CLC: STRATEGIC MANAGEMENT CASE ANALYSIS PART 1: ACTION
PLAN AND CALENDAR OF EVENTS
1
Krispy Kreme Case Analysis
NAMES
SCHOOL CLASS
DATE
CLC: STRATEGIC MANAGEMENT CASE ANALYSIS PART 1: ACTION PLAN AND
CALENDAR OF EVENTS
2
Key Issues Introduction
Krispy Kreme Doughnuts Inc. is a company that deals with doughnuts, coffee, and other
snacks items. The company has its headquarters in North Carolina and has established branches
in more than twenty-three countries. The company operates in factory shops where customers
have the chance to purchase doughnuts as they are cooked. The company has supply chain stores
that provide them with raw materials for their products. This paper analyzes some of the
challenges that the company faces and the reason for the challenges. Similarly, the paper tries to
develop some potential strategies and possible solutions and steps for the implementation of the
developed strategies.
The company is believed to be one of the biggest competitors in the restaurant industry
popularly known for its donuts. Due to the emergence of competitors in the market towards the
end of 2004 and the beginning of 2005 the company’s development began to decrease which
affected their expansion plan. Their significant competitors include Dunkin Donuts, Starbucks
and Tim Hortons which is based in Canada. Through SWOT analysis it is clear that the company
faces a lot of threats in the market. Competitors always come up with new and substitute
products that attract customers. Some of these substitutes are popular among the customers and
are threats to Krispy Kreme’s coffee (Cohen et al., 2017).
The company’s vision statement according to what has been posted on the websites is to
be the leader in doughnuts and other complementary products in the international market as they
create magic moment globally. The company’s mission statement states, “To touch and enhance
lives through the joy that is Krispy Kreme.” The company’s primary strategy is concentrated on
CLC: STRATEGIC MANAGEMENT CASE ANALYSIS PART 1: ACTION PLAN AND
CALENDAR OF EVENTS
3
revenue the stores that are owned by the company and its other businesses including royalties
and fees.
From the beginning, the company thought that the best way to stay on top in the market
among their competitors was franchising which involved a lot of risks for the company at the
same time putting a lot of responsibilities on the franchise holders. Following the cash flow on
equity investment in the year 2001 of 91% attracting franchise was the easiest thing to do. Two
years later the company came up with a new business plan of adding new stores that would be
adequate to boost the sales to be able to achieve the required 20% revenue growth plus the 25%
annual growth in their earnings per share.
In a market where there is a lot of competition the best tool that organizations can use to
stay on top of their competitors is a clear marketing strategy. This appeared to be one of the areas
that the company needed to improve on. Krispy Kreme’s marketing plan seems to be the simplest
in that there are fewer efforts that have been put in marketing their products (Cohen, et al.,
2017). Despite everything going on with the company they still have objectives that need to be
achieved within a given period.
Their first objective is reducing the amount of needed investment for producing a specific
level of sales as they reduce the cost of operation. To achieve this objective, the company plans
to establish and make use of satellite stores and replace the big stores and other expensive stores.
The second objective of the company is to centralize the production of doughnuts to minimize
the fixed costs which would help in realizing greater production efficiencies. The third objective
of the company is to reduce the number of locations that make doughnuts for the company to
achieve greater consistency of the quality of their products. The fourth objective is giving the
CLC: STRATEGIC MANAGEMENT CASE ANALYSIS PART 1: ACTION PLAN AND
CALENDAR OF EVENTS
4
employees working at their stores the chance to meet the best customer satisfaction and in shop
consumer experience.
To achieve the objectives of the company, there must be contingencies that have been put
in place to make sure that these goals are met. To reduce the operation costs, the company has
embarked on closing all the stores that are not performing according to the set standards. To
reach the international market and to cover a wider area, there is a plan to open new companyowned satellite stores.
Some key issues that have been identified are there is no published mission of the
business. Hot and fresh doughnut is their aim, but items are being sold at convenience stores so
they are not hot or fresh as they advertise. There is a need to capitalize more on the coffee
products to help drive revenue. Rent space in the large grocery stores as opposed to owning
buildings to reduce cost. Healthier choices are available elsewhere and the lack of
diversification compared to competitors.
