week 12a Please Please help. Let the doughnut wars begin: Krispy Kreme cooks up
ID: 1130325 • Letter: W
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week 12a
Please Please help.
Let the doughnut wars begin: Krispy Kreme cooks up Canadian comeback. Krispy Kreme Donuts first rolled into Canada in 2001 amid tremendous fanfare, selling $70,000 worth of donuts on its opening day in its Mississauga store on Mavis Road. It eventually had 18 stores in Canada, including one in Kitchener. By 2005, all but six of these stores were closed as discussed in the article Krispy Kreme down to a half-dozen stores in Canada. Currently, there are only three stores in all of Canada. Now, Krispy Kreme plans a major comeback into Canada, aiming to open up to 50 stores in Ontario and Quebec in the next five years as indicated in this article Krispy Kreme plans to open up to 50 stores in Ontario and Quebec in the next five years 1. Explain if the decision to close down most Krispy Kreme locations in 2005 was a short run or long run decision? What were contributing factors to this decision? Was the cost of this decision large or small? 2. Is the decision to re-enter the Canadian market again with a targeted 50 stores a long run or short run decision? Explain. Do you think Krispy-Kreme is likely to succeed this time around? Explain.Explanation / Answer
Answer 1:- Closing down the stores of Krispy Kream was a short run decision as within a period is almost 4 years, the company decided to shut down the stress. If we look at the economic terms, the sort term period is accounted for a time frame of 2-5 years.
Apart from this, the major reason behind closing of the stores would be the losses faced by the company and decline in the demand . The cost of closing almost 2/3rd of the store is going to have a very large impact on the company as a lot of investment on the stores, its infrastructure, operational and starting , training of employees must have incurred. Apart from this, it also had an intangible impact on the company in the form of bad name or bad image of the firm that the company had to shut down many stores.
Answer 2:- Starting the 50 store again in Canada is a long term decision as the company is planning to operate these stores for a long period of time if all the conditions remain as per the expectations. In order to become successful the company need to focus on meeting the customer’s requirements, understanding their needs and to manage the competition effectively. If the firm is able to do all these , it can be a success in Canadian market.
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