Krispy Kreme

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Written Assignment Krispy Kreme Doughnuts, Inc I. Brief History Vernon Rudolph is the brains behind the Krispy Kreme name. He bought a doughnut shop in 1933 and all the assets came along with the purchase, including a secret recipe and name, Krispy Kreme. Rudolph moved to Winston-Salem, North Carolina, where he opened his first Krispy Kreme shop. The business prospered and in the 1950¡¦s over ten other locations were opened. The business was able to produce 500 dozen doughnuts an hour. ¡§Revenues grew from less than a million in 1954 to $58 millions in 1974.¡¨(C-280) The company was bought out in 1976 by Beatrice Foods. This hurt the name and image of Krispy Kreme. Revenues began to fall and customers were not satisfied with the…show more content…
The market is concentrated. This is due to Dunkin¡¦ Donuts controlling most of the market. Krispy Kreme controls 24.6% of the market share in the doughnut industry. Porter¡¦s 5 Forces The Rivalry among competing sellers in the industry is medium to high. KK highest competitor is Dunkin¡¦ Donuts who controls most of the doughnut making market. KK must do everything in their power to remain in the position they are in or to move up. New competitors can enter the market at any time. Mom and Pop shops open all the time that sell doughnuts and breakfast products. The barriers to entry in the doughnut market are small. Doughnuts are simple to make and anyone could make them if they wanted to. However, mass production of doughnuts takes a little more effort and money. KK is able to compete in a market that has many large competitors as well as Mom and Pop shops. When analyzing the affect of substitute products you must take into effect the lifestyle of Americans. We live in a world that is on-the-go and fast pasted. People eat in fast food constantly. The fast food industry is constantly being threatened from substitute products. There is little bargaining power of sellers in the doughnut industry. If one company is selling their product at a higher price than another one there is no way to know if the customers will buy the cheaper product. There are also substitute products that can be eaten instead of doughnuts. The ingredients in doughnuts are simple.

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