Stakeholder Mapping for Krispy Kreme Doughnuts Inc.


Essay, 2016
24 Pages, Grade: 82%

Excerpt

Contents

1. Introduction

2. Main Body
2.1 Organisation Profile
2.2 Stakeholder Theory
2.3 Stakeholder Mapping & Analysis
2.4 Conflicts Between Stakeholders
2.5 Management of Stakeholders
2.6 Limitations of Stakeholder Analysis
2.7 Advantage/Disadvantages of Stakeholder Analysis

3. Recommendations

4. Conclusions

References

Appendices

1. Introduction

The UK “Fast Food” or Quick Service Restaurant (QSR) industry was worth £33.5bn in 2014(Mintel, 2014). Krispy Kreme (KK) is a leading branded retailer and wholesaler of doughnuts and baked goods and has recently been voted one of the most reputable QSR restaurants, despite a poor corporate governance history(Mazurak, 2015)(CFO, 2005). KK's business includes the ownership and franchise of KK stores espousing good relationships with employees and the community via a variety of projects. This report analyses KK stakeholder relationships and compares the rhetoric to reality.

2. Main Body

2.1 Organisation Profile

KK's history (detailed in Appendix 1) consists of company stores, domestic and international franchises plus the supply of doughnut ingredients and machinery. In February 2015, there were 278 USA and 709 international stores as detailed below(KrispyKreme, 2015).

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Figure 1 Number of KK stores as of February 2015 (KrispyKreme, 2015)

Independent franchisees contributed 34% of total revenues for 2015(KrispyKreme, 2015). Failure of franchisees to successfully operate could materially affect reputation and profits, as the public view actions taken by franchisees as those undertaken by KK.

Customers comprise of two different types: ‘on premises’ (direct customers), and ‘wholesale’ (retail customers) however for this report they will be treated equally. Industry data indicates that during 2015, doughnut industry sales rose approximately 4.8% in grocery stores and 14.3% in convenience stores(Securities Exchange Commission, 2015). During the same period, KK's market share declined 0.7% and 1.3% respectively(KrispyKreme, 2015).

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Figure 2 KK revenues by geographic region in thousands(KrispyKreme, 2015)

The significance of declining profits (diminishing from £34 to £30 million in 2015) creates a link to plummeting price earnings as demonstrated by the figure below(Market Watch, 2016).

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Figure 3 KK price-earnings (Market Watch, 2016)

Forecasts claim that the company could face bankruptcy unless it achieves success in new or emerging markets(LaMonica, 2015). Therefore, the business strategy needs to align stakeholder needs with the necessary changes, to achieve profitability and sustainability.

2.2 Stakeholder Theory

Stakeholder analysis refers to the action of analysing the attitudes of stakeholders(GISD, 2016); it consists of recognising persons or groups that are likely to be affected or affect an action by the organisation and sorting those stakeholders according to their impact/needs.

A Stakeholder is: “Any person or organisation who can be positively or negatively impacted by, or cause an impact on the actions of a company”(Freeman, 1984).

“The individuals and constituencies that contribute, either voluntarily or involuntarily, to its wealth-creating capacity and activities, and are therefore its potential beneficiaries and/or risk bearers”(Post, et al., 2002).

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Figure 4 KK key stakeholders(McLaughlin, 2016)

Each of the above groups holds differing and/or opposing needs. Stakeholder mapping is important as management needs to realise that to succeed, an organisation must be able to identify and satisfy key stakeholders (Moore, 1995). Shareholders and the financial community’s satisfaction need to be met by paying dividends or creating profits (shareholder value perspective), as opposed to employees who seek more pay(Glassdoor, 2016). Other issues also need to be resolved such as settling environmental standards (e.g. reduction of Palm Oil usage which encourages deforestation), international regulatory cases, and dealing with poor Corporate Social Responsibility (CSR) policies (such as the KKK, Krispy Kreme Klub debacle in Hull) (Carroll, 1991).

2.3 Stakeholder Mapping & Analysis

Stakeholders can be primary, secondary and key stakeholders; however the power of those is not dependant on where they sit within the matrix but whether they can garner active support from others. The mapping technique reveals the behavioural aspects of each of the Stakeholders(Post, et al., 2002), as well as anticipating the consequences of changes in activities.

To get the “big picture”, a market analysis (e.g. Ansoff’s) would need to be undertaken first followed by stakeholder analysis. However for this report, Mendelow’s Matrix has been conducted with a brief overview of the Power/ Dynamism Matrix and the Power Legitimacy Urgency Matrix subsequently enumerated.

Mendelow's Matrix

Mendelow’s Matrix although subjective is the most popular method used for stakeholder analysis. Mendelow initially espoused the benefits of environmental scanning and the impact of the stakeholder concept in 1981(Mendelow, 1981). Mendelow's paper was almost prophetic in its origins followed by cases of Polypeck, Maxwell, etc. throughout the 80s/90s(Brown & Laverick, 1994). Mendelow further advocated the importance of setting corporate goals and measuring organisational effectiveness (Mendelow, 1983). Considerable debate has occurred as to what constitutes a stakeholder.

Mendelow created the Interest/Power Matrix where stakeholders are assigned positions concerning interest and power in the organisation’s activities(Mendelow, 1991). Relationships between KK and interested parties were identified; taking into account that stakeholders do not hold equal power or interest and that their position may shift by amassing support elsewhere.

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Figure 5 Mendelow's matrix for KK(Mendelow, 1983)

Following Mendelow’s matrix, detailed above, the following section analyses each box to gain a stakeholder insight for KK.

Box A - Minimum Effort – Direction

Low interest and power; Unionisation Initiatives are malleable to management direction, and employees remain on minimum wage compared to other companies(Ashworth-Hayes, 2014). Customers also have low power and interest as their purchasing appears to be not affected by KK’s use of palm oil in its products, caged chickens’ eggs, or KKK branding.

[...]

Excerpt out of 24 pages

Details

Title
Stakeholder Mapping for Krispy Kreme Doughnuts Inc.
College
University of Ulster
Course
BSc Business Studies
Grade
82%
Author
Year
2016
Pages
24
Catalog Number
V336027
ISBN (eBook)
9783668258556
ISBN (Book)
9783668258563
File size
2106 KB
Language
English
Tags
stakeholder, mapping, krispy, kreme, doughnuts
Quote paper
Irene Anne McLaughlin (Author), 2016, Stakeholder Mapping for Krispy Kreme Doughnuts Inc., Munich, GRIN Verlag, https://www.grin.com/document/336027

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