Dominos Pizza Evaluation - Case Study Example

DOMINO’S PIZZA INC NAME: COURSE: INSTRUCTOR: DATE: Introduction Domino’s Pizza was founded in 1960 and has become a global leader in Pizza delivery in a chain of company and franchise owned stores in the United States and abroad. The company’s performance has improved over the years with popularity of its brand doing well in the competitive fast food business and runs over 9,000 stores in 50 US states and over 60 countries. It was named the chain of the year by Pizza Magazine Today in the year 2003, 2010 and 2011. The company’s mission statement is: “To be the leader in delivering off-premise pizza convenience to consumers around the world” Domino’s Pizza works as a team and intends to achieve its mission across the world through: Being enthusiastic about the quality of their product and constancy in their services; Providing diversified products to meet the needs of all the clients; Giving first priority to safety and security of staff and customers; Creating an environment that value team members; Establishing and maintaining relations that appreciate franchisees and other stakeholders for their contribution (Domino’s Pizza, 2012). The Vision statement and guiding philosophies of Domino’s Pizza include the following statements: We demand integrity Our people are our priority We take good care of our customers We operate with keen hustle and positive attitude We make 10 perfect pizzas everyday (Source: Domino’s Pizza, 2012). Various comments have been made that have shown support to the mission and vision statements of Domino’s Pizza Inc. The rise of its digital sales to nearly 30 percent of the total sales according to J. Patrick Doyle the company’s Chief Executive Officer is an indication of the commitment of the company to improve Pizza delivery to its customers. This has been made possible through the use of smartphone applications such as iPhone, iPod touch which brought in sales of $1 million per week (Press Release, 2011). In addition, Domino’s Pizza recently introduced various Gluten Free Crust products to suit their customers with gluten sensitivity. In his statement, the CEO said “Many of our customers have asked for a gluten free crust, and Domino's is excited to offer a product to customers with mild gluten sensitivity - as well as partner with the NFCA, which has been instrumental to our learning more about how to take this step. The prevalence of gluten sensitivity has become a real issue with significant impact on consumer choice, and we want to be a part of the solution. Now, the whole group can enjoy Domino's with the addition of our new Gluten Free Crust” (Press Release, 2012). This goes handy with the company’s mission and vision statements which focus on customers’ concern. Domino’s Pizza’s spokesperson Chris Brandon also commented on the company’s plans to partner with the National Fire Protection Association in a campaign to be ran during spring throughout the month of March. This is in an effort to remind and educate their customers on the need to stay safe from fire related accidents in the vulnerable spring season (Press Release, March, 2012). This shows how concerned Domino’s Pizza is towards their customers and staff as stated in their mission and vision statements. Domino’s current positioning strategy is the brand positioning strategy. The company realized that its customers were complaining for poor quality pizzas and it embarked on a campaign dubbed “Pizza Turnaround” in 2010 which was meant to improve the quality of its pizza and enhance its brand name in the competitive fast food market. In the ads for this campaign, Domino’s executives admit that their current pizza is disgusting and they pledge to improve it. This is also in line with the mission statement which seeks transparency. Brand positioning helped in reviving the reputation of Domino’s pizza. SWOT Analysis Domino’s Pizza Inc. has been in operation in the fast food industry for over half a century. It has had its ups and downs within its operational time. The Swot analysis below will help in understanding the company’s strengths, weaknesses, opportunities and threats. Strength Domino’s Pizza Inc. is the second largest pizza delivery operating in over 9700 outlets across the 50 states in the United States and over 60 countries worldwide. It has a well-connected network of both franchise and company owned stores internationally. In the US, it is one of the leading and most popular pizza delivery companies. Domino’s first quarter results ended march 25, 2012 rose again with a net store increase of 77 outlets in the quarter and same store sales of 4.7 percent. In the third quarter net income, Domino’s reported a 33 percent rise. At the close of New York trading, Domino’s rose 7.1 percent to $29.85, which is the highest in the price in more than four years (Domino’s Pizza, 2012). The company’s strong brand equity gives it a competitive advantage over its competitors. The intelligent marketing strategy of strong advertising is a major strength to make its brand image distinct and retained in the minds of consumers. The introduction of Artisan Style Pizzas has also been a major strength to the company as it has seen it boost its sales in the US market. The introduction of Gluten free pizza is also a major strength of the company (Domino’s Pizza, 2012). In addition, Domino’s competent and effective supply chain management helps the company maintain its goodwill. Its widespread distribution channels add value to its good reputation. In the era of e commerce and online marketing and online shopping have enabled the company to keep pace with technological innovations by offering online menus, order placement, payment services etc. In the United Kingdom, over 21 percent of domino’s pizza is delivered through online order placement (Free SWOT Analysis, 2010). In the US, online sales amount to about 30 percent of the total sales. There have been various Apps built specifically for Domino’s which include apple’s iPhone and iPod touch as well as for Android. This has helped the business thrive competitively despite harsh competition. In addition, the company has an online tracker system which enables its clients to track the delivery of their order in real time. Weaknesses The company has in the recent past been faced by a challenge of offering poor quality Pizzas. This saw the company’s performance in the years 2007 through 2009. The decline in sales and slow growth also saw the company face critical issues of weakening bottom lines. Opportunities Domino’s Pizza Inc. has promising market expansion opportunities in China and India where it currently operates a few franchises. In addition, Domino’s can develop new products and add to its current menu. The introduction of pizza toppings and new flavor additives tailored for specific regions can be a good progress for the company. In addition, distribution networks for Domino’s should be enforced further to enable market penetration