Team Focus
Our team focus for the Krispy Kreme case analysis is to propose a vision and mission
statement, evaluate the organizations existing objectives and strategies, and provide and defend a
three-year strategic plan to best allocate the company resources. Our team focus for the Krispy
Kreme case analysis is to propose a vision and mission statement, identifying the external
opportunities and threats, determine internal strengths and weaknesses, and evaluate the existing
objectives along with current and alternative strategies.
CLC: STRATEGIC MANAGEMENT CASE ANALYSIS PART 1: ACTION PLAN AND
CALENDAR OF EVENTS
5
References
Cohen, B. D., Bennett, J., & Bubb, J. (2017). Krispy Kreme: The Franchisor That Went Stale. Kellogg School of
Management Cases, 1-15.
Kripsy Kreme Doughnuts Strategic Analysis
Name
Instructor
Institutional Affiliation
Date
Krispy Kreme Doughnuts, Inc
The company’s current mission and vision
Mission and vision statement of the company both relate to the organizational purpose
and are usually communicated in written form. They answer the question about who we are,
what we do, what do we value, and where the company is going. A well-developed mission and
vision statement of the company provides a strategic direction for the company enabling the
company to achieve its goals and objectives. Krispy Kreme Doughnuts has a well-articulated
mission and vision statement that communicates the company’s overall goals, objectives, and
purpose of the market (David, 2011). The mission and vision statements of provides a Krispy
Kreme Doughnuts summation of the values that drive growth and success of the company. The
following are the current mission, vision, objectives, and strategies of Krispy Kreme Doughnuts.
Mission Statement
Krispy Kreme Doughnuts mission statement expounds on the company’s goal of the
vision statement. The company’s mission statement states that “Our mission is to touch and
enhance lives through the joy that is Krispy Kreme” (Quesito, 2014). Although the company
mission statement outlines the values of the company to the customer, it is too broad and
undefined. The company was established with a goal of providing the customer with what they
want, but the mission statement does not state how they intend to achieve the mission.
Vision Statement
A company’s mission statement shows what the company continues to strive for in the
future. In other words, every decision made in the present determines the success of what the
company envisions to achieve. Krispy Kreme vision statement states that “Our vision is to be the
worldwide leader in sharing delicious tastes and creating joyful memories” (Quesito, 2014).
From the vision of the company, it is evident that the company’s vision statement is clear on
what the company intends to achieve through future endeavors. The company’s vision to be a
worldwide leader in sharing delicious tastes and creating joyful memories provides the basis for
the expansion of Krispy Kreme into many foreign countries worldwide (David, 2011). The
vision of sharing delicious tastes shoes that the company envisions continuing providing high
quality and reliable doughnuts to its esteemed customers worldwide.
Objectives and strategies of Krispy Kreme
The company has developed some strategic goals that are designed to foster the growth
and development of Krispy Kreme Doughnuts and improves its profitability in the bottom line.
The primary strategic goals which the company is striving to devote its time and resources
include the following.
•
Developing and testing domestic small shop formats to drive sales growth and
profitability of the company
•
Enhancing their focus on small shop operations
•
Improving their off-premise business and channels.
•
Developing, testing and deploying new products to enhance their product portfolio. In
addition to providing and enhancing the consumer experience, Krispy Kreme Doughnuts
aims at expanding their brand menu offering to give customers a reason to visit their
premises
•
The company aims at building on its success internationally by supporting the growth of
its international franchises and expanding more to other lucrative markets within a global
scope.
New Mission and Vision Statements of the company
Although Krispy Kreme Doughnuts has developed effective and competitive mission and
vision statement, the company’s mission, and vision statement can be revised to become more
evident and focused on meeting the objectives. The mission statement of the company is too
broad and undefined and can be narrowed down as follows:
Mission statement
The company mission statement can be narrowed down as to state that, “our mission is to
reach every humanity and culture throughout the world through developing delicious products
that enhance and creates a light moment to every aspect of their lives.”
Vision statement
The vision statement of Krispy Kreme is clear on what the company aims to achieve
through their future activities. This vision statement can be improved to provide more insights
into what the company values and aspires to achieve. The revised vision statement of the
company could read, “Our mission is to be the number one provider of delicious and testy
products that create delightful memories on the face of all our customers globally.”
