Environmental Analysis of Krispy Kreme Corporation

Krispy Kreme Corporation is among the most popular doughnut producers and in the southern states of United States of America. Besides operating in USA, Krispy Kreme Corporation has various stores in the other regions like Australia, Canada and the Asian Region.

Having its operations at both local and international markets, environmental analysis of Krispy Kreme confirms that the corporation is terribly struggling with its stores. Following the recently experienced financial crisis, Krispy Kreme Corporation experienced a significant decline in its profitability due to contracted cash flows in the markets.

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The macro-analysis of the food industry has revealed how consumer demand for confectionaries like doughnuts and other products produced by Krispy Kreme Corporation has significantly declined over the last three years.

Though high population in USA and the other regions seems to provide potential market opportunities for Krispy Kreme’s wide variety of baked food products; cultural disparities within the baking practices have been a major problem (Huntley, 2008, p.59). However, advancement in infrastructure like transport and communication systems in USA have enhanced quick distribution of baked food products while they are still fresh.

With world becoming integrated in trade and business affairs, the tendency of Krispy Kreme Corporation to extend its operations in other regions of the world has contributed to its success.

For instance, the formation of trade blocs by like NAFTA among others has enabled Krispy Kreme Corporation to operate on low tariff in its various branches in USA, Australia and North America regions among others. Further, the currently revolutionized Australian society towards digitization has impacted positively on the performance of Krispy Kreme.

Precisely, the introduction of ‘hot doughnut technology’ and ‘MyKrispyKreme’ which connects the franchise management and Krispy Kreme retailers has been a great achievement for the company. As noted by Perreault, Cannon & McCarthy (2009, p.7), today’s organizations which seem to embrace the revolutionizing societal trends are considered as having the potential to perform better in the long-run.

Legal issues like competition law, Foreign Corrupt Practices Act of 1977, tax regimes and licensing procedures in both USA and the world at large have as well impacted a lot on Krispy Kreme. For instance, the legal facet of corrupt deals between Krispy Kreme with top government officials during franchise processes is largely inhibited by the Foreign Corrupt Practices Act. In addition, the competition law restricts any corporation to merge with another with an aim of dominating the markets (Conklin & Cadieux, 2008, p.26).

All these legal procedures have been found to restrict all the operations carried out by Krispy Kreme in all its operational regions. In addition, commercial litigation issues like franchise and employment matters in USA have also been found to control the operations done by Krispy Kreme largely. Consumer protection laws in USA have as well been found to restrict organizational operations in various ways like pricing of products among others for organizations like Krispy Kreme.

It has also been observed that, organizations which play their social responsibilities and ethical operations acquire competitive advantage of being trusted and treasured by customers (Bateman & Snell, 2007, p.6). Besides legal obligations like paying tax and observing all other legal legitimate requirements, Krispy Kreme has been involved in donating some food materials to orphanages in various regions where it operates.

As a result, the food products baked and sold by Krispy Kreme have been highly demanded in both international and national markets. With the food markets becoming highly competitive, Krispy Kreme is compelled to play its social responsibility role appropriately in order to retain its competitiveness in the long-run.

References

Bateman, T. & Snell, S. (2007). Management: Leading & collaborating in a competitive world. New York. McGraw-Hill.

Conklin, D. & Cadieux, D. (2008). The 2007-2008 financial crisis: Causes, impacts and the need for new regulations. New York: Richard Ivey School of Business Foundation.

Huntley, R. (2008). Eating between the lines: Food & equality in USA. New Jersey: McGraw-Hill Publishers.

Perreault, W., Cannon, J. & McCarthy, E. (2009). Basic marketing: A marketing strategy planning approach (17th ed.). New York, NY: McGraw Hill.