Strategic case analysis of KKD CPM, IFE, EFE, SWOT, SPACE & BCG Matrices. Revised Vision & Mission Statement Strategic objectives, strategic implementation, revised balance sheet.
krispy kreme marketing strategyFull description
Full description
Krispy Kreme Doughnuts CASE STUDY
Harun KAYA
BU-524 Strategic Management Management Prof. Chris NAJERA
8/24/2011
Krispy Kreme Doughnut 1)
Identify the firm’s existing vision, mission, objectives, and strategies.
Vision To be the worldwide leader in sharing delicious tastes and creating joyful memories.
Mission To touch and enhance lives through the joy that is Krispy Kreme. Objectives and Strategies
•
•
Consumers are our lifeblood, the center of the doughnut There is no substitute for quality in our service to consumers
•
Impeccable presentation is critical wherever Krispy Kreme is sold
•
We must produce a collaborative team effort that is unexcelled
•
We must cast the best possible image in all that we do
•
We must never settle for "second best;" we deliver on our commitments
•
We must coach our team to ever-better results
2) Develop vision and mission statements for the organization. Vision To be a trusted worldwide leader in providing tasty and healthy doughnuts .
Mission Krispy Kreme Doughnut strives to provide the best doughnuts along with consideration of safety regulations for our valued customers.
Objectives The objectives of the organization should be to make people see the healthy side of doughnuts and thus increase its sales and revenue through customer attraction.
Strategies The strategy of the organization should be to work on increasing customer based brand equity in order to enhance competitive advantage in the organization. For this a mixture of advertising and other marketing tactics needs to be employed and the customers need to start realizing that the doughnuts served by KKD are not as detrimental to their health as perceived.
External Opportunities: •
Development
into
External Threats: diversified
•
product markets •
Detection
of
the
business and profitability the
programs
social
to
•
outreach
promote
of
the
Fall in the number of company
thus a fall in the authority over
doughnuts and to promote the
strategies and management of
customer based objectives and
the organization as a whole •
Reaching the market to really
and
then
to
develop
the
marketing and strategic policy in accordance to that. Moving
into
healthier
alternatives for example sugar free doughnuts •
presence
stores and rise in franchises and
the
know what the customers want
•
Global
competitors •
mission of the organization. •
and
Starbucks and Dunkin Donuts.
problem
the business and thus the fall in
Develop
competition
increasing global recognition of
occurring in the management of
•
Tough
Capitalization
of
the
holiday
seasons and availability of KKD in recreational places.
More health conscious customer base
•
Development markets
of
organic
3) Identify the organization’s external opportunities and threats.
4) Construct a Competitive Profile Matrix (CPM)
KKD
Dunkin
Starbucks
CRITICAL SUCCESS FACTORS
Customer
Weıght
Ratıng
Score
Ratıng
Score
Ratıng
Score
0.1
2
0.2
3
0.3
4
0.4
0.2
2
0.4
2
0.4
4
0.8
0.2
2
0.4
2
0.4
4
0.8
0.05
2
0.1
3
0.15
3
0.15
0.1
2
0.2
3
0.3
3
0.3
0.1
2
0.2
3
0.3
4
0.4
0.2
2
0.4
3
0.6
4
0.8
Loyalty Large Market Share Advertisi ng Global Markets Market Share Managem ent Experienc e Social
Recogniti on Strong
0.15
2
0.3
3
0.45
4
0.6
Business Partners 1.1
Total
2.2
3
4.25
5) Construct an External Factor Evaluation (EFE) Matrix.
Key
External
Weight
Rating
Weighted Score
factors Opportunities Diversification of
0.20
1
0.2
0.1
3
0.3
0.1
2
0.2
Market Research
0.15
2
0.3
Development
of
0.05
3
0.15
of
0.05
2
0.1
Product Detection
of
Problem
in
management Social Outreach Programs
healthier doughnuts Capitalization holiday and
season
recreational
spots
Threats
Tough Competition Global presence
0.2
3
0.6
0.05
3
0.15
0.05
4
0.2
0.02
1
0.02
0.03
2
0.06
of competitors Health conscious customers Fall in number of company stores Rise
in
organic
foods Total
1
4.48
6) Indentify the organization’s internal strengths and weaknesses. Strengths -
Globally recognized brand name
-
Having over 70 years long history as an American icon
-
Having quality and well educated workforce
-
Increasing market share in the United States
-
Recognized as being healthy and tasty doughnuts company in the United States
Weaknesses
- Krispy Kreme does not spend much for marketing its products and on media advertising while its competitors do. - The price of different ingredients and raw materials especially high quality coffee beans is increasing. - Krispy Kreme needs to introduce low calorie doughnuts and other food items
7) Construct an Internal Factor Evaluation (IFE) Matrix.
Key
Internal
Weight
Rating
Weighted Score
0.20
3
0.6
0.1
2
0.2
0.1
2
0.2
0.2
4
0.8
0.1
1
0.1
factors Strengths Production Capacity Human Resource Power Price Differentiation Different Channels
of
distribution Diversification of Product
Supply
Chain
0.05
3
0.15
0.05
1
0.05
single product Dropping sales
0.05
3
0.15
Apparently
0.05
3
0.15
0.05
1
0.05
0.05
2
0.1
Management
Weaknesses Reliance
on
unhealthy product Fall in number of company stores Single
location
production Total
2.55
8) Prepare a Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix, Strategic Position and Action Evaluation (SPACE) Matrix, Internal-External (IE) Matrix, Grand Strategy Matrix, and Quantitative Strategic Planning Matrix (QSPM) as appropriate. Give advantages and disadvantages of alternative strategies.