Krispy Kreme external opportunities and threats
In the external environment, there are external factors that present both opportunities and
threats to the company. The external opportunities are the favorable factors that a company can
use its strategic strengths and take advantage of (Ventimialia, 2009). The external threats are the
unfavorable factors that threaten the success of the company in the external environment. Krispy
Kreme just like any other company faces several external threats that may hinder its progress in
the market. On the same note, the external environment presents some opportunities the
company can take advantage of.
External Opportunities
The external opportunities provide Krispy Kreme Doughnuts with a means to improve its
performance and competitiveness in the market environment. The following are some of the
opportunities in the foreign market that can provide Krispy Kreme with a means to improve its
performance (Ventimialia, 2009).
•
Market expansion- expansion of its franchise business into other foreign markets
globally.
•
Expansion of its menu to increase its product offering portfolio
•
Create its market presence and stimulate demand through internet media adverting
•
Joining forces with other related business to create a healthy competitive force in the
market
External Threats
External threats are the forces outside the organization that can adversely affect the
performance of the company in the bottom line. Krispy Kreme faces several threats within its
external environment including the following:
Intense competition due to common basic products that produced by industry giants such as
Starbucks and Dunkin Doughnuts.
•
Increased health consciousness-today many people are becoming conscious about their
health especially in regards to products that may increase obesity and other health
complications.
•
High gas prices also affect the company production activities on a global scale
•
Government regulations and poor jobs economy.
References
David, F. R. (2011). Strategic management: Concepts and cases. Peaeson/Prentice Hall.
Guayaba y Quesito. (2014). Krispykreme.do. Retrieved from
http://www.krispykreme.do/productos/doughnuts/ guayaba-y-quesito
Ventimialia, J. (Ed.). (2009). Krispy Kreme Doughnuts Inc. Ward's Business Directory of U.S.
Private and Public Companies 52nd ed., 12(232). Retrieved from
http://find.galegroup.com/gdl/start.do?prodId=GDL
Key External Factors
Opportunities
1. Convenience because of busy/hectic lifestyles
2. People crave/love sweets
3. Expansion into South Korea & Russia; generated investor interest
4. Dunkin' Donuts does not have the "hot" doughnuts
5. Tim Horton's does not have the globalization (primarily in Canada)
Threats
6. Dunkin' Donuts accounts for significant sales with coffee drinks
7. Transformation of a health-conscious society
8. Starbucks has significantly more locations worldwide (18,000 stores)
9. Coffee prices are subject to wild price fluctuations
10. Thousands of global 'mom & pop' shops
Total
Weight Rating
0.14
0.08
0.10
0.11
0.09
3
2
1
4
2
0.14
0.10
0.10
0.07
0.07
1.00
1
2
1
2
2
Weighted Score
0.42
0.16
0.1
0.44
0.18
0.14
0.2
0.1
0.14
0.14
2.02
Tim Horton's
Critical Success Factors
Advertising
Product Quality
Price Competitiveness
Management
Financial Position
Customer Loyalty
Global Expansion
Market Share
Total
Weight
0.13
0.16
0.10
0.11
0.12
0.12
0.14
0.12
1.00
Rating
2
2
3
2
3
3
1
1
Score
0.26
0.32
0.30
0.22
0.36
0.36
0.14
0.12
2.08
Dunkin' Donuts
Rating
4
3
3
2
3
4
2
3
Score
0.52
0.48
0.30
0.22
0.36
0.48
0.28
0.36
3.00
Starbucks
Rating
4
3
2
3
2
4
3
3
Score
0.52
0.48
0.20
0.33
0.24
0.48
0.42
0.36
3.03
Strengths:
Affordable, high quality doughnuts
“Hot Doughnuts Now” sign draws people from the outside
Consistent expansion and growth in other countries
Product sold at supermarkets, convenience stores, and retail outlets
Weaknesses:
Product line is limited and slow to expand
Advertising could be more aggressive
Lack of true vision statement
Revenues down in comparison to rival firms
Internal Factor Evaluation
Strengths
Affordable, high quality doughnuts
“Hot Doughnuts Now” sign draws people from the outside
Consistent expansion and growth in other countries
Product sold at supermarkets, convenience stores, and retail outlets
Weaknesses
Product line is limited and slow to expand
Advertising could be more aggressive
Lack of true vision statement
Revenues down in comparison to rival firms
Weight
Rating
0.08
0.2
0.11
0.07
3
3
4
2
0.2
0.05
0.09
0.2
1
4
3
3
2
IFE and EFE Matrix
Easy to understand. The input factors have a clear meaning to everyone inside or outside the company. There’s no confusion
Easy to use. The matrices do not require extensive expertise, many personnel or lots of time to build.
