Krispy Kreme Doughnuts, Inc.
Professor XXX XXXX
Month xx, xxxx
History Krispy Kreme was founded by Vernon Rudolph after he purchased the famous secret recipe of yeast-raised doughnuts in 1937 from a French chef in New Orleans. Rudolph began to sell these doughnuts wholesale to supermarkets. The demand for his doughnuts grew quickly, and by cutting a hole in the wall of the factory to sell directly to customers the concept of Krispy Kreme retail stores was born. The retail concept for Krispy Kreme doughnuts allowed Rudolph to grow his factory stores to 29 shops in 12 states by the late 1950’s. When Rudolph died in 973 Beatrice Foods bought his company and expanded it to more than 100 locations and expanded the menu to …show more content…
“Testimony by a former sales manager at a Krispy Kreme outlet in Ohio, said a regional manager ordered that retail store customers be sent double orders on the last Friday and Saturday of the 2004 fiscal year, explaining "that Krispy Kreme wanted to boost the sales for the fiscal year in order to meet Wall Street projections." The witness said the manager explained that the doughnuts would be returned for credit the following week - once fiscal 2005 was under way” (Chin, 2005). It seems pretty clear that Krispy Kreme was using questionable methods to inflate profits.
Investors also later found out that Scott Livengood (CEO), the former COO John W. Tate, and the former CFO Randy Casstevens, “unloaded more than 475,000 shares of Krispy Kreme stock for proceeds of $19.8 Million”, (Chin, 2005) while they were fully aware sales were declining since January of 2003. During this investigation, Scott Livengood, Krispy Kreme’s CEO announced his retirement.
It would seem to me that there may be some deeper issues with Krispy Kreme and if I were a shareholder I would want out, or to be certain that Krispy Kreme’s accounting mess was cleaned up.
The chart below shows Krispy Kreme’s performance during the years
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Krispy Kreme executives no longer rush to implement new plans before the time is right. They carefully study each geographical location to make sure its market will support a full-scale doughnut operation. Also, management spends time checking out sites for individual stores. Potential franchisee and employees are required to maintain certain standards and are thoroughly screened.
From the “Management Discussion & Analysis” section, it is evident that Krispy Kreme is facing many risks that are being faced by almost all companies in the market. Those risks include:
Dunkin ' Donuts is an American worldwide donut organization and café chain situated in Canton, Massachusetts in Greater Boston. It was established in 1950 by William Rosenberg in Quincy, Massachusetts. Since its establishing, the organization has developed to turn into one of the biggest espressos and prepared merchandise chains on the planet, with 11,000 eateries in 33 unique nations. The affix has developed to incorporate more than 1,000 things on its menu, including doughnuts, bagels, other heated merchandise, and a wide assortment of hot and frosted refreshments. The organization principally contends with Starbucks, as over a large portion of the organization 's business is in espresso deals, and additionally with Krispy
Customers do not pose a significant threat to Krispy Kreme because they are numerous and widely dispersed. Krispy Kreme franchises must buy from the franchising corporation, which guarantees some level of sales. As purchasers, franchisees still have only limited bargaining power because they are locked in through a large investment. Another significant factor is the value of the product to the customer. While food is essential for living, the products offered by Krispy Kreme are dispensable, and for leisure consumption only. However, increased profitability in the industry suggests that people are becoming more dependent on fast food and specialty restaurants than they have ever been.
As the millennium began, the future for Krispy Kreme Doughnuts, Inc., smelled sweet. Not only could the company boast iconic status and a nearly cultlike following, it had quickly become a darling of Wall Street. Less than a year after its initial public offering, in April 2000, Krispy Kreme shares were selling for 62 times earnings and, by 2003, Fortune magazine had dubbed the company "the hottest brand in America." With ambitious plans to open 500 doughnut shops over the first half of the decade, the company's distinctive green-and-red vintage logo and unmistakable "Hot Doughnuts Now" neon sign had become ubiquitous.
Krispy Kreme Doughnuts (KKD), a once high flying growth stock has been hampered as of late with shareholder lawsuits. When sales growth and earnings began to drop significantly in 2003, the company blamed its problems on the popularity of low-carbohydrate diets like Atkins and South Beach at the time. But the SEC began probing Krispy Kreme's accounting for franchise buybacks and is now facing shareholder lawsuits for inflating profits. Senior management officials allegedly knew of the problems, but continued to pad sales figures by doubling doughnut shipments to wholesale customers at the end of fiscal quarters, according to
The strategic problem considered is to analyse Krispy Kreme’s current operations and suggest recommendations for how this may be tailored for the UK market for long-term profitability given cultural and retail differences.
July 13, 1937 marked the day that Vernon Rudolph opened his doors in Winston Salem, North Carolina and started selling Krispy Kreme doughnuts. Initially his business plan
Krispy Kreme Doughnuts, Inc. (KKD) is an exclusive brand that offers doughnuts, beverages, collectibles, and franchise opportunities. It started as a small bakery in Winston Salem, North Carolina on July 13, 1937; and has evolved into a publicly traded firm boasting 395 retail stores and over three million dollars in sales (second quarter 2010). This was not always the case however, by the end of 2004, the economy began to slow. This caused businesses in competition with Krispy Kreme to flood their market hindering plans that Krispy Kreme had of expansion. Eventually they would have to scale back due to declining sales. Consumer interest in low carbohydrate diets such as the “Atkins” and “South Beach” diet plans are somewhat to blamed for
Krispy Kreme is a worldwide selling doughnut chain store which was established in 1937 in North Carolina, U.S.A. The main store of Krispy Kreme Doughnuts, Inc is located in Winston-Salem. Krispy kreme has many varieties of doughnuts, but its most famous item is the glazed doughnut. Doughnuts of Krispy Kreme are available in many places such as Malls, Airports, Parks, grocery stores, gas stations e.t.c. worldwide. Krispy Kreme had well balanced growth during its initial stages but its profit margin has been declining recently while having a strong competition against Starbucks, Tim Horton’s, Dunkin Donuts, and now also McDonalds.
Problem is Thai people interest with Krispy Kreme lower than the beginning period, so male Krispy Kreme no more long queues although Krispy Kreme launch more favors, but not attraction customer like beginning period. Now Krispy Kreme has not yet opens a new branch although I think Krispy Kreme must to open new branch.
Can you picture “riding down the street then you look over to see the big red” “hot and ready “sign on for those delicious little glazed donuts, and you just have to stop in for a dozen but when you get in there you end up buying two dozen. Trust me, I always do. Krispy Kreme is the best donuts in the world to me and they just melt in your mouth. Before you know it you will have ate a whole entire box by yourself. I bet you’re thinking how can I invest in something I don’t know anything about this company. Well I can help you with that with a brief summary of history.