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Marketing: Kripsy Kreme Company Case Study

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Updated: Nov 29th, 2019

Background

Kripsy Kreme Company (KKD) currently with headquarters in North Carolina was established in 1937. The company specializes in production of baked products such as doughnuts and supplies various retail shops and groceries.

There was great improvement in production processes when the company adopted mechanized and computerized system of making doughnuts. However, it was until early 1990 when the company embraced public domain through its operation system. The move attracted investors who were interested in purchasing franchising rights facilitating penetration within various parts of United States, Canada and other international markets such as Australia.

The company underwent some difficult season in the year 2005, since main franchisee branches in Arizona and New Mexico were declared bankrupt. The same scenario happened to stores within Canada and Far-East including Hong Kong (Anderson). The objective of KKD was to be an excellent business entity with constant and quality supply of doughnuts and other food products.

Recommendation

For the purposes of achieving Earnings before Interest and Tax of over 12%, KKD requires complete overhaul in pricing strategy. Such case requires utilization of penetration pricing method since sale of doughnuts require intensive distribution channels within target markets. Their products should have distinctive taste and produced in various attractive shapes (Burbridge and Coleman). They should as well offer integrated services to for purposes of reaching international market.

Other applications should involve working together as a team across employment settings and sharing roles adequately for the purposes of advocating company’s integrity. At the same time, KKD products should be recognized as efficient and cost effective by the public. The strength of scope is realized in its size and diversity as well as ability to attract and maintain solid relationship with the public (Burbridge and Coleman).

There are various skills required from every employee for the purposes of maintaining safe and healthy work environment. There should be details on advocacy skills and explanation on how KKD employees could utilize their ability to maintain daily routines through education and management skills. There are various challenges and their effects on work environment. However, such challenges as described also present equal opportunities for employees within KKD which ultimately provides enhanced image for the company.

The degree to which such emerging opportunities are utilized within KKD depends on the level of unity exhibited by employees across various departments. The Company should address the fact that level of problems encountered within KKD is basically linked to responsibility at the point of service. In addition there are provisions required in the process of advocating Company’s anticipated future.

This involves development of new ideas within respective work environments which includes realistic changes capable of fulfilling needs of both clients and staff. There should be further elaboration on management’s role in advocating for consumers rights. Conclusively, there should be exploration on strategies required for successful advocacy of employees’ plans. KKD is endowed with responsibility of embracing professionals as pertains to management and distribution procedures.

There is that sense of promoting professional responsibilities resulting into safe practice environments. Various skills involved for execution of excellent services include teaching, mentoring, community service, participation in professional associations as well as peer review. The scope of service provision entails set of skills such as problem solving, means of communication and building relationships at work place.

Basis for recommendation

The company utilizes Global strategy in cases where it experiences strong pressures in line of cost reduction and less pressure in the process of venturing into local markets.

In such a case all strategies KKD applies including making processes are centralized. This strategy emphasizes on nature of monitoring, integration and coordination of activities within local markets. The company can gain competitive advantage through such strategy by automating production and whole delivery processes hence ensuring that products and services are efficiently supplied.

This is ensured through reliable storage services and provision of real-time monitoring processes at all levels. Such strategy ensures improvement in stock and purchases coordination based on order cycles (Johlke and Dale 265-267). However, there is increased costs and expenditure experienced due to movement of goods and services from centralized location to across borders. The challenge arises due to differences in tariff costs which largely depend on country’s legislation rules as well as fluctuations in foreign currencies.

Based on Multi-domestic strategy, KKD should enter into partnership with other related industries for purposes offering integrated services within international market. Gaining competitive advantage in this case depends on effectiveness with which decentralization process is executed. Decentralization on decision making allows for easier modification of products depending on local demand and nature of competition present.

At the same time, the strategy enables the company to utilize local knowledge and capabilities, for the purposes of satisfying needs and taste of local consumers. However, utilizing multi-domestic strategy easily leads to loss on product’s distinctiveness since local adaptation keeps changing over a period of time. Additionally, there is increased spending owing to complexity experienced in coordinating a range of strategies across boundaries (Johlke and Dale 265-267).

Alternatives, Risks, and Assumptions

KKD should also utilize transnational strategy in cases where the company requires expertise for the purposes of overcoming pressures from cost effectiveness as well as local market adaptation. In this case, gaining competitive advantage would require KKD’s supply team to comprise of experienced knowledgeable individuals capable of utilizing their advanced skills in monitoring and coordination processes down the supply chain.

Such applications would ensure significant reduction in costs and improved speed in processing transactions as well as quick response towards consumer needs. Under this strategy, the company allocates assets and capabilities depending on benefits obtained from each specific activity (Starbucks Corporation).

KKD as a service company markets its services depending on customer needs. The company sub-divides the market into segments making it easier to serve both ‘upstream’ and ‘downstream’ customers through its various means of transportation.

Other processes should involve assurance that any approved intervention is rightly administered for purposes of maintaining high healthy standards and protection of consumer interests (Doole). Additionally, process of continuous review provides good basis since it serves as key safety area within different environmental set-ups. This is due to the fact that health pressures have increasingly affected the environment hence created some loopholes which at times provide potential sources of risk to consumers.

One of the disadvantages revolves around maintenance of optimal balance in the process of locating activities within various target markets. This is since all comparative advantages from various activities within value chain should be harmonized for purposes of effective management. Strategic decisions seem complex due to decentralized nature of the systems within the company. Therefore, management should steer creation of acceptable brand within public domain.

Works Cited

Anderson, Richard. “Lessons from Kripsy Kreme.” Journal of Business Case Studies 4.4 (2008): 2-30. Print

Burbridge, John, and Rich Coleman., Krispy Kreme Doughnuts (KKD). 2010. Web.

Doole, Lowe, International Marketing Strategy, 2008. Web..

Johlke, Mark, and Dale Duhan. “Testing Competing Models of Sales Force Communication.” Journal of Personal Selling & Sales Management 21.4 (2000): 265-277. Print.

Starbucks Corporation, Company Profile: Reproduced in Business Source Premier EBSCOhost. 2009. Web.

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