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Introduction to Business and Technology SUMA04 - sect M Krispy Kreme Case Part 1 August 1 2004 COMPANY OVERVIEW AND INDUSTRY OUTLOOK The principal business of Krispy Kreme Doughnuts which began in 1937 owned and franchising Krispy Kreme doughnut stores make and sell over 20 varieties of premium quality doughnuts including the Hot Original Glazed Each of the traditional stores is a doughnut factory with the capacity to produce from 4000 dozen to over 10000 dozen doughnuts daily Consequently each factory store stores which contain a full doughnut-making production line has significant fixed or semi-fixed costs and margins and profitability are significantly impacted by doughnut production volume and sales Their doughnut stores are versatile in that most can support multiple sales channels to more fully utilize production capacity SALES AND OBJECTIVES Responses from customers indicate that Krispy Kremes doughnuts are enjoyable and an excellent reputation has developed Inquiries form prospective customers suggest that there is considerable demand for their product Krispy Kremes marketing strategy is to aggressively enhance promote and support the fact that their products are high quality and offer consumers a one-of-a-kind taste in this industry Strategic insights are 1Opening the door to International Sales in December 28 2000 has proven a success for Krispy Kreme Krispy Kreme currently has stores in Europe Australia Asia and New Mexico 2Krispy Kreme has expanded its market to include states other than the previously mandated southeastern states to include all but about eight of the 50 United States including Hawaii 3Drive-through windows along with discounted sales to community organizations that in turn sell our products for fundraising purposes 4Off-premises sales Daily sales of fresh doughnuts on a branded unbranded and private label basis to convenience and grocery stores and 5Select co-branding customers Doughnuts are sold to these customers on trays for display and sale in glass-enclosed cases and in packages for display and sale on both stand-alone display units and on our customers shelves
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