krispy kreme case study
Krispy Kreme Case Study Since 1937 Krispy Kreme has grown into a leading branded specialty retailer, producing more than 5 million doughnuts a day and over 1. ... In addition to Kripsy Kreme stores, their doughnuts are sold in supermarkets, convenience stores and other retail outlets throughout the country. ... Krispy Kreme has slowly dominated the doughnut in the United States. ... This case study will examine key issues that Krispy Kreme is facing in today’s market. The tools in this case study start with Krispy Kreme’s strategy. Financial reports will be used to measure Kripsy Kreme’s success and conclude with various analyses that will reveal any current or future problems that the company could have. Strategy One of the chief elements of Krispy Kreme’s strategy was to focus on differentiation by repositioning the company toward being a specialty retailer rather than a wholesaler, which would maximize the company’s brand equity with its consumers and enhance the “hot doughnut experience”. ... Franchising allowed Krispy Kreme to minimize their own capital requirements, provided an attractive royalty stream, and offered opportunities for successful franchisees who were familiar with their market regions. Krispy Kreme’s plan was to license territories to select franchisees with proven experience in multi-unit food operations. Another chief elements of Krispy Kreme’s strategy was to be the industry leader as the low-cost provider by develop a vertically integrated supply chain strategy that would provide for the manufacturing of the doughnut mixes as well as the doughnut making equipment to all of its company-owned and franchised stores. ... By manufacturing their own mixes and equipment, Krispy Kreme is able to eliminate the outsourcing expenses of their competitors. ... The integrated supply chain strategy proved to generate substantial revenues and earnings for the Krispy Kreme brand. ... It is by assessing Krispy Kreme’s financial performance through the analysis of their financial statements and financial ratios of the firm that will tell if Krispy Kreme is financially strong. ... Krispy Kreme’s quick ratio is 1. ... This ratio shows that Kripsy Kreme has the ability to pay off their debt far better than others in the same industry do. This gives Krispy Kreme a competitive advantage. Krispy Kreme is able to pay off debt with no problem. ... Krispy Kreme’s inventory turnover ratio is 20. ... Krispy Kreme is a very liquid company and so they are a little behind the industry as for as how fast they turnover their inventory. ... Krispy Kreme’s ROA is 12. ... For every dollar it’s total assets that Krispy Kreme produces $12. ... Krispy Kreme is effectively utilizing using its assets to produce more income at a higher profit margin. If you only take into consideration Krispy Kreme’s financial statements, you would question why is their earnings per share as low as it is. However, once you see that Krispy Kreme has an arbitration listed on its statement that effects earnings per share and that this arbitration (lawsuit) ultimately affects only one year of financial information than the overall financial statement shows a steadly growing company.