Krispy Kreme has had its stock decline sharply, not because of any problem with its famous doughnuts, but because the price of oil has gone down. At first blush it is hard to see what the price of oil has to do with Krispy Kreme's business, but it turns out that Krispy Kreme's business is highly sensitive to oil prices.
As Forbes reports, Krispy Kreme's stock price is suffering because the company had embarked on an aggressive campaign of expansion into foreign markets, many of whose economies are down due to the fall in oil prices. Places like Saudi Arabia and Mexico are now home to many Krispy Kreme stores.
And while a doughnut company reeling from a fall in oil prices may seem unique, this kind of thing happens all the time. And not only due to overseas expansion, but also due to factors such as litigation, technological change, international conflict and many other factors upend the day to day business of organizations constantly. Boards need to keep their eye on the horizon to be watchful for these kinds of issues, and the only way to do that is to carve out enough time to understand the organization and the broader strategic trends that affect it.
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