Brian Schafer
Professor Larry Howard
Business 120
October 25, 2004
Throughout history, people have had the urge to increase personal wealth by
conscious thinking, careful planning, and organized analysis. The idea of SWOT analysis
was devolved to better a company in all aspects of its service or product production.
SWOT analysis uses basic principles to focus on the strengths, weaknesses, opportunities,
and threats of a particular company. The SWOT analysis is important in developing a
company’s full potential and to ensure the company is efficient with use of its resources.
The SWOT analysis is a basic and very straightforward model that allows a
person to examine a company’s production. SWOT also has the possibilities, if used
correctly, to attempt to understand where a particular company might be heading in the
near future. This analysis takes measure of the company’s strengths, weaknesses,
opportunities, and threats. This provides a company with a foundation for future planning
to better the company.
SWOT analysis was first researched at Stanford Research Institute starting in
1960 and continuing all the way to the early 70’s. People had a desire to find out why
corporate planning failed, this is what triggered the initial motivation for researching the
concept as we now know as SWOT Analysis.
Researchers who initially discovered the simplicity of SWOT, thought of a very
easy acronym. SWOT works by focusing on the strengths, weaknesses, opportunities, and
threats of a company.
The first component of SWOT is the aspect of strengths of a particular company.
Strengths of a company can be measured by any internal factor that puts this particular
company on another level compared to its competitors. The strengths are measured by
looking at the company’s advantages it has over competitors, how efficient the company
is at producing its product, and how easy resources are obtained that betters the company.
For example a strength is a business that has a good geographical location such as being
located on a busy street or having enough parking spaces for its customers. Another
example is a company having a good customer service reputation. While looking at
advantages of a company, one can look at both a personal point of view, and also a point
of view from the people one deals with.
The second component of SWOT is the aspect of weaknesses of the company.
Similar to the aspect of strengths, weaknesses exams issues internal to the particular
company and production. While thinking of weaknesses of a company, people think of
what aspects of this company do they avoid, or do poorly, and also what can be
improved. For example a weakness is a business that has a poor location, and it provides
a product that is not necessarily user friendly. Another aspect one can exam while
discovering the weaknesses of a company is looking at the competition and seeing what
the competitor does better than this operation or this particular company.
The third component of SWOT is the aspect of opportunities that the company
has. Opportunities of a company can be measured by any external factors that focus on
the future. Some questions one might ask while investigating the opportunity section are:
“what are the good opportunities that you can see for the future?” and “What beneficial
trends appear visible for the future?” Changes in technology, markets, and government
regulations are some aspects of possible opportunities. An example of opportunities is
obtaining a new form of technology that produces that particular product more efficiently
and for a cheaper price. Other changes such as social patterns, change in consumer tastes,
and population are important aspects to focus on. An example of this aspect of
opportunity is if for example a trade barrier is removed, trade becomes more efficient.
The last component of SWOT is the aspect of threats to a company. Similar to the
opportunities component, threats are another external issue that faces a particular
company. Threats focus on the obstacles that have a negative affect on a particular
business. Such examples are increased trade barriers, and a possible federal tax on your
finished product. A change in technology is another important example of what can
threaten a company. A competitor might research more efficient ways of completing its
products which is a threat to your business. Another example of a threat is poor finical
planning and large spending.
SWOT Analysis is something that all companies should require since it is a form
of analysis that only benefits a company. If SWOT analysis is used correctly, the
company will move to a more positive situation in a very competitive market. The most
important concept about SWOT is that it only has a positive affect, and the entire process
of SWOT is relatively free or very cheap in price. Anyone can manage a company and
analyze a company’s performance when using the technique of SWOT analysis. SWOT
is a very basic and easy to follow process containing four easy steps that employ focus
skills and internal and external factors that affect one’s company.
Krispy Kreme Doughnuts is well known to many people living in North America.
Krispy Kreme was founded in the year of 1937 by a ledge in the doughnut industry,
Vermon Rudolph. Vermon bought a secrete yeast raised doughnut recipe from a French
chef from New York. Vermon Rudolph rented a small building originally located in
North Carolina. Rudolph’s first day of sales started on July 13, 1937 when he sold his
doughnuts to the local grocery stores. Vermon chose to cut a hole in the wall and sell
customers warm fresh doughnuts after his customers began stopping by his “doughnut
factory” and asking if they could purchase doughnuts warmer. This actual “hole in the
wall” operation soon turned into a multimillion dollar company that has spread nation
wide in a very small amount of time, which this aspect of the company makes Krispy
Kreme Doughnuts remarkable.