Focuses on the key internal and external factors. Unlike some other analyses (e.g. value chain analysis, which identifies all the
Multi-purpose. The tools can be used to build SWOT analysis, IE matrix, GE-McKinsey matrix or for benchmarking.
Limitations
Easily replaced. IFE and EFE matrices can be replaced almost completely by PEST analysis, SWOT analysis, competitive profile
Doesn’t directly help in strategy formation. Both analyses only identify and evaluate the factors but do not help the company
Too broad factors. SWOT matrix has the same limitation and it means that some factors that are not specific enough can be c
Weighted Score
0.24
0.6
0.44
0.8
0.15
0.27
0.4
2.9
he company. There’s no confusion over the terms used or the implications of the matrices.
ain analysis, which identifies all the activities in the company’s value chain, despite their importance), the IFE and EFE only highlight the k
ix or for benchmarking.
SWOT analysis, competitive profile matrix and partly some other analysis.
ctors but do not help the company directly in determining the next strategic move or the best strategy. Other strategy tools must be used
hat are not specific enough can be confused with each other. Some strengths can be weaknesses as well, e.g. brand reputation, which can
nd reputation, which can be a strong and valuable brand reputation or a poor brand reputation. The same situation is with opportunities a
me situation is with opportunities and threats. Therefore, each factor must be as specific as possible to avoid confusion over where the fac
void confusion over where the factor should be assigned.
Strength
Affordable, high quality doughnuts
“Hot Doughnuts Now” sign draws people from the
outside
Consistent expansion and growth in other countries
Product sold at supermarkets, convenience stores, and
retail outlets
Opportunities
1. Convenience because of busy/hectic lifestyles
2. People crave/love sweets
3. Expansion into South Korea & Russia; generated
investor interest
4. Dunkin' Donuts does not have the "hot" doughnuts
5. Tim Horton's does not have the globalization
(primarily in Canada)
Weaknesses
Product line is limited and slow to expand
Advertising could be more aggressive
Lack of true vision statement
Revenues down in comparison to rival firms
Threats
6. Dunkin' Donuts accounts for significant sales with coffee
drinks
7. Transformation of a health-conscious society
8. Starbucks has significantly more locations worldwide
(18,000 stores)
9. Coffee prices are subject to wild price fluctuations
10. Thousands of global 'mom & pop' shops
Space Matrix
Internal factors
Competitive advantage
Market shares
Affordable doughnuts
“Hot Doughnuts Now” entices
growth in other countries
Available at various outlets
Average
Finacial strength
rating
5
4
1
3
3
3.2
Gross Revenue
4
Reduced operating expense
2
Assets
1
Equity
Average
1
2
0.8
4.8
External factors
Industry strengths
Dunkin' Donuts accounts for significant
sales with coffee drinks
Transformation of a health-conscious
society
Starbucks has significantly more locations
worldwide (18,000 stores)
Coffee prices are subject to wild price
fluctuations
Thousands of global 'mom & pop' shops
Environmental factors
Convenience because of busy/hectic
lifestyles
People crave/love sweets
Expansion into South Korea & Russia;
generated investor interest
Dunkin' Donuts does not have the "hot"
doughnuts
Tim Horton's does not have the
globalization (primarily in Canada)
rating
-2
-2
-5
-1
-2
-2.4
2
4
1
5
2
2.8
Brand
My Brand KKK
Brand
Brand
Revenues
$490M
$749M
$16.477M
Market Cap
1.24B
5.32B
81.83B
EPS Ratio
Revenue/Empl
oyee
0.46
175,000
1.7
473,000
1.69
86,000
Net Income
30M
176M
2,068M
Stars
High earners
neutral cash flow
?
