Strategic Management at

Krispy Kreme Doughnuts

Inc.

COMPANY OVERVIEW

Krispy Kreme is an international retailer of premium-quality sweet treats,

including its signature hot Original Glazed doughnut. Headquartered in
Winston-Salem, NC, the company has offered the highest-quality
doughnuts and great-tasting coffee since it was founded in 1937 by
Vernon Rudolph. Today, Krispy Kreme and its one-of-a-kind Hot Light can
be found in approximately 649 locations around the world. Currently,
Krispy Kreme can be found in 20 countries, including the United States,
Australia, Bahrain, Canada, China, Dominican Republic, Indonesia, Japan,
Kuwait, Lebanon, Malaysia, Mexico, the Philippines, Puerto Rico, the
Republic of Korea, Qatar, the Kingdom of Saudi Arabia, Thailand, Turkey,
the United Arab Emirates, and the United Kingdom.
Market research indicates that Krispy Kremes breadth of appeal extends
across all major demographic groups, including age and income. In
addition to their taste, quality and simplicity, Krispy Kreme doughnuts are
an affordable, indulgent sweet treat. Many of its
customers are
accustomed to purchasing our doughnuts by the dozen for their office,
clubs and family.
The Krispy Kreme brand has several unique elements that have helped us
create a special bond with our customers. Their doughnuts, which are
made from a secret recipe that has been in the company since 1937, have
a one-of-a kind taste that generations of loyal customers have grown to
love. The Hot Doughnuts Now sign, when illuminated, is a signal to the
customers that the signature product, hot Original Glazed doughnuts, is
being made. The Hot Doughnuts Now sign is a strong impulse purchase
generator and an integral contributor to the brands mystique. Krispy
Kreme is also committed to strong local community relationships. Their
store operators support their local communities through the popular
fundraising programs and the sponsorship of local events.
Their vertically integrated, automated system is designed to create high
quality, consistent doughnuts in an efficient manner. Quality control starts
with their manufacturing plant, which produces proprietary Krispy Kreme
mixestheir state-of-the-art laboratory runs quality tests on all key
ingredients and each batch of mix.
The approximate number of employees is Approx. 3,900.

MISSION, VISION AND VALUES

Mission

To touch and enhance lives through the joy that is Krispy Kreme.

Vision

To be the worldwide leader in sharing delicious tastes and creating joyful

memories.

Values

They believe...

Consumers are our lifeblood, the center of the doughnut

There is no substitute for quality in our service to consumers

Impeccable presentation is critical wherever Krispy Kreme is sold

We must produce a collaborative team effort that is unexcelled

We must cast the best possible image in all that we do

We must never settle for "second best;" we deliver on our

commitments

We must coach our team to ever-better results

INDUSTRY DEFINITION

Krispy kreme as a whole is the part of restaurant industry but it can

be further categorized into Quick Service restaurant or fast food industry.
The industry is basically product based but the concept of service
has been widely integrated into it. By sector, it can be categorized into
tertiary industry and by size it is a global industry since the trend of fastfood has been accepted and implied all around the world. Based on target
market, this is an international industry and it is fragmented.

INDUSTRY ANALYSIS

In the United States, the QSR segment is the largest segment of the
restaurant industry and has demonstrated steady growth over a long
period of time. According to The NPD Group, which tracks consumer usage
of the foodservice industry, QSR sales have grown at an annual rate of 3%
over the past 10 years. The National Restaurant Association projected QSR
sales to rise 3% in calendar 2010 from the $160 billion posted in calendar
2009.Information Resources, Inc. data indicate that, during calendar 2009,
doughnut sales rose approximately 5% year-over-year in grocery stores
and rose approximately 3% in convenience stores in 2009.

In addition to retail doughnut outlets, the domestic doughnut market

is comprised of several other sales channels, including grocery store
packaged products, in-store bakeries within grocery stores, convenience
stores, foodservice and institutional accounts, and vending. Customer
service, including frequency of deliveries and maintenance of fully stocked
shelves, is an important factor in successfully competing for convenience
store and grocery/mass merchant business. There is an industry trend

moving towards expanded fresh product offerings at convenience stores

during morning and evening drive times, and products are either sourced
from a central commissary or brought in by local bakeries. In the
packaged doughnut market, Krispy Kreme competes for sales with many
sweet treats, including those made by well-known producers, such as
Dolly Madison, Entenmanns and Hostess, as well as regional brands.