Strategic Position and Action Evaluation (SPACE) Matrix FP
+6
-6
6
CP
IP
-6 SP
Financial
Industry
Position
Position 1. Growth
ROI
2
Potential 2. Profit
3
Liquidity
3
Potential 3. Consumer
5
Working Capital
2
Trust 4. Investment
4
Cash Flow
3
Reliability
3
Earnings Per Share
2
12
5. Productivity
4
2.2
19
Stability
Competitive
Position 1. Economic
Position
Changes 2. Government
-2
Market Share
-1
Control
-2
Product Quality Product Life
-1
6. Competition
-2
Cycle Customer
-2
4. Price Elasticity
-5
Loyalty Capacity
-1
5. Entry Barriers
-4
Utilization
-1
-15
-2.8
-6
4
-1.2
y axis
-0.6
x axis
Internal-External (IE) Matrix
IFE 2.55 EFE 2.28
IFE Total Weighted Scores Strong 3.0 to 4.0
EFE Total Weight ed
High Mediu m
3.0 to 4.0 2.0 to . 99
Average 2.0 to 2.99
xxxx x
Weak 1.0 to 1.99
2.8
1.0 to 1.99
Low
Score Implications from table: Generic Goal: Implied Strategies:
Hold and Maintain Market Penetration Product Development
Rapid Market Growth
Quadrant II
Quadrant I
K.K. Doughn uts Weak
Strong
Completive
Completive Positi
Position
on
Quadrant III
Quadrant IV
Slow Market Growth
Grand Strategy Matrix
Quantitative Strategic Planning Matrix (QSPM)
Product
Market
Market
Development
Penetration
Developme nt
Key Factors
Weig
AS
TAS
AS
TAS
AS
TAS
ht EXTERNAL Strengths Diversification
0.6
3
0.6
3
0.6
0.3
3
0.3
3
0.3
2
0.2
4
0.4
2
0.2
0.15
4
0.6
4
0.6
4
0.6
of 0.05
3
0.15
1
0.05
2
0.1
of 0.05
2
0.1
3
0.15
3
0.15
of 0.20
3
Product Detection
of 0.1
Problem
in
3
management Social
Outreach 0.1
Programs Market Research Development healthier doughnuts Capitalization
holiday season and recreational spots
Threats 3
0.6
2
0.4
3
0.6
2
0.1
2
0.1
2
0.1
0.05
3
0.15
4
0.2
3
0.1
0.2
4
0.8
2
0.4
2
0.4
Resource 0.1
2
0.2
3
0.3
2
0.2
0.1
3
0.3
2
0.3
3
0.3
of 0.2
4
0.6
2
0.4
3
0.6
of 0.1
2
0.2
3
0.3
4
0.4
Chain 0.05
3
0.15
2
0.1
2
0.1
Reliance on single 0.05
3
0.15
1
0.05
2
0.1
Tough Competition
0.2
Global presence of 0.05 competitors Health customers
INTERNAL
Strengths
Production Capacity Human Power Price Differentiation Channels distribution Diversification markets Supply Management Weaknesses
product
Dropping sales
0.05
3
0.15
3
0.15
3
0.15
Unhealthy product
0.05
2
0.1
2
0.1
3
0.15
Fall in number of 0.05
2
0.1
2
0.1
2
0.1
company
5.95
5.2
9) Recommend specific strategies and long-term objectives. Show how much your recommendations will cost. Clearly itemize these costs for each project year. Compare your recommendations to the actual strategies planned by the company. 1.) Redirect Employees – Reduce Work Pool if necessary =
3 million $
2.) Implement A new Algorithm =
250 million $
3.) Refocus Advertising Network=
90 million $
5.1
10) Specify how your recommendations can be implemented and what results you can expect. Prepare forecasted ratios and projected financial statements. Present a timetable or agenda for action.
Strategy Implementation
KK Doughnuts should establish a financial and operational audit committee within the corporation, both company-owned and franchised to determine causes of negative ratio of revenues to expenses.
The strategic implementation will follow this rank:
1. Redirect Employees
2012 Q1
2. Implement the new doughnuts
2012 Q3
3. Refocus the Advertising Network
2013 Q1
11) Recommend specific annual objectives and policies.
KK Doughnuts has a major competitor which is Dunkin Donuts, they should try to impose the market as being number one doughnut store by beating Dunking Donuts. It is possible if KK Doughnuts implement new marketing strategies against to its competitors. The company should get rid of inefficient job titles, and the administrators of the company should pay attention for every recommendations and ideas within the organization.
12) Recommend procedures for strategy review and evaluation
First of all, a ‘new offer’ should be occurred for strategy review and evaluation. This ‘offer’ should be carried by a ‘senior manager’. Strategic management planning team needs to carry out the information-collecting tasks. A successful strategic plan is executed when employees, advisors, and freelancers contribute to every phase of the planning procedure. ‘Department manager’ should also focus on the plan and try to develop strategies with his/her team, and than, respectively; the plan should be audited by Executive Vice President and CEO.
