Krispy Kreme

Krispy Kreme

Krispy Kreme is a leading branded retailer and wholesaler of high-quality doughnuts and packaged sweets, including its Original Glazed doughnut. Headquartered in Winston-Salem, North Carolina, the Company has offered the highest quality doughnuts and great tasting coffee since it was founded in 1937. Today, Krispy Kreme can be found in over 560 locations in 18 countries around the world.

Krispy Kreme’s Strategy

Krispy Kreme Doughnuts (KKD) projects an image as “the Stradivarius of doughnuts,” creating a unique enriching experience that increasingly gains customer enthusiasm and loyalty. Krispy Kreme’s melt-in-your-mouth, hot, sugar-glazed doughnuts, the “doughnut theater,” and the “HOT DOUGHNUTS NOW” feature are clearly a few of the differentiating factors it attempts to make itself identified with. Fortunately, this appeals to a broad base of buyers; demographically, buyers come from all walks of life: all genders and ages, from skilled to blue-collar, high-income to low-income workers.

KKD’s strategy provides the company three sources of revenue:

(1) Sales at company owned stores;

(2) Royalties from franchised stores and franchise fees from new stores; and

(3) Sales of doughnut mixes customized doughnut-making equipment, and coffees to franchised stores.

KKD shifted in focus from a wholesale bakery to a specialty retail bakery to promote and increase sales at the company’s own retail outlets. The company emphasized the “HOT DOUGHNUTS NOW” feature as a response to customer feedback as well as a form of local advertising. The company was able to boost its store sales-volume by combining on-premise sales at its stores to capture customer base and then to secure off-premise sales at supermarket and convenience stores for packaged sales.

Futhermore, KKD gave reliance on franchising “associate” stores and opened a few new company-owned stores as a means of expanding nationally and internationally. However, franchise licenses...