Business
Company Background and Strategies
During the early 1900’s, pizza was introduced in the United States because of the huge number of Italian immigrants who brought the food to the country. Since then, the pizza grew even more after World War II and it has become part of the American lifestyle. Between 1945 and 1960, different pizza stores began to open all over the country like Pizza Hut and Little Caesar. Domino’s Pizza which started as a start-up plan in Indiana in 1960 is now considered to be the second largest pizza chain in the United States, after Pizza Hut. With more than 10,000 corporate and franchised stores in 70 different countries, it is considered to be the largest pizza company worldwide ("Top 100 Chains: U.S. Sales"). In 1967, the company opened its first franchise location and by 1968, the company has already expanded to 200 stores.
In 1983, the company was able to open its first international store in Winnipeg, Canada and at the same year, they have opened a total of 1,000 stores. In 1985, they opened their first store in United Kingdom in Luton and they were also able to open a store in Tokyo, Japan. Ten years later, the company has already opened in 1,000 international locations in five different continents. By 2014, the company is now expanded to 6,000 international locations and according to CEO Patrick Doyle, they are now looking into opening a store in the birthplace of pizza in Italy (The Italy News). The company’s vision states to be the number one pizza for the people, while their mission and objective is to be the leading pizza delivery company not just locally but also around the globe. They are dedicated in providing their customers convenient way to order their products through innovative technology. The company believes that aside from providing quality product, they should also provide the highest quality of service to their customers (Domino's Pizza).
On a corporate level, the company tried to compete head on with the other pizza chains like Pizza hut and Little Caesars by opening stored in different locations, not only in the country but also internationally. The company is operating at three different corporate segments along its business lines and the first is their domestically owned and franchise stores. The second segment on the other hand is their domestic supply chain stores while the third segment is their international operating stores. The company has now a total of more than 10,000 operating stores inside and outside of the United States.
On their business strategy level, the company tries to be ahead of their competitors by trying to be the best cost provider. To become the best cost provider, the company must be able to provide some valuable attributes and at a fair and reasonable price. They always aim to put their customers first rather than the product. With that, the company has reinvented their products based on the customers’ needs throughout the years. Aside from producing pizza, they also improve other items on their menu like pasta and sandwiches (Lutz).
The company’s functional level strategy consists of those people and personalities that get the work done for the corporation. They have been using an advanced divisional structure which each division has its own independent profit centers. Each store has an executive who monitors each of the department. The company also focuses on their operation of delivering pizza rather than opening a dine-in area because that is what their company is aiming to be. By carrying out efficient delivery service to its patrons, it minimized its operation costs and at the same time reaches more customers.
Company’s EFE Matrix
Company’s CPM Matrix
Company’s IFE Matrix
Company Internal Analysis: Strengths and Weaknesses
The major strength of the company is the brand recall because of its regular advertising. The company has used not only thru television and radio advertisements but also through social media. Their taglines have created awareness for their customers and at the same time quality service promise to their patrons. Aside from that, the major strength of the company that is essential to their success is their great channel network with over 10,000 franchise and company owned outlets. With that, they can deliver quick service to their customers and at the same time, quality food products. Their pricing is also a great strength compared to their competitors because it has attracted a wide range of individuals from the lower middle class to the upper class.
Although the company may have a lot of outlets in and out of the country, they are still facing some problems when it comes to their operations. For example, because of their large numbers of franchise outlets, it can be difficult for some of them to handle the operations. With that, quality control can become challenging and this might end to some of the outlets closing. This is also the main reason why the company has low staff retention. Because of the lack of training, staff exposed to a hectic environment cannot keep up with the operations. When some of the outlets close, there will be a decrease in sales.
Industry and Business Analysis
According to the market research report done by IBIS World, the pizza industry has slowly risen over the past five years. This is because there is an intense external competition from a wide variety of new food services that provide healthier options as the people are now more health conscious and this have worked against the industry. With this drastic change, many companies like Pizza Hut have invested in adapting their menus depending on their customer’s preferences in order to improve the profit margin (IBISWorld US). However, the “millenials” seems to still love pizza and they have become the major group the pizza companies are targeting. They are particularly looking for satisfying and beautifully made pizzas that are worth posting on their social media feeds (Schlossberg). With these trends, shown below are the financial ratios of the company for the last year ("Domino's Pizza Financial Ratios DPZ | Daily Finance"):
Dominos Pizza’s earning has been strong in 2015 and because of the changes in the market, the company is exploring technological solutions to be the top in the fast food market. For the past five years, the company has been performing positively when it comes to sales even when they decided to raise their prices in 2012. Although there have been a slight decrease in sales by the end of 2014, the company was able to manage to increase their sales by 2015. To be able to expect a steady increase this year, the company must be able to address their weaknesses by providing healthier options and variety in their menu. The company must also be able to invest in training their staff, establishing policies and standards when it comes to their employees’ performance.
Works Cited
"Domino's Pizza Financial Ratios DPZ | DailyFinance." DailyFinance. N.p., 2015. Web. 20 Feb. 2016.
Domino's Pizza. "Vision & Mission - Domino's Pizza." Domino's Pizza - Order Online for Pizza Delivery & Takeaway. N.p., n.d. Web. 20 Feb. 2016.
IBISWorld US. "Pizza Restaurants in the US Market Research | IBISWorld." IBISWorld US. N.p., Nov. 2015. Web. 20 Feb. 2016.
Lutz, Ashley. "Domino's Turnaround Strategy." Business Insider. N.p., 13 Apr. 2015. Web. 20 Feb. 2016.
Schlossberg, Mallory. "Pizza is Going High Class or Low Class." Business Insider. N.p., 12 July 2015. Web. 20 Feb. 2016.
The Italy News. "CEO Hopes Domino Brand Pizza Will Be a Hit in Italy." The Italy News. N.p., 18 May 2014. Web. 20 Feb. 2016.
"Top 100 Chains: U.S. Sales." Nation's Restaurant News. N.p., 2012. Web. 20 Feb. 2016.
