According to Hitt et al (2020) value chain activities are activities or tasks the firm
completes to produce products and then sell, distribute, and service those products in ways that
create value for customers. On the other hand, the support functions are the activities or tasks the
firm completes to support the work being done to produce, sell, distribute, and service the
products the firm is producing (Hitt et al., 2020). Krispy Kreme has various value chain activities
namely: inbound logistics, operations, distribution, marketing and sales. While the support
activities include: Human resource management and technology.
Value Chain Activities
Inbound Logistics
Inbound logistics refers to the arrival of raw materials (Ketchen et al., 2015). Krispy
Kreme depends on suppliers for the different ingredients that make up their fluffy doughnuts.
These ingredients may include flour, sugar, yeast and even the wheat used for their healthy wheat
doughnut. Krispy Kreme has the advantage of a wide range of raw ingredients, the minimal
possibility of suppliers entering the doughnut company, and low switching costs between
vendors, rendering supplier power mostly irrelevant.
Operations
According to Ketchen et al (2015), operations centers on the production process of a
good or service. Krispy Kreme maintains efficient and standardized methods for mixing,
shaping, frying, and glazing doughnuts. Krispy Kreme has also increased its product line to
include healthier options such as whole wheat doughnuts, while eliminating trans fats. In
addition to its doughnut variety, the company provides coffee in order to cater to other consumer
interests. Krispy Kreme also adds seasonal and holiday inspired doughnuts in designs such as
Christmas trees, Easter eggs, and footballs added on a regular basis.
Marketing/Sales
Attracting potential customers and convincing them to make purchases is the domain
of marketing and sales (Ketchen et al., 2015). Krispy Kreme's marketing strategy focuses on
branding and advertising to promote its brand and increase customer interaction. With over 65%
brand recognition, the company communicates with its clients using word of mouth marketing
and social media platforms. With over 4.2 million Facebook fans, it enables direct
communication. Additionally, the company has launched its own smartphone app, "Hot Light,"
to notify users of nearby doughnut availability, hence increasing customer interaction and brand
loyalty. Krispy Kreme also establishes effective sales channels, including retail stores,
franchises, and wholesale partnerships.
Distribution
Krispy Kreme has an effective distribution plan to convey finished doughnuts from its
production facilities to a variety of locations, including retail stores, franchises, and wholesale
customers. Krispy Kreme employs a hub and spoke distribution system, which centralizes
distribution centers (hubs) that act as critical sites for receiving and shipping products. These
hubs are carefully situated to optimize transportation routes and reduce travel time. Additionally,
the corporation uses spokes, which depict the paths that connect the hubs to individual retail
stores and wholesale partners. Krispy Kreme hopes that by streamlining its distribution
operations, it will enhance delivery efficiency and ensure that its freshly produced doughnuts are
available to customers across its network.
Support Functions
Technology
Krispy Kreme strives to preserve the consistency of its famous doughnuts while
streamlining operations and cutting waste through the use of new technology and production
processes. Through the creation of a mobile app, the business has improved its online visibility
and increased consumer engagement. Customers can use this app to conveniently receive
information about doughnuts being ready as well as easily discovering nearby retailers.
Human Resource Management
Krispy Kreme prioritizes employee training to ensure uniformity in doughnut making
procedures, keep high customer service standards, and maintain quality across all its outlets. This
involves paying competitive compensation, offering opportunities for growth, and cultivating a
healthy work atmosphere that emphasizes teamwork and employee well being.
Organization Structure
Krispy Kreme's board consists of nine people with varied backgrounds. Krispy Kreme's
board includes previous finance executives, restaurateurs, and a former SEC Chief Accountant.
Most members are independent, have significant industry experience, and only serve on two
other boards. Board members must be leaders in their disciplines, with experience in
strategy/policy formulation or high level management in complex organizations.
Krispy Kreme Doughnuts operates a hierarchical organizational structure. At the
corporate level, the company has divided its operations into distinct Strategic Business Units
(SBUs), such as company stores, franchises, and KK Supply Chain. Each SBU is in charge of a
specific aspect of the business, such as managing company owned restaurants, directing local
and foreign franchise operations, and managing the supply chain for doughnut mix and
equipment. This hierarchical organizational structure facilitates effective decision making and
resource allocation within each SBU, this allows Krispy Kreme to focus on different strategic
priorities based on the demands of each business segment.
