Business-Level and Corporate-Level Strategies of Krispy Kreme Doughnuts - Case Study Example

BUSINESS LEVEL AND CORPORATE LEVEL STRATEGIES Krispy Kreme Doughnuts, Inc. is the publicly traded an American global doughnut company of choice. The company operates within the quick service restaurant (QSR), part of the restaurant industry (Ross, Weill & Robertson, 2006). The firm is situated in Winston-Salem, North Carolina and was founded in 1937. The company founder Vernon Rudolph bought a recipe, yeast-raised from a New Orleans chef, later rented a building and began selling to their customer local grocery stores. Since 1937, Krispy Kreme’s mission has been to provide highest-quality products and the best service to customers. Krispy Kreme is a leading proprietary wholesaler and retailer of high-quality doughnuts, matching packaged sweets and beverages and treats. The firm obtains its revenues from four business areas: Domestic Franchise, KK Supply Chain, International Franchise and Company Stores. Every company needs a good strategy or at least a workable plan in order to make more profits and grow. Strategy is an operational plan for achieving the set objectives and likewise following the mission statements. This paper starts by exploring Krispy Kreme Doughnuts, Inc. business level strategies and discusses the important strategy for long term success. One of the strategies that Krispy Kreme Doughnuts, Inc. has employed for years is affordability and provision of products Limited menu items. United States citizens are increasingly looking for affordable, fast and convenient food options. Fewer families are preparing meals at home and Krispy Kreme Doughnuts; Inc. has been capitalizing on this trend. The company satisfies each of these consumer desires, and this has been the basis of their strategy. Krispy Kreme has capitalized by having retail stores that are conveniently situated off of major thoroughfares to enable all customer access their menu. Many retail stores are characterized by drive through windows as an added opportuneness. Their products are also obtainable in grocery and accessible stores for customers in regions lacking a retail location. The strategy has assisted the company for years to achieve more profit wise. There is also advantage that the strategy brings, and that is an expansion in customer base. Not only does the company maintain the numbers of their loyal customers but get new guests daily due to this accessibility. Second strategy is that Krispy Kreme original Glazed doughnuts that are prepared for several hours every evening and morning, and at other times during the day at our firm stores. Krispy Kreme also run hot shops, which are satellite sites supplied with unglazed doughnuts from an adjusted factory store or the commissary. Hot shops require tunnel ovens to heat unglazed doughnuts throughout the day, which are then finished using similar glaze waterfall techniques used at firms shops. These are unique attributes identifiable only to Krispy Kreme and have helped them to compete for years. Another remarkable strategy that has helped Krispy Kreme Doughnuts, Inc. pull through is strong community relationships. The strategy has not only enable the company relates well with the community they serve but also to a way boosted company profits. Krispy Kreme was developed upon origination of word-of-mouth marketing technique. The company is committed to building links with their team members, guests and in their communities at large. Company’s shop operators assist local communities through sponsorship of charitable events and fundraising programs. Many of company devoted customers have recollections of vending Krispy Kreme products to raise funds for their clubs, schools and community organizations. They refer to these deeds as “relationship marketing;” and it is the core strategy of Krispy Kreme marketing. It is directly linking their marketing ability to their brand’s mission of “touching and enhancing livelihood through the joy that is Krispy Kreme.” Another key strategy that Krispy Kreme boosts for is One-of-a-kind taste. The taste experience of company’s doughnuts is the basis of their concept and the basic thread that joins generations of their loyal customers. Krispy Kreme doughnuts are prepared based on a secret recipe that has remained in the Company since 1937. The firm uses premium ingredients, which are mixed by their proprietary processing tools in accordance with the company’s standard operating guidelines, to develop this very special product and unique in its way (Ireland, Hoskisson & Hitt, 2012). According to various research conducted there, is a clear indication that one-of-a-kind taste makes guests’ cravings for the company’s products. Closely related to this strategy is the fact that Krispy Kreme has been continuously operational for over 76 years. The firm has been known for providing one-of-a-kind doughnuts, and this has given them heritage as a strategy. Their consumer research indicates this consistency and heritage are essential parts of the brand’s imagery with their guest’s customers. Representation of Krispy Kreme’s heritage comprises historical road signs, paper hats, and their “bowtie” logo. All these aspects and heritage forms part of their strategies and has helped the company achieve many