Introduction

The aim of this report is to conduct a SWOT and PESTLE analysis of Crosstown Doughnuts.
The company has been founded in 2014 and sells doughnuts, ice cream and coffee across
London and Cambridge. It sells in 26 locations across the UK and does not conduct any
international operations. The company, according to the 2020 Full Accounts from Companies
House, is worth around 1 million GBP.
The company offers doughnuts in different shapes and amounts. They’re sold either singular,
in half-dozens or dozens. On special occasions, such as Valentine’s day or Mother’s day, the
customers are able to purchase doughnuts in fancy gift boxes.
Crosstown Doughnuts additionally sells ice cream or milkshakes that come in vegan options
as well.
(tbc)

Method
The analysis is going to be done by researching the possible factors that might influence the
business, be it in a positive or a negative way using 2 models – SWOT and PESTLE. Due to
the company being only medium sized, the number of sources covering it is relatively small.
This is why, in order to overcome the obstacle, the research would be conducted using the
sources covering businesses operating is a similar niche such as Krispy Kreme or Dunkin
Donuts.
(tbc)

Results

SWOT analysis

Strengths
● Perfect location: This is attributed to Crosstown Donuts' perfect location as a must go
for breakfast or snack. By focusing on a small niche, the fast-food chain has set itself
apart from its competitors.
● Great supply chain management: Crosstown efficiently manages its supply chain to
ensure the timely delivery of new products to its affiliates.
● Environmentally Friendly Policy: In today's society threatened by climate change,
companies adopt an eco-friendly policy favoured by consumers. Crosstown Donuts
packaging is always made of environmentally friendly paper.
 ● Good advertising policy: They promote their brands through the media and have
campaigns with other famous food or clothing brands that make them more
accessible to a wide variety of customers.

Weaknesses
● Weak position in the market: Crosstown Doughnuts, despite some media coverage,
is still relatively small compared to its other competitors, especially Krispy Kreme
● Stock shortages: Due to the current high demand, the store often runs out of
doughnuts 2-3 hours before the closing time which makes the store lose potential
customers and revenue

Opportunities
● Offering more variety: Because Crosstown lacks variety in its menu, it has the
opportunity to meet the needs of the entire food business market. The chain can
cover all sorts of drinks and food that match its main line of Donuts.
● Expanding market presence: Crosstown must increase the number of stores and
market presence in order to attract more customers as the fast food market is
increasingly popular and easy to grow.
● Offer healthier options: Crosstown can also tap into the growing need for healthy
food by offering healthier options.
● Increasing activity in online markets: Online market is an emerging market, so
Crosstown can fully exploit this market and develop its brand through online brand
promotions.

Threats (according to Market survey of brands of donuts of

Research Report World 2019)
● Intense Competition: With strong competitors like McDonald’s, Burger King, KFC,
Crosstown’s market share, and profits are always under threat.
● Global Pandemic and Recession: The pandemic has devastated economies globally
with many countries already sliding deeper into recession.
● Increasing Health-Consciousness: The ever-increasing number of health-conscious
consumers threatens fast-food chains including Crosstown Donuts, customers can
migrate to competitors offering healthier options.
● Stringent Regulations: The prevalence of cardiovascular diseases, hypertension, and
obesity due to unhealthy junk and fast food can prompt governments to enact
stringent regulations targeting fast-food joints like Crosstown Donuts.

PESTLE analysis
The company management needs to keep in mind the PESTLE and SWOT factors in order
to keep its position in the market, keep growing and avoid any possible inconveniences.
Political factors
When it comes to the political factors, the company should be aware of any potential taxes
or restrictions on junk foods. Based on the Queen’s Speech from 11th May 2021, the
government is taking steps to combat obesity. According to Sky News, “adverts for food that
is high in fat, salt and sugar will be restricted from April next year. This includes a ban on
junk food adverts before the 9pm watershed and a total block online. Businesses with 250 or
more employees will also have to display how many calories are in the food they sell, but not
on drinks.”. As a result, the company will need to review its marketing policies and check
whether it is still possible for them to advertise. It will also be required to review if the 250+
employees rule will be applicable to Crosstown Doughnuts.

Economical factors
The economy is recovering, the lockdowns are being eased and the hospitality businesses
are reopening. As a result, more people will be able to go outside and purchase doughnuts
or coffee. Barclays’ analysts have suggested a “"sharp uptick in activity" after shops, outdoor
restaurants, beer gardens and leisure facilities such as gyms reopened on 12 April.”.

