Contingency Plans for Krispy Kreme Doughnuts

A contingency plan is defined as the designated plan aimed at projecting into the future account

of an incident (Academic Papers on Porter’s Strategy, n.d.). In business terms, a contingency

plan is usually defined as the laid-down procedures aimed at keeping the business afloat or

rapidly increasing the company's market share or operations [ CITATION Mar19 \l 1033 ]. For the

Krispy Kreme Doughnut. The two contingency plans chosen are: Plans if a significant

competitor withdraws from a particular market as intelligence reports indicate and plan to be

undertaken if sales objectives are not reached to avoid profit losses and

When a considerable business competitor withdraws from business, the first point to consider is

the reason for the withdrawal. The consideration is done to arrive at a suitable contingency plan.

Since the significant competitor used to operate a similar business, this means there would be a

market gap to be filled. Now the strategies towards the suitable contingency plan are to arrive at

how to occupy the market gap left by the major competitor.

Gaining the customers previously acquired by the exiting competitor requires excellent product

quality. The quality can be improved by employing high qualified bakers who are capable of

delivering the quality needed. The second step is to increasing production to meet the growing

demand. Increasing production may be done by having additional employees at the restaurant,

buying larger baking equipment, and acquiring other transport means for deliveries.

Another plan is to do fact-finding on why the competitor withdrew from the business. The fact-

finding is usually done through the strength, weakness, opportunity, and threat analysis (SWOT)

[ CITATION Dav17 \l 1033 ]. The strength analysis looks at what the competitor used to gain a

market share and implement it. The weakness analysis looks at what is the weakness of the
business compared to the exiting competitor and working to eliminate the shortcomings. The

opportunity involves analyzing the different ways the company can be modeled while checking

at new market ventures.

The second contingency plan is planning to undertake when the sales objective is not reached to

avoid running into losses. Lack of reaching the profit objective can result in the closure of

business to its uneconomical running. As such, it is achieving the profit objective that is key in

ensuring the continual running of the company. One of the main contingency plans, when the

profit margin is not reached, is marketing. Different marketing strategies may be applied. There

should be an introduction to promotional sales to increase sales volumes. Such promotions may

include physiological marketing through slightly lowering of prices, giving out freebies to new

customers as well as the introduction of loyalty vouchers[ CITATION Kot05 \l 1033 ].

Another method in which losses may be avoided on occasion where profit objective is not

realized is cutting down the number of employees in the business. This strategy is harsh and

should only be used in an extreme scenario where the company is risking closure. Another mild

measure may include slashing the salaries of the employees by a certain percentage. In this

manner, there would be profit maximization through cost reduction.

In conclusion, it is essential to have plans in terms of business operation on how to tackle the

competitors and how to reach the profit objectives. There should be emergency funds to revamp

the business should a leading competitor drop to close in the market. On the other hand, having a

well-defined break-even analysis helps make sure the company does not run out of capital due to

low-profit realization.