But these changes, materialized in increased sales and consequently revenues, improved quality of the products and services offered as well as the technologies used in the manufacturing process have supported the development of the corporation. From a financial point-of-view, they created the image of a strong and reliable company. The reasons why this change has financial implications is a simple one: a stronger company is better perceived by the market and by the stakeholders, increasing as such the company's sales and easing their penetration of new territories. Then, it generates increased interest from investors, easing as such Krispy Kreme's access to funding possibilities.
Even though Krispy Kreme is a strong company and represents an international brand, they are still subjected to numerous risks deriving from both the inside as well as the outside of the company. These risks, as presented by the Management's Discussion and Analysis of Financial Condition and Results of Operations, are determined by:
the company's ability to continue and manage growth delays in store openings the quality of franchise store operations the price and availability of raw materials needed to produce doughnut mixes and other ingredients changes in customer preferences and perceptions risks associated with competition risks associated with fluctuations in operating and quarterly results compliance with government regulations other factors" (Krispy Kreme 2002 Form 10-K).
An important risk facing Krispy Kreme shareholders is the management's determination to commit to long-term success. This strategy is generally to be preferred in the detriment of short-term success, but it can generate dissatisfaction from the stockholders as it limits their benefits. Otherwise put, since the company executives are determined to invest for the long-term benefit of the organization, they could easily decide to cut down or reduce the payment of shareholders' dividends. And the stockholders are generally interested in short-term success and strong financial...
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now