Krispy Kreme Doughnuts has a very rapid expansion strategy. This makes Krispy
Kreme Doughnuts very quick at adapting to the competitive market. Krispy Kreme’s
franchises have taken over much of the recent expansion. Currently, as of February, 357
factory stores are in operation, and 338 of those stores are located in the United States.
Krispy Kreme Doughnuts has focused on building a vertically integrated value chain that
includes many aspects of the market that benefits the company. Most recently, Krispy
Kreme Doughnuts has been focusing on expanding on the more international level.
Krispy Kreme Doughnuts has many admirable strengths that sets it apart from
competitors. Krispy Kreme Doughnuts has a very recognizable name. Many people know
what a Krispy Kreme Doughnut is, and more importantly, many people can remember
this because of the unique way Krispy Kreme spells the first two words in the title of the
company. Krispy Kreme Doughnuts has a very efficient way of producing mass
quantities of doughnuts. It is reported that the technology can produce 270 dozen
doughnuts in an hour due to the advances in technology. Not only can Krispy Kreme
Doughnuts product large quantities of doughnuts, but the doughnuts are all uniform. For
example, a glazed Krispy Kreme Doughnut is the same if purchased in a San Francisco
California doughnut factory, or if purchased in a factory in Rocky Mount, North
Carolina. Customers can recognize the doughnut nation wide. Krispy Kreme Doughnuts
also exercises a very positive attitude towards its customers which provides a good
customer base, and good customer satisfaction. Employers at Krispy Kreme strive to have
good customer service, and treat customers with great respect, and this is a strength that
separates Krispy Kreme from their competitors.
Krispy Kreme, on the contrary to its strengths, has many weaknesses to its
company and operation. It is reported that Krispy Kreme has poor management within
each individual store. Reports have shown that managers place blame elsewhere which
causes confusion and problems on the production level. In a more strategic setting,
Krispy Kreme Doughnuts chooses to put money back into the businesses with low net
margins rather than growing the company and expanding the company’s horizons. One
aspect of Krispy Kreme’s operation that sets it apart from its competitors is Krispy
Kreme’s lack of advertising. Krispy Kreme feels that advertisement is a waste of
resources, and the corporation feels that Krispy Kreme can focus on creating a better
doughnut rather than playing the risky game of advertisement.
Krispy Kreme Doughnuts have a bad reputation when it comes to the nutritional
values. Many health consultants have specifically stated to stay away from Krispy Kreme
Doughnuts. Possible customers with high blood pressure, high cholesterol, and people
trying to lose weight are turned off from eating a Krispy Kreme Doughnut.
Krispy Kreme Doughnuts are available in many offside locations, such as gas
stations, grocery stores, and supermarkets. This concept of spreading the product to wider
locations is a very good idea, yet the Krispy Kreme Company loses quality control and
the experience when shipping the doughnuts out to external locations. This idea of
sending the doughnuts out to such various locations can act as a positive aspect of the
company because more doughnuts are sold. On the other hand, quality control is lost, and
the label on the doughnut box is still present to the customers. So quite possibility, the
reputation of Krispy Kreme might get distorted as the product is shipped to more outskirt
locations.
Krispy Kreme Doughnuts has many possible opportunities that are approaching in
the near future. The recent fad that involves losing weight and the Atkins diet may force
Krispy Kreme to expand products and introduce a different line of health drinks. Krispy
Kreme also has the possibility of creating store bought household items, such as ice
cream, cereal bars, breakfast treats, snacks, and icing.
The Krispy Kreme Doughnut Company has the ability to move to a larger
international level. Currently Krispy Kreme is located in Mexico, Canada, United States,
and the UK. Krispy Kreme has not devolved a plan to move its product to Asia or Africa.
This opportunity can act as a very profitable move if the society of those various
countries accepts the Krispy Kreme Doughnut.
Many common threats face Krispy Kreme Doughnut Company. The new fag with
the Adkins diet has triggered a downfall in grown and profit within the last couple of
years. Many health experts have concluded that doughnuts can not help but only hinder
the progress on a diet.
Krispy Kreme Doughnut Company has had a recent push to create a new line of
doughnuts that range from jelly filled to chocolate covered with marshmallow in the
middle. Many people are afraid to try new products and would like to stay with the
original great tasting glazed doughnut.
Lastly, The Krispy Kreme Company is now longer accepting applications for
opening a franchise in the United States. This decision on freezing the application process
holds the company size as it is, and expects sales to continue to rise.