Independent University, Bangladesh (IUB)

Course: International Business (MBA 514)

Home Assignment
Domino’s pizza Case study

Submitted to:
Dr. Mohammad Abdullah Mahfuz

Submitted by:

Rajaul Karim ID:1621079

Date of Submission: 23 June, 2019

 Domino’s Pizza Case study

Pizza was brought to America in the 1800’s by Italian immigrants and rose to popularity in the
1950’s as Italian-American celebrities, such as Frank Sinatra, began speaking highly of the “pie”.1
2 It wasn’t long after this rise that the Domino’s chain was created. In the year 1960, two brothers
Tom and James Monaghan scraped together $500 to buy a small pizzeria in Michigan called
Dominick’s Pizza. After only 8 months, James grew tired of the business and sold his shares to his
brother to buy a second hand Volkswagen car. Tom took this opportunity to revitalize the store
and, in addition to making decorative changes to the pizza joint, enact changes to improve its
profitability.

“Domino’s Pizza”, and the rest, as they say, is history. The company incorporated under its new
name in 1965. 6 With continued expansion and growth, Domino’s swiftly became the second-
largest player in the market (behind Pizza Hut).7 By the year 2000, the company had over 6,500
stores worldwide (most of which were franchises) and had sales of over $3 billion.8 The company
became widely known for being innovators in the pizza restaurant space, developing new
processes to increase efficiency and lower costs such as the belt driven pizza oven, which soon
became an industry standard. Additionally, it began an extensive ad campaign in the early 1970’s
that touted its ability to deliver a pizza in “30 minutes or less”, which became widely popular
amongst fans of fast-food delivery services. In 2008, it launched its Pizza Tracker service, an
online system that allowed customers to track the status of their pizza in real-team. With so much
growth and innovation, it was thus surprising that Domino’s stock actually reached its all-time low
in 2008, at a measly $4 a share. It was a harsh reminder that domestic demand was weak and that
the company would need a drastic change to bring it back to prominence.

Domino’s has managed to pull off a huge turnaround by using innovative marketing strategies that
fused traditional advertising, social media, and public relations. Domino’s has been opening
hundreds of new locations and profits are soaring. Morgan Stanley recently named it the “leader
in US delivery pizza.” But just a few years ago, Domino’s was struggling to compete with Pizza
Hut and Papa John’s. Executives made some crucial changes that turned around business.

2
Below are a series of articles and videos that piece together the case for how Domino’s Pizza
franchise went from struggling with bland “cardboard” pizzas to new heights of success.

Domino’s leads the pack with a weekly penetration rate of 0.38 percent, UberEats trails the pizza
maker with 0.21 percent and Pizza Hut’s mobile app comes barely edges out GrubHub for 3rd
place with 0.17 percent. Further down the list are DoorDash, Amazon Prime Now and Postmates,
which are ranked 7th (0.09 percent), 8th (0.09 percent) and 9th (0.07 percent), respectively.

Across the board, the apps all reach a smaller slice of the population than the dominant food
delivery apps in China and India, which reach nearly 1 percent of Android users in those countries,
according to Cheetah Lab. As such, demand for app-based food deliveries in the U.S. market is
still small.Still, UberEats, the offshoot Uber app where smartphone customers pay $5 for delivery
from hundreds of different area restaurants, has grown faster than the competition. The app, which
relies on Uber drivers to make deliveries, surpassed GrubHub in popularity in the U.S. market at
the end of 2016.“As a latecomer to the food delivery industry, UberEats’ advantage is in its more
stable pricing and relatively low fees,” the research firm said in its report.

“In the U.S., most food delivery apps are not limited to certain times or regions, so as to satisfy
user demand to the greatest extent possible. However, this leads to high delivery and service fees.
Furthermore, food delivery apps (other than Eats) only provide an estimated amount — the final
amount may be even higher, which leads to dissatisfaction among users.”

Questions:

1. How Domino’s Pizza used technology for faster delivery?

2. What would be more effective marketing strategy than competitors?

3. How to reduce more delivery cost?

4. How Domino’s Pizza compare them from their competitor?