There is abundant opportunity in the western U.S. that KKD has yet to address. Each aspect of the strategy plan is now addressed by functional area:
Over the next three years, KKD needs to first concentrate on competing more effectively in those regional markets where Dunkin' Donuts to this point has dominated the sale of donuts and related food and beverage items. This must begin with a build-out of the 22 Montana Mills stores in states where Dunkin' Donuts has the majority of market share, followed by selective expansion in western states including Arizona, Colorado, California, Nevada and Washington. The use of joint ventures, co-branding of retail locations, and private labeling needs to be aggressively used to penetrate the new markets in western states which have to date been unaddressed.
In terms of global market development, KKD needs to consider investments in Australia, Canada and Great Britain as opportunities to look for how to align their unique service and food business model to cultures comparable to the U.S. And still retain profitability. As KKD executes the best in the U.S., the company needs to expand domestically as much as possible before making further international investments.
Information Systems and e-Commerce
KKD has the beginnings of an Intranet for managing its many franchisees, dealers and retail locations, yet today this cannot be used for managing the supply chain for each specific location very well. In addition there isn't that much available in terms of coordinating marketing strategies using this Intranet. The information systems over the next three years need to concentrate on promoting and ensuring consistent execution of marketing strategies and pricing, and the consistent use of co-operative advertising as well. Over the next three years the Intranet needs to include many of the features needed by franchisees and dealer locations to be more competitive on special in-store promotions as well. Like any strong information systems strategy, these changes over the next three years must be based on solid marketing strategies first. On the issue of e-commerce, today KKD...
This is an area that KKD needs to concentrate on heavily in the next three years, giving each retail location the option of taking Internet-based orders for delivery in their specific area, this could become a major competitive advantage in those states where Dunkin' Donuts is today, as many of these competitors' locations do not support this service. Investing in online ordering at the retail level must be defined, executed and operational within three years or less for KKD to be successful in existing markets, those northeastern U.S. markets and the western states they need to expand into.
As KKD moves into multiple distribution agreements and arrangements, and looks to increase its share in the northeastern U.S., the company must continually look to the quality of their donut making and baking process as their core differentiator. Without consistent product quality, KKD will not survive. The concentration on quality management throughout the entire mixing and baking process is critical for their success.
As a result of how critical product quality is, KKD needs to start auditing its own processes and in effect create its own auditing division to make sure all aspects of donut production and delivery are consistently executed to the highest standards. Over the next three years KKD needs to make each of the production processes of their donuts abundantly clear to existing and new franchisees, retail locations, and joint venture partners so they can retain their uniqueness and differentiation.
Taken together these factors, when executed over three years, will give KKD the ability to not only expand into entirely new markets in the western U.S. where their main competitor, Dunkin' Donuts, does not have significant market share today, but will also make them more able to challenge Dunkin' Donuts in the northeastern U.S. As well. The concentration on the northeastern U.S. through the Montana Mills stores, the development of more effective information systems and e-commerce plans including online ordering, and the development of more comprehensive quality management programs can be combined over three years to give KKD strong competitive advantage against Dunkin' Donuts.
In turn, the Return on Equity, which is calculated my multiplying the Du Pont variables listed above, will most definitely be altered. The potential for return is, naturally, one of the most relevant factors for investors in determining if a stock is a worthy investment, and if so, how much of it to buy. A "downward" change in the ROE will most likely have a detrimental effect on stockholders
The organization has been able to effectively use their large buying volume to lower the cost of supplies and reduce supplier power even further. Bargaining Power of Buyers: Krispy Kreme is highly vulnerable to the power of buyers, as there are a variety of substitutes and competition in the industry is intense. However, because the industry is moderately fragmented, Krispy Kreme finds power in their strong brand name, which attracts and retains
That is the beauty of the successful and rising platform established through successful investments; it all becomes quite circular. Then, by reinvesting and refinancing earnings, everything becomes stronger. Just as easily, however, this corporation could have been buried. 1. What is a franchising arrangement? And how is this reflective of business expansion? Moreover, how does this support business growth? From HighBeam Business, these key-terms set the stage from here on out: MLA: