Case 4: Krispy Kreme Doughnuts, Inc. “Success is not forever and failure isn't fatal.” (Don Shula) The new millennium was a new era for Krispy Kreme Doughnuts. When it became public the shares were selling for 62 times earnings, and in 2003 fortune magazine call it “the hottest brand in America”. But in 2004 the company entered to a difficult phase when the share price decrease accompanied by several accounting reveals. The case six prepared by Sean Carr preset us with financial information about the company, and the point of this paper is to analyze it. Krispy Kreme Doughnuts, Inc., began as a family business in 1937 when Vernon Rudolph acquired a doughnut secret recipe from a French chef in New Orleans.
Until mid of 2004, the company faced a lot of problems which included declining in sales, falling revenues, failing franchisees, closing stores, having problems with the U.S. Securities and Exchange Commission over false and misleading financial statement, and law suits. These leaded KKD to hold back the expansion plans that had been projected. In late 2005, the stock traded around $6 per share, down almost 90% from its all-time high of close to $50 per share. The new strategy had been executed which focused more on a specialty retail strategy than a wholesale bakery strategy, promoted sales at company’s own retail stores and used the ‘hot doughnut experience’ as marketing tactic with customers . An additional strategy is to expand the number of outlets nationally using both company owned stores and area franchisees.
The company initially focused on Asia and central Europe. Most recently it has made its entry into the US market. In 1997 Tesco first decided to diversify and according to the company itself this was the basis of its recent success. As a result of this strategy several new businesses have been created by Tesco for the last 12 years and most of these businesses are profitable and competitive (Tesco plc, n.d.). Tesco has developed its strategies which are primarily focusing on five important factors, 1) its core UK business, 2) community, 3) non-food, 4) retailing services and 5) international market.
Running head: COSTING METHODS PAPER Costing Methods Paper Jane Doe University of Phoenix Accounting ACC/561 Barbara Kantor November 27, 2012 Costing Methods Paper Super Bakery, Inc. was founded by Franco Harris, formerly of the Pittsburgh Steelers, in 1990. The corporation supplies healthy, vitamin enriched doughnuts and other baked goods, out of an initial desire to make a difference in the institutional food market by targeting school systems nationwide (Kimmel, 2009). While, the company experiences positive growth since its inception, Super Bakery is at the point where it needs to explore a costing system that can establish a more accurate product costing method that can, at minimum, improve control of overhead costs. What strategies did the management of Super Bakery, Inc. use? Formed as a virtual corporation, Super Bakery designed a business model that performs key strategic planning and business functions in-house while outsourcing all manufacturing components as a cost reductions strategy.
Against a background of increasing health costs, the government is calling upon companies in the food industry to tackle the issue and take responsibility. Western chocolate makers hungry for growth markets are banking on that to change. In the past five years the value of chocolate confectionery sales in China has nearly doubled, to $813.1 million, while sales in India have increased 64%, to
Taking its niche retailing to a new level, Forever 21 has embarked on an aggressive growth plan. In the past year alone, the company opened several new U.S. and international flagship stores; acquired Gadzooks, a national retail chain with more than 240 locations and introduced Love 21, a line of accessories. As these investments take hold, the company expected its sales to grow from $600 million in 2004 to close to $1 billion in 2005. The company’s business model is fast fashion, that is, to quickly imitate
The $50 million project, although would double the company’s debt, but would also greatly increase its customer concentration. Q2. HPL had not initiated a project of such ($50 million) magnitude in over a decade. The expansion of the business will have a significant impact in the company. We can consider three metrics to analyze it: long-term debt, revenue and book value.
Perceived Value Chain…………………………………………….17 Introduction Founded by Vernon Rudolph in 1937 Krispy Kreme doughnuts began producing doughnuts with the intention to sell them to grocery stores. Today, there are over 500 Krispy Kreme stores in 21 international markets. Since becoming a global firm there has been several structural changes which led to a massive expansion in the mid 1990’s. KKD began to realise that they had over expanded when accounting practices that were questionable were identified and caused a plummet in their stock price. The changing needs of consumers, who are looking for healthier products, lower priced food and convenient store locations has become an increasing issue that competitors have picked up on.
However the differentiation strategy may deter lower income consumers and possibility of imitation could be some of the down side of the strategy. 2.0 Brief overview of the background information (strategic context) of the organization BreadTalk Group Limited started out as a local bakery chain in the year 2000 by the founder, George Quek. In a span of a decade, it has successfully expanded its operations and now has a network of more than 400 boutique bakeries, 40 food atriums and restaurants across 16 countries (Loh 2011).The bakery segment remains the core revenue driver of the group (OCBC Research 2011).
Their work paid off, when by the end of 1914, the company’s gross sales were $300,000. That was when they decided to expand their business and the plans they took includes built machines, hired employees as well as expanding their routes. Chocolate Juniors were the first new product developed. After that, they invested on electric ovens to produce cupcakes in large volume. In year 1918, Tastykake’s sales reached $1 million and by 1930, with the introduction of Butterscotch Krimpets and the expansion to five buildings, Tastykake was selling $6 million worth of these new snack cakes.