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To enter in other countries is affected by a lot of factors. To make the decision of enter in new countries, we consider, first, it should be in countries that are closeness to other countries which already Krispy Kreme is, and has be successful. For example, Krispy Kreme today is present in countries that are named in the case, and has be successful, as Mexico, Britain, Australia and Japan, so is very logical to think that open new stores in closeness countries, with similar culture, would be successful to. Another reason could be that if they are closeness o neighbour, probably a lot of people from the new country have been there before and tried Krispy Kreme and already know the brand.
Of course, this can’t be the only factor to enter in these countries, it has to be joined by a complete analysis of the market and economic potential, risks, political and social stability, purchase power, and today’s one of the most important, the image of United States in these countries, which may affect the development of Krispy Kreme.
The countries will be name by region:
Centre America: Considering the closeness to Mexico and Puerto Rico (US), and similar conditions we have:
1. Costa Rica
Western Europe: Considering the closeness to Britain, and similar conditions we have:
We don’t name in this region countries as France, Spain, Germany or Italy because they have a huge culinary culture, where the doughnuts are not very popular and would be very difficult to battle their local products. However, Krispy Kreme could enter there in a future based in the big amounts of tourist that they have, and already know and have tried Krispy Kreme.
Eastern Europe: Today, there are not Krispy Kreme stores in Eastern Europe, but it could be an attractive market to enter because their rapid economic growth and big amounts of tourist, considering to that this region is available to ask for franchises in the web page.
4. Czech Republic
Asia: Considering the closeness to Japan, Hong Kong and Korea, and similar conditions we have:
Oceania: Considering the closeness to Australia, and similar conditions we have:
8. New Zealand
South America: Here is a problem, because South America is not an option to ask for a franchise, at least, it does not appear in the web page any contact o where to ask for information. Anyway, we consider that there are at least two countries with good conditions to enter, and that based on the success of other similar American brands as Starbucks and Dunkin Donuts.
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Analysing the Krispy Kreme web site, we see that the franchise section is very poor, it only shows the requirements and qualifications to open a store, which actually can’t be only one, they have to be 10 or more, that is quite restrictive, but it does not show too much information, is not very attractive, does not show opportunities, tips, nothing except the minimum requirements. It does not have financial assistance, the process to get started the store, etc.
Also, the image is not attractive, and is like there is no incentive to you to open a Krispy Kreme store.
So, generally speaking, the franchises marketing is very poor, unmotivated and ineffective.
The only good point is they have separated de franchises information by regions, but it does not work like that, because is the same information and the most part of them are unavailable.
Compared to Dunkin Donuts franchises web site, is very different, because this last one is much better. First, they give more information, about opportunities, the complete franchise process, financial assistance, what the brand involves, technology, marketing, and much more.
Also the image is much better, is very motivated, and it shows you how attractive could be open a new store.
In other words, is more complete, just better.
Today, Krispy Kreme exists in Japan even though the country is very different to the United States. The situation is different because, first, Japan is not a country with a donuts tradition, they have different kinds of cakes and stuff, but the donuts, before the enter of the American brands were not very popular. However, the American brands and products are very successful in Japan, and Krispy Kreme is not the exception, they have a very high affinity to American brands and products and seem to be very affectionate to being able to consume a part of that culture, they want to take part in living the American culture and the Spirit of Southern California.
Krispy Kreme needed to develop a demand and a necessity for their doughnuts, with the advantage of Japan already knowing the product of doughnuts sold by other brands. With media support and the information of Krispy Kreme entering Japan preceding the opening of the first store, Japanese customers got the first idea of the Krispy Kreme experience. To conclude, if Japan culture is very different to American culture, some of the elements mentioned before are the reason of the success of Krispy Kreme.
The case of London, a city particularly different to California, is not very affectionate towards the American culture and Krispy Kreme might face some difficulties when entering a market like London. The cities are different in culture, way of life, weather, activities, etc, so, for all these differences, the company should create a new and special marketing mix adapted to the needs and customs of the city, for example to offer a special and local line of tea with the very Americans donuts.
Considering that today’s aim of Krispy Kreme is the expansion end enter to new markets, they should be very careful analysing all the elements of the new host countries, like political stability, perception of Americans brands, market potential, economic development, and so on.
Another problem of the expansion plans, is to be careful about over saturate the markets, because it would affect the brand’s image, because if there is a Krispy Kreme in every corner, it would not be very special to eat a donut there.
One thing, which should be studied, are the requirement, to get the franchise, because may be they are being very restrictive. For example, the obligation to have enough capital to open 10 stores may affect a entrepreneur who wants to open less store in a very attractive market but with less potential consumer, where 5 stores would be enough.
In other perspective, a successful expansion plan, would be very good and influent on the image and the value of the company, and they are doing that, specially by their specialization on doughnuts, because today, Krispy Kreme is recognized as one of the strongest brands in the market of donuts, and with some differentiation of the others because their “experience” of eat a Krispy Kreme