Krispy Kreme Doughnuts: Presented By: ADITI SHRMA (E096001) HIMANSHU VERMA (E096018)

KRISPY KREME DOUGHNUTS
PRESENTED BY:
ADITI SHRMA(E096001)
HIMANSHU VERMA(E096018)
INTRODUCTION
Krispy
Kreme It was
It startedOne of
doughnuts It started
was onein of
the the best
exploring
the 1930s
most inbrands
other
the but no
successful
markets
companies
southernformal
in in the late
states ofadvertisin
Restaurant 1990s
the US
sector in g budget
America
BACKGROUND
Started in 1933 by Ishmael Armstrong, a farmer and a

store owner, who bought a doughnut shop from a French
chef.
●
Along with the co’s assets he also got the secret doughnut
recipe handwritten on a piece of paper.
Shortly, Vernon Carver Rudolph, Ishmael’s nephew,

joined as a delivery boy and later became a partner.
●
The partners moved to Nashville for expanding their business in the
mid-1930s and soon Krispy Kreme stores became a family business.
BACKGROUND CONTINUE,,,,,,,
Some stores were opened in Charleston and Atlanta by Rudolph’s

family.
Same recipe but decentralized making process.
Wholesale operation and doughnuts were mainly supplied to local

grocery stores.
BACKGROUND CONTINUE,,,,,,,
Summer 1937, Rudolph left Nashville and moved to Winston-Salem in

north Carolina to open his own doughnut shop with his two friends as
partners.
What they had with them- $25 in cash, some doughnut making
equipment, the secret recipe and the name “KRISPY KREME
DOUGHNUTS”.
The Pontiac car was remolded as a delivery

van to deliver the doughnuts.
SELLING OF FIRST ‘KRISPY KREME DOUGHNUTS”
 July 13 1937, first

“Krispy Kreme
doughnuts” were sold.
 Quickly became
popular and the
demand for them
increased.
KRISPY KREME ‘S RETAIL SERVICE.
Then arise an
unexpected demand
for the fresh
doughnuts.
 A hole was made in

the building wall and
doughnuts were sold
directly to the
customers.
MECHANIZED PROCESS
 1950s, doughnut
making process was
mechanized.
Initially Phased out

hand cutting of
doughnuts and later
the entire process was
mechanized.
GREEN ROOF AND “MARCHING KS” LOGO
In 1960s, the brand

began to be recognized
by its Green roof and
“marching Ks” logo
ADDITION OF COFFEE HOUSE TO ITS STORES
In 1960s, the company

added coffee house to its
stores.
The automatic doughnut
cutter was also replaced
by a new machine which
exerts air pressure on to
the moving proof box
trays.
This process so right till
early 2000s.
SOME FACTS……
In August 1973, Rudolph died suddenly.
After sometime it was taken over by Beatrice Foods Company in 1976.
Alteration in the recipe.
Soon the company was sold.
In 1982, Joseph McAleer acquired the company in $24 million.
Reverted the original formula and the traditional logo.
Mid 80s, McAleer retired and his son took over from him n took
Livengood as his partner.
Continue….
1997, some artifacts were displayed in Smithsonian

Institute’s National Museum of American History.
December 2001, Co. opened its first store outside US, in

Ontario, Canada.
By the end of 2002, Co. had 285 stores in Us and Canada.
2003, opened first store in Australia and looking locations

for further expansion.
ANSWERS TO THE QUESTIONS
AT THE END OF THE CASE
STUDY.
First question was about the expansion plan and viability of its products in foreign market.
Innovative policies for expansion
Retailed its doughnuts in number of retail stores n
supermarkets in packaged form.
Had not done any product specific research.
Decided to target those based on popularity of American
products.
International franchise stores sell doughnuts and
complementary products almost exclusively.
As of January 31, 2010, there were 358 international
franchise stores in 18 countries, including 95 factory
stores.
Q2. ABOUT THE ADVERTISING BUDGET AND
MARKETING STRATEGIES.
 Lack of formal advertising did not hamper KK’s brand popularity.
 Their marketing strategies were different.
 The Co. had unique ways of getting media coverage…….

e.g.
 sending free doughnuts to newspaper offices and radio and
television stations.
 Marketing through e-mail messages or pamphlets to customers in
the area.
 Holding sampling events to allow customers to taste doughnuts.
 Sometimes a mobile store was set in the place where the new store
was to come up.
MARKETING BOTTLENECKS THE
COMPANY MAY FACE
Weak menu.
Bad relation with franchise.
Franchisees close stores.