Low earnings, unstable
strategy: invest
Strategy: further analysis
Cash cow
strategy: milk
Dogs
strategy:Divest
Business Strength/Competitive Position
Internal Factor evaluation (Weighted S
Strong
Industry Attractiveness
High
External factor evaluatio (weighted
scores
Medium
Average
Low
4
3
2
or evaluation (Weighted Scores
Weak
4
3
2
1
Quandrant ii
Market development
market penetration
Product development
Quadrant iii
unrelated diversification
Grand Strategy Matrix
Rapid Market Growth
Slow Market Growth
Quandrant i
Product development
global markets
Diversification
market developmemt
Quadrant iv
Related diversification
Joint Ventures
Key Internal Factors
Internal strengths
Affordable, high quality doughnuts
“Hot Doughnuts Now” sign draws
people from the outside
Consistent expansion and growth in
other countries
Product sold at supermarkets,
convenience stores, and retail outlets
Internal Weaknesses
Product line is limited and slow to
expand
Advertising could be more aggressive
Lack of true vision statement
Revenues down in comparison to rival
firms
Key External Factors
Opportunities
1. Convenience because of
busy/hectic lifestyles
2. People crave/love sweets
Weight
0.08
0.2
0.11
0.07
0.2
0.05
0.09
0.2
0.14
0.08
3. Expansion into South Korea &
Russia; generated investor interest
4. Dunkin' Donuts does not have the
"hot" doughnuts
0.11
5. Tim Horton's does not have the
globalization (primarily in Canada)
0.09
0.1
Threats
6. Dunkin' Donuts accounts for
significant sales with coffee drinks
7. Transformation of a healthconscious society
8. Starbucks has significantly more
locations worldwide (18,000 stores)
9. Coffee prices are subject to wild
price fluctuations
0.14
0.1
0.1
0.07
10. Thousands of global 'mom & pop'
shops
Sum of Attractiveness of scores
0.07
Market Development
Market Penetration
AS
TAS
AS2
TAS2
2
0.16
3
0.24
3
0.6
3
0.6
3
0.33
1
0.11
1
0.07
2
0.14
0
0
1
0.2
2
0.4
2
0
0.18
2
1
0.1
0.09
3
0.6
4
0.8
0
0
0
3
2
0.42
0.16
1
1
0.14
0.08
1
0.1
0
0
2
0.22
2
0.22
3
0.27
2
0.18
0
0
3
0.42
3
0.42
4
0.4
2
0.2
2
0.2
1
0.1
1
0.07
2
0.14
1
0.07
4.47
2
0.14
4.1
Advantages and Disadvantages of other Tools.
Strategic management involves continuous assessments of critical components, such as external and
internal environments, short-term and long-term objectives, organizational structure, and strategic
control smallbusiness.chron.com (2018)
PESTLE analysis is useful for business planning, strategic planning, marketing, and product development
planning at the organizational level. Cost-effectiveness, a deeper understanding of business, alertness to
threats and the method to exploit opportunities are some main benefits of PESTLE analysis.
Technology and our society are evolving at a rapid pace. Such changes have made it difficult for the
management to anticipate the developments that can affect the growth prospects of an organization in
the long run. The most significant disadvantage of the model is that PESTLE analysis is only based on an
assessment of the external environment. So the results obtained from this model are not useful or
complete
To understand the sources of competitive advantage firms are using many tools to analyze their external
(Porter’s 5 Forces, PEST analysis) and internal (Value Chain analysis, BCG Matrix) environments. VRIO
analysis stands for four questions that ask if a resource is: valuable? rare? costly to imitate? And is a firm
organized to capture the value of the resources. Using VRIO Analysis is a great way to find the
advantages that one company may possess over the competition.
