This website uses cookies to ensure you have the best experience. Learn more

Krispy Kreme Case Study

730 words - 3 pages

Krispy Kreme Doughnuts Inc.In 2000 Krispy Kreme Doughnuts had one of the most successful initial public offerings to date, and was considered to be a "can't miss" opportunity for investors A company beloved by its customers, with a brand name which seemed to be gaining popularity among people who had never even tried its products. But in only five short years following Krispy Kreme went from a company with huge potential and high expectations to one with serious going concern issues and a total lack of investor confidence. What happened was not due to any huge market shift or economic problem but mainly due to a company that got too far ahead of itself too fast, and couldn't keep up with its own expectations.At the turn of the century Krispy Kreme was a company which was doing fairly well financially; they were low in debt and high in liquidity, showed comparatively good returns on assets and equity, and had shown consistently increasing earnings year over year. At this point in time investors and analysts were becoming increasingly bullish on the company not because of anything special about the company's current financial situation, but because of the growth potential they believed existed. The doughnut industry of course was not expected to grow much if it all, but because of the strong brand image Krispy Kreme had built in regions where Krispy Kreme doughnuts weren't even sold there was a general consensus that the company could use the cash from its IPO to expand into new markets and simply take over market share. The biggest problem with this expectation is that it totally discounts local markets and doesn't evaluate Krispy Kreme against other regional brands such as Dunkin' Donuts. From what occurred over the next five years it appears the high expectations of Wall Street and the analysts who were overwhelmingly recommending investment in Krispy Kreme Doughnuts actually played a significant role in having the opposite effect.With all of these investor expectations on the company, best shown by its amazingly high price/equity ratio of 62 in April of 2000, Krispy Kreme began a period of rapid franchise expansion. However, in many situations the company didn't do its due...

Find Another Essay On Krispy Kreme Case Study

Krispy Kreme External Anaylsis Essay

1146 words - 5 pages this most would be doughnut vendors choose to purchase a franchise from an established company, which is also readily available. There are few barriers to entry into the doughnut market. Interfirm Rivalry/Threat of new entrants The interfirm rivalry is mixed in the case of Krispy Kreme. Barriers to entry into the doughnut market are fairly small, since doughnuts are simple to manufacture and the raw materials are plentiful and inexpensive. On

Krispy Kreme # 1 Essay

2835 words - 11 pages :// (accessed July 29, 2004)3. Boone, Louis E and Kurtz, David L. "Contemporary Business 11e." Krispy Kreme Case Study. Versailles, Kentucky Thompson South-Western Publishers Inc., 2005.

Krispy Kreme

1937 words - 8 pages 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

Krispy Kreme

783 words - 4 pages I am writing to you, as I feel that you are in dire need of my brother Elijah Silverman as a product tester. Being the president of Krispy Kreme Donuts, you know that in order to attract new customers, you need new products. If you want to obtain real life data, that can be used to better your company, I would highly recommend hiring my brother as a product tester. He would be a terrific tester as he has vast knowledge of donuts, he has capacity

Krispy Kreme

810 words - 3 pages Now" sign serves as their biggest signal to the freshest doughnuts offered. Krispy Kremes understand that customers value freshness, quality and consistency when it comes to doughnuts and they provide a visual of that value through the Doughnut Theatre. Quality in every single doughnut is vital to Krispy Kreme and this is why it has so many loyal customers.Krispy Kreme's most important tangible asset is the "Hot Doughnut Machine", because it

Krispy Kreme

1807 words - 7 pages Krispy Kreme Doughnuts, Inc. is a retailer and wholesaler of doughnuts. Its principal business is owning and franchising Krispy Kreme doughnut stores where over 20 varieties of doughnuts, including its Hot Original Glazed, are made, sold and distributed and where an array of coffees and other beverages are offered. Krispy Kreme began a single doughnut shop in Winston-Salem, North Carolina on July 13, 1937, where Vermon Rudolph bought a secret

