Krispy Kreme Doughnuts Inc.

Research papers on Krispy Kreme Doughnuts often focus on one aspect of their business operations. Examining the competitors and Krispy Kreme's competitive advantages is one way organizing a business or MBA level report on the company. Paper Masters custom writes all our projects so we can give you exactly what you need.

Krispy Kreme Doughnuts Inc. is a specialty retailer of doughnuts that are made in franchised and company owned stores. The firm operates 218 stores in the United States and Canada, 75 of which are company owned. The firm also sells pastries, fruit pies and other types of foods. In some locations in the south, the firm's stores have achieved icon status due to their long association with the economy, which provides a strong competitive edge in these geographic locations. The current structure of the firm is the result of a merger with the existing firm Krispy Kreme Doughnut Corporation that took place in 1999. In 2000, the firm conducted a closed public offering of its common stock, raising additional capital for expansion.

Krispy Kreme's Competitors

Krispy Kreme's competitive environment is shaped by the following:

1. Rivalry among existing firms
2. The threat of new entrants
3. The threat of substitute products or services, with bargaining power of suppliers and buyers exerting only a limited effect.

There is intense rivalry in the doughnut business with existing chain operations, particularly from Dunkin Doughnuts and to some degree coffee bar chains such as Starbucks that serve doughnuts and pastries as a value added service. Although there are significant financial barriers to entrants that wish to establish national chains, there are only weak barriers to entry in a local context. In effect, the firm has to face competition from existing national firms as well as smaller doughnut shops that operate only one or a few retail outlets in the locations chosen for Krispy Kreme operations. In addition, there is a significant threat from substitute products that are similar to the doughnuts and pastries served by the firm, with both taste and convenience as the main factors underlying the purchase decision. Because supplies are fungible and readily available from a number of suppliers, there is relatively little supplier bargaining power. Because price is not generally a significant factor in the buying decision due to the low cost of doughnuts and the other products sold by the firm, buyer bargaining power is relatively low.