economic gains. The main element of Krispy Kremes strategy is to give a quality doughnut and to plea to loyal customers in new ways. In my analysis, this is the most important business level strategy. The strategy is essential to the long-term success of the business. Krispy Kreme has taken great strides to indemnify customer satisfaction from the use of the company proprietary flour recipe to company automated doughnut making machines. They have chosen to focus on mainly markets with 100,000 families. The company is also exploring smaller-sized stores for external secondary markets (Hitt, Ireland & Hoskisson, 2007). With each fresh store opening, there exist lines waiting at the entrance all night to discover the Krispy Kreme quality. In Denver for instance, more than 3000 individuals stood in a line spreading for more than three city blocks on the initial day. The company has preparation regions in full outlook and a neon lighting that lights up whenever "Hot Donuts" are usually coming off the line. The firm makes customers feel impressed about indulging. The strategy that will not just increase their market base but at the same time provide more loyal customers hence more returns. This is a good choice strategy since it is tied directly to profitability. It is the main of any company to expand and increase their profit base, and this is achievable with full application of this strategy. Competition is crucial in any business industry. It can be described as the rivalry in which every company tries to get what the other company is seeking at the same time that is in terms of market share and maximizing sells. They do this by offering the best practicable combination of quality, prices, and service. This is the case of Krispy Kreme as they operate in an environment where the market information flows freely. The company operates within the specialty restaurant industry; however they have to compete with every food outlet that a consumer can access so as to satisfy their craving for coffee, treat-based items or snacks (Hitt, Ireland & Hoskisson, 2007). These food outlets may be other specialty eateries and fast food joints. In relative to their basic product which is donuts, Krispy Kreme also has to contend with generic unbranded donut providers that are vended via supermarkets and donut vans. Basing on these facts and my analysis it can be generalized that the company competitors may arise due to bargaining power of the suppliers, threat of substitute, high concentration of rivalry and threat of new entrants. One of the main competitors of Krispy Kreme is Dunkin Doughnut. In the company, managers ubiquitously continued to plod along, selling coffee and making the donuts. In the analysis of the company, it can be concluded that more than haft of revenues of Dunkin comes from the coffee business (Aaker, 2001). Individuals are beginning to embrace Dunkin more than Krispy Kreme because of delicious. This is the main reason Krispy is revamping its strategic competitive plans, to expense in their menu to retain their loyal customers and expand their customer’s base. Beside donut, the company has been expanded into coffee venture with 2002 acquisition of Digital Java Inc., a coffee company (Aaker, 2001). This attainment meets more strategic such as eagerly wish for providing a coffee experience for their customers, as well as company’s incorporation. The opinion for selling coffee is great my view and long term approach in expanding the success (Ross, Weill & Robertson, 2006). Should they fully implement these strategies, Krispy Kreme could be the key competitor of Dunkin Doughnut with high chances to win even more customer they are the first movers. The competition analysis helps the company understand their competitors and handle them effectively. Knowing what the company’s competitors are and are offering has helped them to make their products and deliver quality services and marketing stand out. Krispy Kreme has been able to use this analysis to set prices competitively and help then to respond to rival marketing campaigns with their strategies. Finally, the fact that the company has sound business strategies is an explanation of the tactics and technique they use to manage their business. It also emphasizes the importance of having efficient and effective strategies in place in the firm to attain more growth. It is also evident that the choice will not be different in slow-cycle and fast-cycle market. Competitive benefit is shielded from imitation for lengthy periods, and imitation is expensive due to building a unique and proprietary capacity that yields competitive benefits, creating. The organizational structure in Krispy Kreme is also effective in supporting strategic efforts (Aaker, 2001). References Aaker, D. A. (2001). Developing business strategies. New York, NY [u.a.: Wiley. Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2007). Strategic management: Competitiveness and globalization; [concepts and classes]. Mason, Ohio [u.a.: Thomson South-Western. Ireland, R. D., Hoskisson, R. E., & Hitt, M. A. (2012). Understanding business strategy: Concepts plus. Mason, OH: South-Western Cengage Learning. Ross, J. W., Weill, P., & Robertson, D. (2006). Enterprise architecture as strategy: Creating a foundation for business execution. Read More