http://smallbusiness.chron.com/disadvantages-strategic-management-80740.html
Key External Factors
Opportunities
1. Convenience because of busy/hectic lifestyles
2. People crave/love sweets
3. Expansion into South Korea & Russia; generated investor interest
4. Dunkin' Donuts does not have the "hot" doughnuts
5. Tim Horton's does not have the globalization (primarily in Canada)
Threats
6. Dunkin' Donuts accounts for significant sales with coffee drinks
7. Transformation of a health-conscious society
8. Starbucks has significantly more locations worldwide (18,000 stores)
9. Coffee prices are subject to wild price fluctuations
10. Thousands of global 'mom & pop' shops
Total
Weight Rating
0.14
0.08
0.10
0.11
0.09
3
2
1
4
2
0.14
0.10
0.10
0.07
0.07
1.00
1
2
1
2
2
Weighted Score
0.42
0.16
0.1
0.44
0.18
0.14
0.2
0.1
0.14
0.14
2.02
Tim Horton's
Critical Success Factors
Advertising
Product Quality
Price Competitiveness
Management
Financial Position
Customer Loyalty
Global Expansion
Market Share
Total
Weight
0.13
0.16
0.10
0.11
0.12
0.12
0.14
0.12
1.00
Rating
2
2
3
2
3
3
1
1
Score
0.26
0.32
0.30
0.22
0.36
0.36
0.14
0.12
2.08
Dunkin' Donuts
Rating
4
3
3
2
3
4
2
3
Score
0.52
0.48
0.30
0.22
0.36
0.48
0.28
0.36
3.00
Starbucks
Rating
4
3
2
3
2
4
3
3
Score
0.52
0.48
0.20
0.33
0.24
0.48
0.42
0.36
3.03
Strengths:
Affordable, high quality doughnuts
“Hot Doughnuts Now” sign draws people from the outside
Consistent expansion and growth in other countries
Product sold at supermarkets, convenience stores, and retail outlets
Weaknesses:
Product line is limited and slow to expand
Advertising could be more aggressive
Lack of true vision statement
Revenues down in comparison to rival firms
Internal Factor Evaluation
Strengths
Affordable, high quality doughnuts
“Hot Doughnuts Now” sign draws people from the outside
Consistent expansion and growth in other countries
Product sold at supermarkets, convenience stores, and retail outlets
Weaknesses
Product line is limited and slow to expand
Advertising could be more aggressive
Lack of true vision statement
Revenues down in comparison to rival firms
Weight
Rating
0.08
0.2
0.11
0.07
3
3
4
2
0.2
0.05
0.09
0.2
1
4
3
3
2
IFE and EFE Matrix
Easy to understand. The input factors have a clear meaning to everyone inside or outside the company. There’s no confusion
Easy to use. The matrices do not require extensive expertise, many personnel or lots of time to build.
Focuses on the key internal and external factors. Unlike some other analyses (e.g. value chain analysis, which identifies all the
Multi-purpose. The tools can be used to build SWOT analysis, IE matrix, GE-McKinsey matrix or for benchmarking.
Limitations
Easily replaced. IFE and EFE matrices can be replaced almost completely by PEST analysis, SWOT analysis, competitive profile
Doesn’t directly help in strategy formation. Both analyses only identify and evaluate the factors but do not help the company
Too broad factors. SWOT matrix has the same limitation and it means that some factors that are not specific enough can be c
Weighted Score
0.24
0.6
0.44
0.8
0.15
0.27
0.4
2.9
he company. There’s no confusion over the terms used or the implications of the matrices.
ain analysis, which identifies all the activities in the company’s value chain, despite their importance), the IFE and EFE only highlight the k
ix or for benchmarking.
SWOT analysis, competitive profile matrix and partly some other analysis.
ctors but do not help the company directly in determining the next strategic move or the best strategy. Other strategy tools must be used
hat are not specific enough can be confused with each other. Some strengths can be weaknesses as well, e.g. brand reputation, which can
nd reputation, which can be a strong and valuable brand reputation or a poor brand reputation. The same situation is with opportunities a
me situation is with opportunities and threats. Therefore, each factor must be as specific as possible to avoid confusion over where the fac
void confusion over where the factor should be assigned.
