over its competitors.
(S1,S3,S4_T1,T4,T6)

2. KKD should give out new
franchise licenses to the
financially sound firms
throughout the word.
(S2,S4,S5_T1,T3)

WT Strategies

1.) KKD should reconsider its
target market, and should
focus on targeting new
markets with some growth
potential.
(W3_T1,T4)














8


QSPM
A QSPM for Krispy Kreme Doughnuts


Strategic Alternatives



(1)
Close unprofitable
stores, and focus on
other domestic areas
and global market.


(2)
Diversify and
expand
product mix
Key Factors
Weight Rating WS Rating WS
OPPORTUNITIES :
1. Families crave convenience because of busy
lifestyles
2. Asians love sweets and are open to trying
foreign foods
3. Starbucks lacks a diversified and distinctive
pastry line
4. Growth in two-income households (More than
60 percent
5. South America, Africa, and Southern Asia are
markets to conquer
6. Popularity of American food brands in overseas


.08

.08

.10


.06

.12

.08


2

0

3

0


4

0


.16



.30




.48


3



4




2


.24



.40




.24
THREATS:
1. Dunkin' Donuts presently dominates the
doughnut market, particularly in northeastern
U.S.
2. People are becoming more health conscious,
which does not bode well for high sugar, high-
fat treats
3. Dunkin Donuts has approximately 25 times the
amount of stores worldwide that Krispy Kreme
Donut has.
4. Recession have stifled the world economy,
decreasing discretionary income
5. Cultural differences in breakfast and snack


.10


.10



.06


.06


.08


3


0



0


3


0


.30


0



0


.18


0


2


0



0


2


0


.20


0



0


.12


0

9


foods
6. Substitutes products (fast food restaurants are
growing rapidly with rate of 20 % annual
growth)

.08

2

.16




4

.32


TOTAL
1
STRENGTHS
1. Affordable, high-quality doughnuts with strong
visual appeal and "one-of-a-kind" taste.
2. Market research shows appeal extends to all
major demographic groups including age and
income
3. Vertical integration helps ensure high quality
product
4. Consistent expansion; now in 16 countries
5. Product sold at thousands of Super markets,
convenience stores, and retail outlets through
U.S.
6. People know Krispy Kreme (brand name)



.10

.06



.08

.08
.06



.12


0

0



3

4
0



3








.24

.32
0



.36


0

0



2

3
0



4


0

0



.16

.24
0



.48
WEAKNESSES
1. Return on equity, assets, and investments all
negative in the trailing twelve months; skill of
mgmt. is questionable
2. Shareholders have not received dividends
recently, and are not expected to in near future;
stock price in state of flux.
3. Closing stores when stores should be opening
globally at steady rate to keep up with
competitors' growth
4. Product line slow to expand with nothing
outside "sweet treats" to draw in health
conscious customers
5. Limited non-breakfast menu items
6. Limited amount of non-snack food items


.12



.08


.08


.10



.06
.06


4



0


2


3



0
0


.48



0


.16


.30



0
0


2



0


1


2



0
0



.24



0


.08


.20



0
0

Total
1 3.44 2.92



10


Recommendation (QSPM): As Close unprofitable stores, and focus on other domestic areas
and global market. Strategy has scored more so it should be followed rather than other
strategies.

SPACE MATRIX
Financial Position Factors:
1. Profit +1
2. Sales Growth +2
3. Cash Flow +2
4. EPS +1
5. Net Income +1
Total = +7 Average = 7/5 = 1.40

Competitive Position Factors:
1. Customer Loyalty -4
2. Product Quality -2
3. Market Share -5
4. Capacity -2
5. Vertical Integration -3

Total = -16 Average = -16/5 = -3.20

Stability Position Factors:
1. Competitive Pressure -2
2. Culture -4
3. Barriers to entry -4
4. Rate of inflation -4
5. Barriers to entry -3
Total = -17 Average = -17/5 = -3.40


11





Industry Position Factors:
1. Profit Potential +2
2. Tax +2
3. Growth Potential +3
4. Resource Utilization +2
5. Demand Variability +2
Total = 11 Average = 11/5 = 2.20



+6 Aggressive
Conservative +5
+4
+3
+2
+1
-6 -5 -4 -3 -2 -1 -1
-2
Defensive -3
KKD(Krispy Kreme) will -4 Competitive
follow Retrenchment Strategy -5
-6



12



Directional Vector Coordinates: x-axis: (CP + IP) = (-3.2 + 2.2) = -1.0
Y-axis: (FP + SP) = (1.40 3.4) = -2.0