Krispy Kreme

Focus of the Proposal
Krispy Kreme, a leading, well-established brand of high quality doughnuts, is still in a stage of astonishing growth potential. According to Dain Rauscher Wessels equity analyst David Geraty, “Krispy Kreme has established itself as the quality leader in the doughnut industry and is positioned to become the dominant industry player, with 145 retail locations in 27 states, Krispy Kreme is expected to capitalize on the brand conscious consumer’s demand for a consistent, high quality specialty food product” (Minneapolis 2000). Krispy Kreme has quickly risen to the top of the doughnut business in a short amount of time. The company’s goal since its infancy has been to satisfy customers by providing a unique experience when visiting a Krispy Kreme outlet. This bold strategy has differentiated them from their competition and created a competitive advantage. Customers are allowed to see how the doughnuts are made, and then served the newly baked treats hot and fresh. The bright neon light that shines from every Krispy Kreme location reads “Hot Doughnuts Now,” is one of Krispy Kreme’s key marketing strategies. When this sign is lit up, customers know that they will get fresh doughnuts that have just been made.
Since going public in 2000, Krispy Kreme Doughnuts has posted strong growth in same-store sales each quarter, with a consistency that would make most competitors envious. According to the Krispy Kreme’s most recent quarter, which ended August 3, 2003, it posted an 11.3 percents rise in system wide same-store sales, including 15.6 percents growth at company operated units (Peters, 2003). From the financial report of second quarter in 2003, it could foretell there would be more earnings growth in the future as long as Krispy Kreme finds more new markets in which to launch doughnut shops. Its average weekly sales are in large determined by newly opened stores. This also demonstrates that the doughnuts specialist’s soaring results and rise to the top echelon of industry performers can be attributed to successful expansion.
Despite the fact that Krispy Kreme’s same-store sales are increasing every quarter, the company is not in control of the specialty foods industry. Starbucks Coffee, Krispy Kreme’s leading competitor, has been experiencing astonishing sales that surpass even Krisp...

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...the product until they encounter one. Due to this, it is rare that one who has not seen a Krispy Kreme advertisement, or heard from a friend about the quality of a product will seek out an opening store. Advertising is important for most businesses in the specialty foods industry because of the high competition. Starbucks is at a level where they have become a household name. It is not uncommon to see Starbucks logo’s in movies or television shows, because it is a symbol of quality. Recognition as well-built as this does not happen through natural marketing evolution. It takes great effort to become a company that is on the tip of consumers tongue when discussing certain products. The goal of Krispy Kreme is to be the world wide doughnut name. Unfortunately, without the power of a cross country campaign, this status will be difficult to achieve. Successful advertising can be achieved by using technological mediums such as the internet to generate consumer interest in places it does not yet exist.
In order for Krispy Kreme to become the leader of its industry, it must identify the threats that it faces and use IT to transform these into opportunities.