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Krispy Kreme Doughnuts have captured a unique portion of the specialty bakery industry. In 1933, Krispy Kreme started out as small independent bakery. The company struggled in the beginning, but the owners relocated the business taking advantage strong economic conditions. In 2003, Krispy Kreme’s mission is simply to be a special retailer for quality doughnuts while maintaining a commitment to quality and consistency. The company’s goal is to increase market share. Krispy Kreme’s plans to accomplish their goals by geographically expanding into new retail markets. The company’s centralized managerial approach provides control to insure uniformity throughout each geographic area. Strengths Krispy Kreme relies on a high quality product. The company’s relies on the strength of a high quality product allowing Krispy Kreme to become leader in the specialty bakery industry. The quality is achieved through the company’s advancements in production technology found in each location. The Krispy Kreme’s success has allowed the company to expand into new geographic location. New locations utilize Krispy Kreme’s technology to improve production. The new doughnut machines capitalize on the company’s devotion to technology designed specifically for producing Krispy Kreme Doughnuts. Weakness The company’s resent expansion may cause the demand for the special doughnut mixture to excide supply. The mixture is the only product that is compatible to the equipment used in each store. Currently, the company has three locations manufacturing dough mixture. Future growth plans call for an increased demand for the product. Krispy Kreme locations favor densely populated areas. The areas normally have multiple retail stores and one production facility. Major stores are located near high traffic areas. Current expansion guidelines dictate stores can only be placed in areas with over 100,000-population base. Opportunity Market opportunities favor additional expansion for specialty-baked goods. Current trends indicate consumers are seeking healthier foods. Industry leaders are shifting product lines to capitalize on these new demands. The companies are diversifying their product lines by adding healthier menu items. Current economic conditions favor company expansion. Interest rates are at all time lows making funds affordable. Economic conditions have increased consumer-buying power. The effect is reflected by a 22 percent increase in bakery sales in 2003. Opportunities exist in global markets. World conditions favor international trade. Trade agreements have opened sources for expansion. The success of other national brand name companies entering world markets has excided expectations. Consumers in foreign markets have traditionally sought American made products. Threats Consumers seeking more health conscious products pose a threat to the specialty bakery industry. Consumer tastes are driven by popular beliefs. Consumer diets are shifting to healthier products indicating a change in specialty items. Local demographics can affect markets sales. The increase in different nationalities in the United States may influence consumer demands. The ethnic groups may seek products from their home country. A rise of foreign-based products could alter present consumer markets. The bakery industry relies on grain-based products to produce baked goods. Natural disasters or a shift in weather conditions can adversely affect agriculture. Price fluctuations from suppliers can shift profit margins resulting in increased consumer prices. Industry Analysis Bakery industry sales have steadily increased over the last ten years. The bakery industry is comprised of many segments. Sales excided 7 Billion in 2000. Bakeries have provided bread, cakes, pies, cookies, and a variety of specialty items. The bakery industry is unlike most commercial industries. Due to perish ability, the bakeries are geographically located to insure product freshness.