Business Policy and Strategy Unit VI

Running Head: BUSINESS POLICY & STRATEGY IV 1

BUSINESS POLICY & STRATEGY IV 6

Business Policy & Strategy IV

Name

Institution

Date

Introduction

In this paper, we are going to discuss Krispy Kreme Doughnuts. Inc. and do a strategic analysis of its mission, strategy, and organization structure. As we try to determine what the company is about and how it comes into existence and highlight some of the products it offers as a company.

Company Description

Krispy Kreme Doughnuts. Inc. is a company whose main headquarter is based in Winston-Salem, North Carolina. The company is located in at least twenty-three countries; the company has made many of its factory shops to be places where consumers can watch how doughnuts are made and buy the hot doughnuts are fresh from those factory shops. The factory shops serve the convenience stores and the local grocery stores. The company's supply chain is used in providing the raw materials for both the stores owned by the company and the franchise in making doughnuts (Cohen et al., 2017). KK supply chain is where all the materials used by storeowners of Krispy Kreme are purchased from. In 2019, the company reported $887 million, which showed an increase in sales from the previous year, which was $805 million. 90% of the total revenue collected by the company is mostly got from the U.S.

Product/ Services of Krispy Kreme Doughnuts Inc

The company's product is doughnuts, hot beverages, soft drinks, iced beverages, and frozen beverages.

History

Krispy Kreme was founded by Vernom Rudolph, who had a yeast-raised recipe from a chef found in New Orleans; the company is traced back to 1933, where a doughnut shop was located in Paducah, Kentucky, was bought by Vernom Rudolph. After he had sold doughnuts in Tennessee, Kentucky, and West Virginia, he moved the store to Winston-Salem, and it's the store which is currently known as Krispy Kreme. The doughnuts of Krispy Kreme were at first sold to the grocery stores but later became very popular among the customers, where they could go and buy fresh hot doughnuts from the stores, which led to the launch of factory stores which sold directly to the public. The company was sold to Beatrice Foods in 1976 after growing very quickly for four decades, various franchisees of Krispy Kreme joined together to repurchase the company from Beatrice Food (Stockton, 2003). The company later expanded to New York in 1996, which was the first time the company had functioned outside the Southeast, and in 2001 it opened a branch in Canada, and that was its first branch outside the U.S. Also, in 2000 it went public by launching its IPO. As a public company, it achieved its ambition as a company from 2000 to 2016, and later it proved to be unprofitable; this made the company return to private ownership again under a private firm based in Luxembourg known as JAB Holding Company.

Company Strategy

The strategy used by the firm is a doughnut that is hot and fresh, where the original sign of hot doughnut is being lit in the production peak hours, which is mostly very early in the morning and very late in the evening. The doughnut theater where customers are entertained as they watch how the doughnuts are being made firsthand shows its commitment to freshness and quality. Since people bought, they saw how it was cooked. The company also has decided to change into smaller factory shops that will mostly focus on retail customers rather than the wholesale consumers, and this strategy is in line with the company marketing approach; where the company will own stores that are new in the Southeastern part of U.S, and the small new factory stores that are outside Southeast will be operated under the agreement of franchisee. Corporate social responsibility is another strategy used by the firm, where it helps the communities during fund-raisers.

The strategy used by the company is a way of the company saying it has a unique form of strategy where customers can see how their food is being made, it is a way of developing trust, and the company is fully committed to making sure the customers are fully satisfied. The positive aspect of the strategy is that people will be very interested in seeing how Doughnut Theater works, and it will attract people who have heard of such a thing but have never experienced it. There will also be a good mutual relationship between the community members and the company since the company takes part in CSR, and community members will give the company's product the priority when buying food. The government will also loosen its tight policies against the company since they help the community grow in general. To improve its strategy, the company must embrace technology's modern use and incorporate it into its business processes, right from marketing, production, sales, and distribution.

Mission

The company's mission is to provide the people with tasty, sweet, and peaceful memories, where the consumers are seen as the lifeblood of the company by being the center of the doughnuts produced. The aspect of quality will have no substitute for their consumers, and that the image of the company must be the best at any given point in time. Being second best is not an option for the company, especially when they show a level of commitment to their customers, and the team members working for the company must be coached to produce better results. The company's mission tries to describe how the company is 100% willing to make sure that their customers are fully satisfied and that they get the best kind of services from the most qualified team that can ever be. The company's dedication to its mission, where customers would get tasty and with peaceful memories, shows that the company would give the customers the experience they have never had before, hence making them loyal.

The positive aspect of the mission is training the employees to become better at what they do; this will help solve a lot of problems faced by employees during the workplace since they will be trained on how to handle different situations. Also, making sure quality products are the only kind of products made available to customer’s shows how concerned the company is about the products they sell to their customers. This, together with the coaching of employees, will ensure the retention of employees and customers. The company can improve its mission by ensuring the value proposition they offer to customers is unique from other companies. Instead of incorporating a penetration strategy, it will incorporate a pull strategy to attract customers.

Organization Structure

The company's organization structure involves three types of segment franchise operations, Krispy Kreme Manufacturing and Development (KKM&D) and company store operations. The franchise operations include things like the area developer program and associate programs. Company store operations include the company stores and the joint venture consolidated stores that sell and make all complementary products and doughnuts through an off-premise and on-premise channel of sales. KKM & D usually involves the processing and buying of ingredients used to produce the doughnut mixes (Symbol & Year, 2011).

The strategy of the company suggests that it’s a functional organization structure; the positive aspect of this structure is that the company is easily scalable. Employees are allowed to focus on their roles. This structure can be improved by facilitating departmental interactions to work in unity with each department being aware of what other department is doing and allowing them to share the scarce resources hence cost-effective.

Long-term and Short-term goals

The company's short-term goal is developing ethical grounds so that they can remain in line with their mission, and the long-term goal is being flexible, meaning that the technique used to achieve the goals are stringent and reflect the values of the vision of the company.

References

Cohen, B. D., Bennett, J., & Bubb, J. (2017). Krispy kreme: The franchisor that went stale. Kellogg School of Management Cases.

David, F. R., & David, F. R. (2013). Strategic management: Concepts and cases: A competitive advantage approach. Pearson.

Symbol, K. K. D., & Year, F. (2011). KRISPY KREME DOUGHNUTS INC.

Stockton, L. (2003). KRISPY KREME DOUGHNUTS: An American Food Retailing Franchise.