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CASE 12 • KRISPY KREME DOUGHNUTS (KKD) — 2009 125

Mission and Vision
The current company philosophy is geared to continuing making the Krispy Kreme dough-
nut the centerpiece of the business and to grow that business internationally. It is strongly
believed that Krispy Kreme has a unique product, a heated fresh doughnut with a distinc-
tive taste. The mission and values statements are as follows:

Vision
• To be the global leader in doughnuts and complementary products while creating
magic moments worldwide.
Values (with acknowledgment to our Founder, Vernon Rudolph)
We Believe . . .
• Consumers are our lifeblood, the center of the doughnut
• There is no substitute for quality in our service to consumers
• Impeccable presentation is critical wherever Krispy Kreme is sold
• We must produce a collaborative team effort that is unexcelled
• We must cast the best possible image in all that we do
• We must never settle for “second best”; we deliver on our commitments
• We must coach our team to ever-better results

Competition
Dunkin’ Donuts
The most formidable KKD competitor is Dunkin’ Donuts. Another doughnut competitor is
Tim Hortons, a Canadian firm that has over 3,400 stores mainly in Canada but more than
500 stores in the United States. Dunkin’ Donuts, which is part of Dunkin’ Brands and is
privately owned, has the largest number of stores in the retail doughnut industry. As of
2008, Dunkin’ Donuts has a total of 6,395 domestic franchisees and 2,440 international
locations in 31 countries. Dunkin’ Donuts is a baked goods coffee shop using the original
coffee blend created by its founder. Sales can be classified in two categories: beverages or
coffee make up 60 percent of sales and baked goods or doughnuts, muffins, and bagels
make up the remaining 40 percent of sales.
Dunkin’ continue to grow sales by expanding their baked goods menu offerings
and through other retail channels for their coffee outside their franchises. Their customer
base is fiercely loyal to the Dunkin’ Donuts brand. They are working people who just
want a cup of coffee and quick bite to eat so they can move on to their work day. Dunkin’
Donuts originated in Massachusetts and seeks to grow in the southern and western states
of the United States and expand into China. In addition to Dunkin’ Donuts and Tim
Hortons as competitors, there are many regional and locally owned doughnut shops and
distributors.

Starbucks
Recently, there has been a growth in coffeehouses such as Starbucks, Caribou Coffee, and
Java City and ice cream shops that all sell doughnuts and other baked items. The most for-
midable of these is Starbucks. This specialty coffee retailer has over 176,000 employees in
9,217 company-operated stores and 7,463 licensed retails stores worldwide. The company
is not only known for its coffee but also branded products sold through multiple retail
channels worldwide. Some of these products include ice cream, coffee liqueur, teas, and
instant coffee. Like Dunkin’ Donuts, Starbucks has strong brand loyalty toward its quality
products. Starbucks, which has less food offerings than Dunkin’ Donuts, looks to capital-
ize on creating a “Starbucks Experience,” which not only provides a comfortable atmos-
phere to enjoy a cup of coffee but also rewards customers for their loyalty through their
Starbucks Rewards program.
Krispy Kreme also sells its doughnuts in major retail outlets. Therefore, it is
also competing with any company selling baked goods in supermarkets, convenience