Strength
Affordable, high quality doughnuts
“Hot Doughnuts Now” sign draws people from the
outside
Consistent expansion and growth in other countries
Product sold at supermarkets, convenience stores, and
retail outlets
Opportunities
1. Convenience because of busy/hectic lifestyles
2. People crave/love sweets
3. Expansion into South Korea & Russia; generated
investor interest
4. Dunkin' Donuts does not have the "hot" doughnuts
5. Tim Horton's does not have the globalization
(primarily in Canada)
Weaknesses
Product line is limited and slow to expand
Advertising could be more aggressive
Lack of true vision statement
Revenues down in comparison to rival firms
Threats
6. Dunkin' Donuts accounts for significant sales with coffee
drinks
7. Transformation of a health-conscious society
8. Starbucks has significantly more locations worldwide
(18,000 stores)
9. Coffee prices are subject to wild price fluctuations
10. Thousands of global 'mom & pop' shops
Space Matrix
Internal factors
Competitive advantage
Market shares
Affordable doughnuts
“Hot Doughnuts Now” entices
growth in other countries
Available at various outlets
Average
Finacial strength
rating
5
4
1
3
3
3.2
Gross Revenue
4
Reduced operating expense
2
Assets
1
Equity
Average
1
2
0.8
4.8
External factors
Industry strengths
Dunkin' Donuts accounts for significant
sales with coffee drinks
Transformation of a health-conscious
society
Starbucks has significantly more locations
worldwide (18,000 stores)
Coffee prices are subject to wild price
fluctuations
Thousands of global 'mom & pop' shops
Environmental factors
Convenience because of busy/hectic
lifestyles
People crave/love sweets
Expansion into South Korea & Russia;
generated investor interest
Dunkin' Donuts does not have the "hot"
doughnuts
Tim Horton's does not have the
globalization (primarily in Canada)
rating
-2
-2
-5
-1
-2
-2.4
2
4
1
5
2
2.8
Brand
My Brand KKK
Brand
Brand
Revenues
$490M
$749M
$16.477M
Market Cap
1.24B
5.32B
81.83B
EPS Ratio
Revenue/Empl
oyee
0.46
175,000
1.7
473,000
1.69
86,000
Net Income
30M
176M
2,068M
Stars
High earners
neutral cash flow
?
Low earnings, unstable
strategy: invest
Strategy: further analysis
Cash cow
strategy: milk
Dogs
strategy:Divest
Business Strength/Competitive Position
Internal Factor evaluation (Weighted S
Strong
Industry Attractiveness
High
External factor evaluatio (weighted
scores
Medium
Average
Low
4
3
2
or evaluation (Weighted Scores
Weak
4
3
2
1
Quandrant ii
Market development
market penetration
Product development
Quadrant iii
unrelated diversification
Grand Strategy Matrix
Rapid Market Growth
Slow Market Growth
Quandrant i
Product development
global markets
Diversification
market developmemt
Quadrant iv
Related diversification
Joint Ventures
Key Internal Factors
Internal strengths
Affordable, high quality doughnuts
“Hot Doughnuts Now” sign draws
people from the outside
Consistent expansion and growth in
other countries
Product sold at supermarkets,
convenience stores, and retail outlets
Internal Weaknesses
Product line is limited and slow to
expand
Advertising could be more aggressive
Lack of true vision statement
Revenues down in comparison to rival
firms
Key External Factors
Opportunities
1. Convenience because of
busy/hectic lifestyles
2. People crave/love sweets
Weight
0.08
0.2
0.11
0.07
0.2
0.05
0.09
0.2
0.14
0.08
3. Expansion into South Korea &
Russia; generated investor interest
4. Dunkin' Donuts does not have the
"hot" doughnuts
0.11
5. Tim Horton's does not have the
globalization (primarily in Canada)
0.09
0.1
Threats
6. Dunkin' Donuts accounts for
significant sales with coffee drinks
7. Transformation of a healthconscious society
8. Starbucks has significantly more
locations worldwide (18,000 stores)
9. Coffee prices are subject to wild
price fluctuations
0.14
0.1
0.1
0.07
10. Thousands of global 'mom & pop'
shops
Sum of Attractiveness of scores
0.07
Market Development
Market Penetration
AS
TAS
AS2
TAS2
2
0.16
3
0.24
3
0.6
3
0.6
3
0.33
1
0.11
1
0.07
2
0.14
0
0
1
0.2
2
0.4
2
0
0.18
2
1
0.1
0.09
3
0.6
4
0.8
0
0
0
3
2
0.42
0.16
1
1
0.14
0.08
1
0.1
0
0
2
0.22
2
0.22
3
0.27
2
0.18
0
0
3
0.42
3
0.42
4
0.4
2
0.2
2
0.2
1
0.1
1
0.07
2
0.14
1
0.07
4.47
2
0.14
4.1
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