Q3. ABOUT DISTINGUISHED OPERATIONAL
STRATEGIES.
 Doughnut theaters
 The Co’s involvement in fund
raising.
 All stores and franchisees
used the same recipe.
 The Co. differentiated itself
by combining
 quality ingredients.
 a vertically integrated
production process.
 Unique retailing experience.
Q4.ABOUT THE NATURE OF COMPETITION
FACED AND ITS POSITIONING.
COMPETITION
Size and scale of Dunkin Donuts.
As Krispy Kreme started expanding northwards,

Dunkin Donuts started capturing southern markets.
Dunkin Doughnuts had 5500 stored world wide

and KK had 285 stores in US and Canada.
POSITIONING
 Krispy Kreme realized the demand for coffee and moved

to fill the gaps in its service.
 Appointed specialists in that side of business.
 Built a coffee roasting factory.
 Also diversified into other breakfast and snack food like

bagels , sandwiches etc. directly targeting the Dunkin’
Donuts customers.
CURRENT STATUS OF THE COMPANY
 Net income was $4.5 million compared to $1.9 million, in

the first quarter last year.
As of January 31, 2010, there were 141 domestic franchise

stores in 29 states, including 104 factory
The Company has a total of 616 Krispy Kreme stores system

wide, a net increase of 34 locations since January 31, 2010.
As of May 2, 2010, there were 83 Company stores and 533

franchise locations.
REVENUES
OTHER COMPETITORS
Tim Hortons (THI) - largest fast food restaurant chain in
Canada (and the fourth-largest in all of North America)
Starbucks (SBUX) is an international coffeehouse that has

built one of the world's most powerful and recognizable brands
McDonald's (MCD) is the world's largest fast food restaurant

chain with over 32,000 locations in over 110 countries.
Wendy's International (WEN) is one of the world's largest

restaurant operating and franchising companies, with over 300
franchises abroad.
THANKS !
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How did Krispy Kreme start and expand its business?

How did Krispy Kreme start and expand its business?

What were some of Krispy Kreme's operational strategies?

What were some of Krispy Kreme's operational strategies?

KRISPY KREME DOUGHNUTS

Started in 1933 by Ishmael Armstrong, a farmer and a

Shortly, Vernon Carver Rudolph, Ishmael’s nephew,

Some stores were opened in Charleston and Atlanta by Rudolph’s

Same recipe but decentralized making process.

Wholesale operation and doughnuts were mainly supplied to local

Summer 1937, Rudolph left Nashville and moved to Winston-Salem in

The Pontiac car was remolded as a delivery

 July 13 1937, first

 A hole was made in

Initially Phased out

In 1960s, the brand

In 1960s, the company

After sometime it was taken over by Beatrice Foods Company in 1976.

Alteration in the recipe.

Soon the company was sold.

In 1982, Joseph McAleer acquired the company in $24 million.

Reverted the original formula and the traditional logo.

1997, some artifacts were displayed in Smithsonian

December 2001, Co. opened its first store outside US, in

2003, opened first store in Australia and looking locations

 Their marketing strategies were different.

 The Co. had unique ways of getting media coverage…….

Bad relation with franchise.

Franchisees close stores.

As Krispy Kreme started expanding northwards,

Dunkin Doughnuts had 5500 stored world wide

 Krispy Kreme realized the demand for coffee and moved

 Appointed specialists in that side of business.

 Built a coffee roasting factory.

 Also diversified into other breakfast and snack food like

 Net income was $4.5 million compared to $1.9 million, in

As of January 31, 2010, there were 141 domestic franchise

The Company has a total of 616 Krispy Kreme stores system

As of May 2, 2010, there were 83 Company stores and 533

Starbucks (SBUX) is an international coffeehouse that has

McDonald's (MCD) is the world's largest fast food restaurant

Wendy's International (WEN) is one of the world's largest

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