Social factors
The life after the pandemic means that more people will be likely to attend gym or keep a
healthy diet. This, in addition to the Queen’s announcement regarding unhealthy food, might
have negative consequences for Crosstown Doughnuts. The sales might drop not only due
to the advertising ban, but also due to the change in people’s behaviour.

Technological factors
In the technology segment, Crosstown Donuts has done quite well in terms of online
promotion when they put their activities and images on popular social networks like
Instagram or Facebook. In addition, they also know how to combine online ordering,
shipping and payment platforms like uber eats according to Without blog ,2020. These things
have given them the opportunity to promote their image to more people, especially the
young generations, and increase their revenue through online platforms, especially during
the recent pandemic but this shows that Crosstown's technology is not as competitive as that
of Dukin's Donut

Legal factors
Crosstown has complied with and approved of UK food safety laws. Reviewers in The
Resident 2019 have shown that Crosstown's products are completely hygienic and quality
guaranteed. This gave Crosstown a good impression on consumers and food critics and built
up a better image and quality of its products
Environmental factors
"The current climate has pushed us to think outside the box and create new opportunities,"
explains Adam Wills, who founded Crosstown with JP Then in 2014. "There has never been
a more important time for independent operators to band together, all three of these new
delivery hubs are utilising unused space from friendly operators who are looking to put a
basement, a mezzanine or a spare first floor area to work. This shows that the current
environment enabled Crosstown to expand its facilities and provided more opportunities for
Crosstown to grow but that means they will lose more maintenance costs because of most of
the pandemic, so Crosstown could not receive any direct sales of its own stores.

Discussion
The previously mentioned SWOT and PESTLE analysis are both useful tools for
understanding the business. Generally, they are considered complete opposites: The SWOT
analysis allows companies to understand the strengths, weaknesses, opportunities, and
threats, and as a result is useful for an internal focus of the company. On the other hand, the
PESTLE analysis is more concerned with the external factors of the business, which the
company cannot directly influence but which are still of importance. This means that when
viewed together, they can be very useful.

From the PESTLE analysis, we can understand big-picture factors that will affect our
business. This includes political, economic, social, technological, legal, and environmental
factors. This gives us a number of constraints which we have to operate in. We know, for
example, that politically ‘junk food’ is becoming rather unpopular and will face heavy taxes.
This is quite good for Crosstown doughnuts, because when we look at the SWOT analysis,
we also see that one of the perceived ‘weaknesses’ is that it gets relatively low media
attention compared to competitors, like Krispy Kreme. In the future, because of the political
shift, we can expect that Krispy Kreme may start to be viewed negatively in the eyes of the
public, and we can use this cultural shift to our advantage by stepping in the shoes of Krispy
Kreme.

However, the analysis does not stop there. Because Crosstowns Doughnuts can also be
considered unhealthy when compared to other snacks, this threat could apply to the
company as well. This ties in with the possibilities for Crosstowns Doughtnuts to respond to
this future threat in the form of opportunities: Crosstowns Doughtnuts should start offering
new, healthier product lines, which would also address the problem of a lack of variety in the
product offering. By capitalizing on the strengths of its strong online marketing campaigns,
Crosstown Doughnuts can hope to bring in new customers. This also relates back to the
technological factors in the PESTLE analysis: the recent pandemic has heavily increased the
interest in online ordering platforms, and the company should take advantage of this.

The analysis does not stop here. The strategy outlined so far is still rather generic, and it will
be interesting to see how other competitors will respond as well. Previously, Crosstowns
Doughtnuts may have only considered their direct competitors to be Dunkin Donuts and
Krispy Kreme, but if they are attempting to break into the Healthy food market, they will also
face stiff competition from the existing players. Furthermore, because the whole fast food
industry may be coming under threat in the near future, other competitors will also be
thinking of doing something similar to stay alive. Crosstown Doughnuts must therefore be
very careful and explicit about what their competitive advantage is. By looking at the SWOT
analysis, we see that this could be its environmentally-friendly brand, which it should
enhance so that customers will come to make this association even stronger. By starting the
transition to a greener, environmentally-friendly and healthy image, Crosstown Doughnuts
will be in the position perhaps to be the market leader in ‘healthy fast food’ in the coming
years.