BUSINESS POLICY

DR. J. WU

History
Founded by Vernon Randolph
Purchased secret doughnut recipe in Lake Charles, LA
Opened first doughnut shop in 1937 (Winston-Salem, NC)
Became public entity in 2000
Problems
Stock prices decreased from $40/share to $10/share
Carb-free diet known as Atkins diet
The main franchisee in Arizona and New Mexico filed for
bankruptcy in 2005.
Sheetz (large convenience store on the East Coast) quit
purchasing donuts in favor of producing their own in 2008.
International stores in Hong Kong and Canada shut down
in 2008.
Operating Loss in 2007, 2008, and 2009



General Environment Analysis
Relaxed, somewhat playful, culture
The MAGIC concept
Brand Recognition
Wide Demand
Proficiency of Machines
Product Quality and Quantity
Industry Environment Analysis
Quick Service Restaurant (QSR)
Stock shares are currently rising
Increase of stock prices
Stable sales growth
Positive operation conditions
Lowering prices and slowing expansion in the overstored
QSR market to focus on creating healthy menu items

EFE Matrix
Opportunities
International Expansion 0.20 x 4 = 0.80
Greater percentage of Americans working 0.15 x 4 = 0.60
Local International Stores willing to buy ingredients 0.05 x 2 = 0.10
New beverage program for hot drinks 0.10 x 3 = 0.30

Threats
McDonalds 0.10 x 3 = 0.30
Dunkin Donuts 0.15 x 4 = 0.60
Demand for Healthier items 0.15 x 3 = 0.45
Substitute products 0.20 x 4 = 0.80
Total_________________________________________3.95

Internal Competence
Core Competences
Brand Quality
Tradition
Secret Ingredient
Open 24 Hours
Store Appearance
40-Foot Window
Vintage Images

IFE Matrix
Strengths
Brand Quality 0.10 x 4 = 0.40
Store Appearance 0.10 x 4 = 0.40
Technological Efficiency 0.10 x 3 = 0.30
Availability 0.10 x 3 = 0.30
Customer Value 0.10 x 4 = 0.40

Weaknesses
Number of stores 0.10 x 1 = 0.10
Beverage sales 0.10 x 2 = 0.20
Offers no dividends 0.10 x 1 = 0.10
Little advertisement 0.10 x 1 = 0.10
Weak business in international markets 0.10 x 1 = 0.10
Total_________________________________________2.40
BUSINESS POLICY
DR. J. WU