Krispy Kreme

Industry:
Krispy Kreme is a company that primarily sells doughnuts and other products that
complement donuts but not cakes for dine-in but more so for take-out
Major Competitors: Dunkin Donuts
Minor Competitors: Sub-way (sandwich company) 4 out of 5 level of competitiveness
Burger
Barriers of entry: easy-access
Suppliers: easy
Buyers: buyers have a lot of power
Regulation: not intense
Strengths: allow the customer to see the production
Vertical integration
Availability of the product
Signature product honey-glazed product
Weaknesses: Smaller geographical stores than Dunkin Donuts in the US
Poor location of franchise stores
Lack of advertisements
Opportunities: Menu Expansion to related-products
Delivery service

World-wide expansion
Threats:

Increase in Health-conscious trends

Competition

THIS IS AN ETHICAL CASE

Aggressive accounting that inflated revenues

Point of View is important (i.e., investor who

owns share, potential investors)
Point of View: Investor who owns share in KK
What do I do with my 1000 shares in Krispy Kreme?
Alternatives:
1. Buy more shares
Justification: temporary downside; earnings potential
2. Holding shares
Justification: wait for another disclosure/adjustment in accounting error
3. Selling shares
Justification: potential further decline in share prices; other accounting
anomalies;
Best Alternative:
SELL