Krispy Kreme Doughnut SWOT Analysis

1443 words - 6 pages COMPANY ASSESSMENT Company Background In 1933, Vernon Rudolph and his uncle purchased a small doughnut shop in Paducah, Kentucky. This doughnut shop was owned by a French chef named Joe LeBeau. Chef LeBeau had a secret doughnut recipe that he included in the sale of the shop. This recipe that Vernon bought is used to make those wonderfully delicious glazed doughnuts that Krispy Kreme is known for world wide. In 1937, Vernon decided to settle

The Health of Krispy Kreme

1098 words - 4 pages PAGE PAGE 6 The health The health of Krispy KremeDawn PattenACC/226 Managerial Accounting11/25/07The health of Krispy KremeThere are five different analyses used to determine the health of a Krispy Kreme such as depreciation analysis, company stock analysis, cash flow statement analysis, income statement trend analysis, and management analysis. With using these five analyses we will look at the financial health of Krispy Kreme Doughnuts, Inc

Krispy Kreme -- International Expansion discussion

901 words - 4 pages , or muffins during the busy weekday mornings. The English are admittedly unconcerned with calorie content; instead, they gravitate towards convenient foods that can be consumed at one’s desk or on the way to work. Unlike the remainder of Europe, then, it is unsurprising that the British diet is largely composed of prepackaged, heavily processed “ready meals”( in 1937, Krispy Kreme Doughnuts has

Global Market Analysis: Krispy Kreme in Hong Kong

989 words - 4 pages Company HistoryKrispy Kreme was established in 1937 by Vernon Rudolph who left the family business, taking with him a 1936 Pontiac, $200 in cash, a doughnut making machine and the secret yeast raised doughnut recipe. Rudolph opened the first Krispy Kreme doughnut shop in Winston- Salem, North Carolina. Rudolph took on two new partners and rented a building for $25 across from Salem College. With no money to buy ingredients, Rudolph promised a

Project Management strategy

8631 words - 35 pages acknowledges that Krispy Kreme Doughnuts has furnished to the undersigned potential Investor ("Investor") certain proprietary data ("Confidential Information") relating to the business affairs and operations of Krispy Kreme Doughnuts for study and evaluation by Investor for possibly investing in Krispy Kreme Doughnuts. It is acknowledged by Investor that the information provided by Krispy Kreme Doughnuts is confidential; therefore, Investor agrees

Similar Essays

Krispy Kreme Case Study

1613 words - 6 pages Krispy Kreme Doughnuts, Inc.What can the historical income statements (case Exhibit 1) and balance sheets (case Exhibit 2) tell you about the financial health and current condition of Krispy Kreme Doughnuts, Inc.?The company's financial performance looks quite good at the end of Feb 1, 2004. From the exhibit 1, income statement, we can see that Krispy Kreme was growing from the year ended Jan 30, 2000 to the year ended Feb 1, 2004. Total revenue

Krispy Kreme Doughnuts Inc Case Study

1130 words - 5 pages Krispy Kreme Doughnuts Inc Case Study Summary In this SWOT analysis, I will delve into the strengths, weaknesses, opportunities, and threats that affect the Krispy Kreme Doughnuts Inc. Krispy Kreme is a highly successful company, whose main product, not surprisingly, is doughnuts. The company went public in 2000, and saw a hugely successful increase in share price immediately after. Vernon Rudolph founded the Krispy Kreme company in 1937

Krispy Kreme Case Analysis

1923 words - 8 pages Krispy Kreme Case Analysis INDUSTRY ANALYSIS In 2003, the U.S. doughnut industry was a $5 - $6 billion market. American households consumed an estimated 10 -12 billion doughnuts annually; this translates into over three dozen doughnuts per capita. In 2002, doughnut industry sales rose by about 13%. Sales from doughnut outlets rose by about 9%, to approximately $3.6 billion, whereas packaged doughnut sales at supermarkets, convenience

Krispy Kreme Case Essay

584 words - 3 pages Despite the corporation’s relatively small size in relation to industry giants such as Dunkin Donuts and Starbucks, Krispy Kreme’s brand recognition and equity remains powerful. Because Krispy Kreme is hesitant to invest in national advertising, the corporation’s strategy is based strongly around brand equity and the customer’s experience. However, Krispy Kreme ultimately brings in money three ways. A majority of the revenues are produced