International Operations Besides the stores that Krispy Kreme operate in the United States and Canada, there are also locations in the United Kingdom, Australia, Lebanon, Turkey, Dominican Republic, Kuwait, Mexico, Puerto Rico, South Korea, Malaysia, Thailand, Indonesia, the Philippines, Japan, China, the United Arab Emirates, Qatar, Saudi Arabia, Bahrain,Hong Kong (2006–2008), andEthiopia.
II. Environmental Analysis A. External Environment Analysis
A.1 General Environment
As a company with worldwide presence, the world population is estimated to increase yearly by 0.8% or around 80 million. This opportunity will propel the growth of the company. Also, the international expansion strategy through franchising to known local company give the company a localized support.
As the diet-preference of customers shifting significantly to low-curb or customers becoming diet-conscious.
Political/Legal Environment
The international expansion of the company through franchising to local company will give a smoother political and legal environment. Third world and developing countries opened for investments through easing the requirements and giving fiscal incentives to attract multi-national companies.
Changing legislations (e.g. Tax laws) and political powers is a threat to the company which cast shadows to the long-term presence of international companies.
Technological Environment
The surge of technology making the world flat. Technology gives opportunity for publicity and expansion to environments that are still undevelop for the business market. As customers becoming more dependent to technology, opportunities are high and reaching out the market will be much easier than before.
As consumers becoming more dependent to technology, customers becoming more aware and more conscious to low-card and other products competing with Krespy Kreme.
Economic Environment
Economy of some of the most populated countries like China and India are growing faster than expected which signal investor for better business results.
Better economic environment will be a destination for extreme competition until time the market will be saturated.
A.2 Industry Environment
Opportunities
Threats
Rivalry
As the Krispy Kreme brand is very successful in its unique marget segmet, competitive rivalry will be an opportunity for the market segment to economic growth.
Success of new product concepts that can limit the potential growth of the company.
Price will surely decrease due to rivalry.
Bargaining Power of Consumer
The company's signature graze donut is unique and have its own market position. This unique differentiation of its market will provide a better opportunity for the company and bargaining power of consumer will not be a much problem for its strategy.
Consumers always find lower priced products are more attractive than higher priced products. This consumer attitude will be a threat to the company to attract consumers.
Bargaining Power of Suppliers
The economy of scale as big company will render the bargaining power of suppliers lesser impact to the Company. In effect, due to its economy of scale, the company can get better cost price for its raw materials.
Association for suppliers is a problem to company due to unique increase or decrease in their prices.
New Entrants & Entry Barriers
The Krispy Kreme brand is well establish to its own unique market segment. New entrants will not be a problem as long as the company will continously follow its improvements, innovations and consciousness.
New entrants will surely position their product to be a lower-priced products. This strategy can attract consumers.
Threats from Product Substitution.
As the company have a controlled supply and distirbution chain to establish its quality and cost efficiency. Product substite will be unlikely be success and provide the same price and quality standard.
As the company is operating in the U.S., costs of products are high. Quality can also be achieved with lower costs throuh production in lower cost countries like China and India.
