Business Level Strategies Discussion

Discussion Instructions

Chapter 6 focuses on Business Level Strategies. 

1) If you were appointed CEO of Krispy Kreme what new business strategies would you implement to strengthen its existing business model and insure their success.  (Either in Australia, or in the USA)

The first strategy would be evaluating where the business has succeeded and where it has failed. This is by testing the market to evaluate the demand of the company product which determines the type of expansion that the company is likely to undertake. This requires conducting the market research to establish customer opinion in regards to the company products. On the other hand, as a new CEO, the main strategy should be expanding the business to incorporate other food products, including healthier diets to ensure that the company is able to attract a diverse group of customers. Another strategy would be to evaluate the number of stores and the area coverage considering that opening a large number of stores has been detrimental to the company operations. The growth should be limited to geographical coverage and the customer demand to ensure that the stores remain profitable in the long run.

2) Identify at least 2-3 strategies that would help keep the business relevant, competitive, and successful.  State why you think these strategies are important and how they might improve their business. 

One strategy is investing in other food products to incorporate the needs of millennial customers and the focus on healthier diets. This will help in making sure that the company is able to attract a large and diverse customer segment. People are becoming more health-conscious, and therefore it is important to come up with diets that appeal to such a group of customers. Another strategy is balancing between social welfare and the profitability of the business operations. The company should be involved in social activities but should also be able to manage the cost of operations. One way to ensure that a business remains competitive and relevant is understanding the customers as well as their needs and coming up with strategies to ensure that those needs have been met. Another strategy that can be used is targeting new markets to ensure that the company provides a wide range of products. Lastly a company should embrace innovation in its operations and the product it provides which will help in creating a differentiation aspect.

3) Finally, in your opinion, what was the biggest strategic flaw that Krispy Kreme encountered in Australia?

The biggest strategic flaw was failing to monitor rapid company expansion without monitoring customer interests, demands, and customer perception. The rapid expansion should be based on market demand, and the company should ensure that saturation is avoided. Having expanded within a short period of time, Krispy Kreme failed to factor in the fact that customer demand may change from time to time. If the company could have factored in the customer demand and managed its growth, then it could have been able to maintain high demand. The laws of demand and supply state that when the supply is high, then the demand is low, and therefore opening more stores within a short period of time negatively affected the demand, which in turn affected the company growth. Furthermore, since the company was offering a single product, then changes in the market would negatively affect its growth and it had not been able to plan for those changes.

Discussion Sample Solution

Chapter 6 focuses on Business Level Strategies. 

1) If you were appointed CEO of Krispy Kreme what new business strategies would you implement to strengthen its existing business model and insure their success.  (Either in Australia, or in the USA)

The first strategy would be evaluating where the business has succeeded and where it has failed. This is by testing the market to evaluate the demand of the company product which determines the type of expansion that the company is likely to undertake. This requires conducting the market research to establish customer opinion in regards to the company products. On the other hand, as a new CEO, the main strategy should be expanding the business to incorporate other food products, including healthier diets to ensure that the company is able to attract a diverse group of customers. Another strategy would be to evaluate the number of stores and the area coverage considering that opening a large number of stores has been detrimental to the company operations. The growth should be limited to geographical coverage and the customer demand to ensure that the stores remain profitable in the long run.

2) Identify at least 2-3 strategies that would help keep the business relevant, competitive, and successful.  State why you think these strategies are important and how they might improve their business. 

One strategy is investing in other food products to incorporate the needs of millennial customers and the focus on healthier diets. This will help in making sure that the company is able to attract a large and diverse customer segment. People are becoming more health-conscious, and therefore it is important to come up with diets that appeal to such a group of customers. Another strategy is balancing between social welfare and the profitability of the business operations. The company should be involved in social activities but should also be able to manage the cost of operations. One way to ensure that a business remains competitive and relevant is understanding the customers as well as their needs and coming up with strategies to ensure that those needs have been met. Another strategy that can be used is targeting new markets to ensure that the company provides a wide range of products. Lastly a company should embrace innovation in its operations and the product it provides which will help in creating a differentiation aspect.

3) Finally, in your opinion, what was the biggest strategic flaw that Krispy Kreme encountered in Australia?

The biggest strategic flaw was failing to monitor rapid company expansion without monitoring customer interests, demands, and customer perception. The rapid expansion should be based on market demand, and the company should ensure that saturation is avoided. Having expanded within a short period of time, Krispy Kreme failed to factor in the fact that customer demand may change from time to time. If the company could have factored in the customer demand and managed its growth, then it could have been able to maintain high demand. The laws of demand and supply state that when the supply is high, then the demand is low, and therefore opening more stores within a short period of time negatively affected the demand, which in turn affected the company growth. Furthermore, since the company was offering a single product, then changes in the market would negatively affect its growth and it had not been able to plan for those changes.