Introduction

Krispy Kreme Doughnuts' beginnings go back to 1933, when Vernon Rudolph, the company
founder, bought a doughnut shop in Paducah, Kentucky. With the purchase, he acquired the
rights to a secret yeast-raised doughnut recipe that would provide the foundation for the
company's hugely successful product. At first, the small business primarily sold and delivered
doughnuts to local grocery stores. Buoyed by early success, Rudolph and his partner went after a
larger market. In 1937, they moved their operations to Nashville, Tennessee, where they opened
a doughnut shop and took on the name Krispy Kreme Doughnuts. The company was officially
established.
Krispy Kreme Doughnuts was the dream of a great entrepreneur, Vernon Carver Rudloph.  
Although, Mr. Rudolph did not invent the doughnut, he definitely improved the process of
making the doughnuts and the taste of the doughnuts, with his secret recipe for yeast-raised
doughnuts.   There are many values, within, this organization that are passed onto employees,
and then to customers.   The company's shared values include: integrity, authenticity, passion,
learning, sharing, and positive expectations.   Krispy Kreme is business to produce a top-notch
doughnut and share it with the world.   Their commitment to being an ethical and social
responsible company shows in all they do.   Krispy Kreme helped to raise some $43 million for
various charities and social causes in their last fiscal year.   They do not only say they are
socially responsible, they prove they are in their day-to-day operations. 

Social Factors

Health Consciousness

Fast food is considered to be a major contributor to obesity and can be found anywhere, even in
the hospitals. For example, Krispy Kreme has a doughnut counter located inside Atlanta’s St.
Joseph’s Hospital. Most fast-food restaurants are revising their menus to include “healthier”
choices. Krispy Kreme continues to look for ways to integrate a complete range of products and
services; perhaps it should develop a new “low-calorie” doughnut selection. KKD also needs to
find new ways to eliminate trans fats in their products.

Population Growth Rate

As of January 28, 2007, there were total of123 Krispy Kreme stores operate internationally,
located in Australia, Canada, Hong Kong, Indonesia, Japan, Kuwait, Mexico, the Philippines,
South Korea and United Kingdom. In fiscal 2007, 60 new international stores were opened, and
5 international stores were closed. KKD is concentrated on development effort primarily in Asia
and the Middle East. These two geographic area offer KKD favorable population demographics,
relatively high levels of consumer sweet goods consumption and the popularity of Western
brands in these markets.
Career Attitudes

During the past two decades, an ever-increasing percentage of U.S food dollars has gone to
eating out. With a greater percentage of Americans working, there has been less time available
for at-home food preparation. Krispy Kreme believes this trend along with growth in two-income
households will increase snack-food consumption and further growth of doughnut sales.

Cultural Different within the Baking Traditions

Doughnuts are traditional favourite pastry of Europeans although they tend to be more loyal to
their local brands of doughnuts, and almost every country has its own name for a doughnut. In
Italy, a doughnut is called fritole, in France it is beignol, while Germans enjoy their krapfen.
Every major European country has its own way of making, distributing, and selling doughnuts.
Three most promising markets are the United Kingdom, Germany, and Spain. Doughnuts are
offered in small bakery shop, supermarkets, and department stores.

Adapting to different cultural

Americans and the British differ in eating habits and office etiquette. The British are accustomed
to their traditional English breakfast of eggs, bacon, and milk. KKD plans to convince the British
to replace the biscuit, which is a cookie, with a doughnut for their snack food and to buy
doughnuts by the dozen to take to the office. Many people in Britain do not have cars; therefore
they cannot stop by drive-through on their way to work. Office etiquette also is more formal in
Britain and a dozen Krispy Kreme Hot Glazed Original doughnuts would cost about five British
pounds, which is about $10.00. Krispy Kreme will also offer the tea-drinking British its own
custom brews of coffee.

Technological Factors

R&D

During fiscal 2007, KKD awarded development rights in the Middle East, Hong Kong, Macau,
Tokyo, the Philippines and Indonesia. The development and the franchise agreements for these
territories provide for the development of approximately 200 stores, including both factory stores
and satellite, over the next five year. As of January 28, 2007, 17 stores were opened under these
new agreements.

Introduction of the Hot Doughnut Technology

During the 1950s, the doughnut- making process was mechanized with the new Krispy Kreme
automatic doughnut cutter. Hand-cut doughnuts became a thing of the past. All processes in the
bakery became entirely automatic. This was the initial version of Krispy Kreme’s continuous
yeast doughnut-making equipment.
Hot doughnut machine technology

During fiscal 2002, we developed a new hot doughnut machine technology which can provide
our customers with virtually the same hot doughnut experience as the equipment in our factory
stores. This machine, however, has significant advantages over the factory store doughnut
machine in that it is smaller in size, involves a less complicated production process and costs
less. We began our initial tests of the concept with doughnut and coffee shops in three different
markets and venues in North Carolina and continue to develop and enhance the technology. As
of February 2, 2003, five doughnut and coffee shops were open, four of which are owned by the
Company. We plan to continue our tests of this concept. KKD believe this technology will
facilitate our expansion into smaller markets and into dense urban areas.