Krispy Kreme Doughnuts, Inc. is a branded specialty retailer of premium quality doughnuts. The doughnut retailer started its operation in 1937 when Vernon Rudolph, the company founder, realized the opportunities that existed in the thriving local economy of the developing southeastern city of Winston-Salem. Today, Krispy Kreme has its headquarters in Winston-Salem and sells approximately 3.5 million doughnuts daily. It has expanded its operations outside the southeast to many metropolitan markets receiving a flurry of excitement from customers with each new store opening. With its stock prices 70 times projected 2003 earning per share the company's executive management realizes the need for strong strategies and high growth potential.
             Krispy Kreme has a vertically integrated company structure that supports and profits from high-volume production and sale of high quality doughnuts and coffee products. The company's business is driven by two complementing business units: store operations, both company and franchise, and Krispy Kreme Manufacturing and Distribution (KKM&D). The company's revenue is derived from the sale of doughnuts produced and distributed by company owned stores and franchise store operations. Krispy Kreme's unique business model is comprised of the company's retail stores, which are high automated and produces high-volumes of doughnut products sold through multiple sales channels. KKM&D has developed important operating competencies and capabilities that are used to support the company's stores by providing strong product knowledge and technical skills, and by maintaining control of all critical production and distribution processes.
             When determining a long-term direction or a strategy, it is imperative that the executive management of Krispy Kreme analyze their industry's dominant economic traits. These traits will help frame the window of strategic approaches Krispy...