in the current markets at optimal levels. Threats Just like any other fast food business, Domino’s main threat is the increasing consumer awareness regarding the harmful health effects associated with high fat fast food products. Studies in the health sector associating fast food items saturated with sodium, fats, oils and sugars pose a major threat to Domino’s. Moreover, more research has been associating additives, preservatives and flavors added to fast foods with potential harm to the health of the consumers which further threatens Domino’s business. Strong competition and franchise management which differ with currency instability also pose a threat to the business. In addition to this, Domino’s business in countries such as India where unruly traffic is the order of the day hinders the company from reaching its promise of 30 minutes delivery (Free SWOT Analysis, 2010). Domino’s Pizza Inc. Operation Domino’s operates through its own stores as well as franchise. It operates over 9700 company-owned stores and franchise. It has a strong distribution system which enables Domino’s stores to concentrate in making and delivery of fresh Pizzas. Domino’s has developed a centralized distributor and dough making system which relieves individual stores the hustle and time used in making dough, preparing toppings and grating cheese. Domino’s Supply Chain Services offers high quality dough and ingredients across the US which keeps its pizza constantly delicious. Supply chain service through its 17 local distribution hub supplies to more than 5,000 pizza stores in the US with more than 240 products. Delivery of pizza to customer is made within 30 minutes or so, when it’s still fresh. Changes at Domino’s Pizza Inc. in last 5 years Domino’s has undergone a series of changes following its decline in profits during the 2007 financial year. The launch of “Pizza turnaround” campaign in 2010 was a major change in the company in which the company worked towards changing the quality of its pizza due to customers’ complains. The introduction of Artisan Style Pizza in 2011 was a major change to Domino’s menu. In addition, the year 2012 saw Domino’s produce Gluten-free pizza for gluten sensitivity customers. This has seen a great improvement in Domino’s business. Objectives of Domino’s in a ‘new environment’ 1. To be able to engage in healthy pizzas making and engage customers in healthy activities to promote their health and reduce obesity rates. 2. To be the market leader in pizza delivery by increasing the number of stores locally and globally. These objectives are in line with the company’s long term goal of maintaining customers and improving business worldwide. Key Performance Indicators for the objectives include: 1. The increase in sales and profits for our pizzas 2. Have a competitive advantage over our competitors in all markets including Africa Domino’s have raised its income over the last three years as a result of their marketing strategy. The company is therefore capable to meet the set objectives. This is evident with the plans that the company is making to build a restaurant on the moon (Ryall, 2011). Long term strategic objectives 1. To be the world leader in Pizza delivery by number of stores and sales 2. To produce healthy Pizzas distinct from other industry players Key Performance Indicator for each strategic objective above includes; 1. To have adequate company-owned and franchise stores in every corner of the globe 2. The existence of healthy Domino’s Pizza customers Risk management strategy for Pizza Pizzas produced and delivered by Domino’s are of high quality and are packaged in a superior way to ensure that they are delivered fresh and intact. Domino's was the innovated the sturdy, corrugated pizza box, which prevents moisture from weakening the box, while preventing cheese from sticking to the top during delivery (Domino’s Pizza, 2012). Domino’s pizza can apply promotion to ensure that its pizza remains the most preferred pizza in the world market. The idea of promotion is meant to attract more customers to purchase the product. Since the pizza is of high quality, there are high chances of getting new and retaining customers. Such promotions include, reducing prices of pizza or offering three pizzas for a price of two during weekends or holidays. The company is already undertaking advertisement promotions for their new pizza to gain back loyalty from their customers. The promotions are legal as they do not involve or violate neither the rights of the consumers nor that of animals. Besides, the contents of the pizza are all indicated in the packaging as required by law. With the continued campaign and research especially in the stronghold US market on the unhealthy side of fast food including pizza; the product may not necessarily perform well in the future. Nevertheless, producing more healthy pizzas such as Gluten Free pizzas, pizzas without flavors that are believed to enhance weigh gain, may be an important stride to keeping the product in the market. The most common threat that pizza from Domino’s may face is competition from other market operators such as Pizza Hut, , Little Caesars, Papa John's as well as McDonalds which have also mimicked the operations of Domino’s and Pizza packaging and delivery. To keep pizza survive the competition, rigorous research is needed to ensure that the company keeps on developing new ideas and improve on its pizza. The areas to observe is to increase online sales, customization of pizzas online, improve delivery to even a shorter span of time as well as develop more tastes and varieties of pizzas. Conclusion Domino’s Pizza is a market leader in pizza delivery and penetrated both local and international market. It operates through company-owned stores and franchise stores across the globe. It has engaged in various corporate social responsibilities such as fire campaign, early this years and are the first company to produce Gluten free crust for customers with Gluten sensitivity. Engaging in healthier pizza is the future for the company as it has a strong brand name. References Domino’s Pizza (2012). http://www.dominos.com/ (accessed June 7, 2012). Free SWOT Analysis (2010). Domino’s Pizza Inc. SWOT Analysis retrieved http://www.freeswotanalysis.com/fast-food-companies-swot-analysis/13-dominos-pizza-inc-swot-analysis.html (Accessed June 7, 2012). Patton, L. (2011). Domino’s Pizza Says Digital Orders Approaching 30% of Sales http://www.bloomberg.com/news/2011-10-18/domino-s-pizza-says-digital-orders-approaching-30-of-all-sales.html (Accessed June 8, 2012). Press Release (2012). http://phx.corporate-ir.net/phoenix.zhtml?c=135383&p=irol-newsArticle&ID=1692234&highlight= (accessed June 7, 2012). Press Release (2012). http://phx.corporate-ir.net/phoenix.zhtml?c=135383&p=irol-newsArticle&ID=1668794&highlight= (Accessed June 7, 2012). Ryall, J. (2011). http://www.telegraph.co.uk/science/space/8734456/Dominos-plans-pizza-on-the-Moon.html (Accessed June 7, 2012) Read More