Recommendations and Conclusions
The first recommended strategic option for Krispy Kreme would be product diversification
because of the current market trends toward health conscious eating. In order to response to the
shift in consumers demands, Krispy Kreme is growing its product lineup to include healthier
options including their healthier doughnut that incorporates wheat. This demonstrates Krispy
Kreme capacity to adapt to changing consumer needs. Krispy Kreme can effectively capitalize
on the growing market demand for healthier options by expanding its product line while
maintaining the brand's identity and quality. This marketing approach not only broadens the
clientele, but it also strengthens Krispy Kreme's position as a customer centric brand that
responds to nutritional market trends.
Another recommended strategic option would be to expand its reach and distribution
channels by partnering with well known retailers such as Target and Walmart. Krispy Kreme
may increase brand recognition and attract new customers by cooperating with entertainment
businesses like Disney or Universal Studios on innovative co branded campaigns and events,
therefore solidifying its market leadership position.
In conclusion, Krispy Kreme's corporate environment has experienced both opportunities
and challenges. The company has experienced the challenge of rapid expansion without
appropriate planning which resulted in overextension and lower revenue. There were also
governance challenges, financial mistakes, and franchisee disputes compounded the company's
issues, while leadership turnover and a failure to adapt to new consumer trends made matters
worse. Regardless, Krispy Kreme has shown persistence and strategic thinking. Despite
problems such as inflation, supply chain disruptions, and labor shortages, the company's long
term growth prospects remain strong. Krispy Kreme is committed to learning from its mistakes
and therefore uses the opportunity to innovate, increase their brand identity and retain a good
customer base while growing globally.
Krispy Kreme's future growth strategy should involve strategic relationships, product
diversification, and continued investment in technology and innovation. Krispy Kreme aspires to
become the leader of its market by find solutions for its errors, utilizing opportunities, and
developing corporate social responsibility initiatives. Krispy Kreme is well positioned for long
term success in the competitive food industry, because to its improved organizational structure,
transparent governance systems, and customer centric strategy.
Value Chain Activities
1. Inbound Logistics
 Arrival of raw materials such as flour, sugar, and yeast.
 Advantage of diverse raw ingredients and minimal supplier power.
 An efficient procurement process ensures a steady supply chain.
2. Operations
 Standardized production methods for doughnut making.
 Introduction of healthier options like whole wheat doughnuts.
 Expansion of product line to include seasonal and holiday inspired doughnuts.
3. Marketing/Sales
 Emphasis on branding and advertising to increase customer engagement.
 Utilization of social media platforms and mobile apps for direct communication.
 Establishment of effective sales channels including retail stores and franchises.
4. Distribution
 Implementation of a hub and spoke distribution system.
 Centralized hubs and optimized transportation routes.
 Streamlined distribution operations to enhance delivery efficiency.
Support Functions
1. Technology
 Utilization of new technology and production processes to maintain consistency.
 Introduction of a mobile app for increased online visibility and consumer
engagement.
 Convenient features like notifications for freshly made doughnuts and store
locator.
2. Human Resource Management
 Prioritization of employee training to ensure quality standards.
 Competitive compensation and opportunities for growth.
 Emphasis on teamwork and employee wellbeing to maintain a healthy work
atmosphere.
Organization Structure
Hierarchical Organizational Structure
 Division into Strategic Business Units (SBUs) such as company stores and franchises.
 Each SBU is responsible for specific business aspects like supply chain management.
 Facilitation of effective decision making and resource allocation within each SBU.
Recommendations
1. Product Diversification:
 Introducing healthier options.
 Adapting to health conscious trends.
 Broadening market reach.
 Maintaining brand identity.
2. Expansion through Partnerships:
 Collaborating with retail giants.
 Increasing brand recognition.
 Partnering with entertainment businesses.
 Strengthening market leadership.
Conclusion
 Krispy Kreme has faced challenges like overextension, governance issues, financial
mistakes, and franchise disputes.
 Despite these, it has shown persistence and strategic thinking, focusing on innovation,
brand identity, and global growth.
 Future growth strategies should involve strategic relationships, product diversification,
and continued investment in technology and innovation.