Global Market Analysis: Krispy Kreme in Hong Kong

Essay by robdado2University, Master'sA+, March 2006

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Company History

Krispy 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 local grocer to lend him the ingredients and repaid the loan as doughnuts were sold. The partners began selling to grocery retailers using the Pontiac as a delivery wagon. As requests for "fresh baked" donuts increased, they cut a hole in the building to sell to passer byes. By 1950, Krispy Kreme had 29 shops in 12 states. By 1960, they standardized all Krispy Kreme shops with the green roof, red glazed exterior, inside viewing window and overhead conveyor creating the Krispy Kreme trademark look.

In 1976, Beatrice Foods purchased Krispy Kreme and made a series of changes. Customers reacted negatively and sales declined. In 1982, group of franchisees bought the company in a $22 million leverage buy-out and reinstated the original recipe and signature look.

Market Segment

Key points in defining the market segment for Krispy Kreme doughnuts are providing a treat that can be for a wide array for people in all walks of life, young and old, rich or poor. With rapid growth, more locations will become available in the near future. Krispy Kreme doughnuts are a convenience breakfast food, snack or dessert. Krispy Kreme has been successfully distributed in many area of the United States.

Future Opportunities

The upside potential for Krispy Kreme doughnuts over the next five years:

1. Increase growth rate with opening of additional locations.

2. Increase sales revenue...