Domino’s Pizza

Project Report

Submitted to: Dr. Piyush Verma

Submitted by: Sumanyu Kapoor(401508032)

Adnan Ahmed(401508005)

Utsav Gautam (401688004)

1
 INDEX

1. Introduction……………………………………………………… 3
2. Company analysis……………………………………………….. 4
3. Industry analysis………………………………………………… 5
4. SWOT analysis…………………………………………………… 7
5. Porter five force diagram………………………………………… 9
6. References and bibliograpy………………………………………. 13

2
1. Introduction

a) Company Overview

Domino's Pizza, is an international pizza delivery corporation headquartered in Michigan,

United States Founded in 1960, Domino's is the second-largest pizza chain in the United States
and has nearly 9,000 corporate and franchised stores in 60 international markets and all 50 U.S.
states. The menu features pizza, pasta, oven-baked tacos, wings, boneless chicken, salads,
breadsticks, cheese sticks, and a variety of dessert item.

Domino's pizza entered in the Spanish market in 2009, entering directly through buying all the
Pizza Hut franchises, so in one quick movement Domino's Pizza gained a significant market
share in Spain.

Some key points:

 Jubilant Food Works Limited is a part of Jubilant Bhartiya group and it initiated
operations in 1996.

 The company operates Domino’s Pizza and Dunkin’ Donuts in India.

 Market leader in the organized pizza market with 67% market share in India.

 The Company is market leader in the pizza segment with a network of 1,249 Domino’s
Pizza restaurants across 276 cities in India (as on June 30, 2019).

 Generated revenue of US $ 3.433B as on 2018.

 Dominos has 23,777 Number of employees in India.

3
2. Company Analysis

a) Strategy

Firstly, it is important to know which is the strategy of Domino's Pizza, we should self-asses the
company within it in order to achieve the starting point for the project.

1. Vision

“Exceptional people on a mission to be the best pizza delivery company in the world.”

2. Mission

“Domino’s Pizza is the Pizza specialist who consistently delights the customer with great
taste and choices in pizza with friendly courteous team members providing prompt, safe
delivery service.”

3. Values

Some of the Domino's pizza values are,

1. Treat people as you'd like to be treated.

2. Produce the best for less.

3. Measure, manage and share what's important.

4. Think big and grow.

5. Incentive what you want to change.

6. Set the bar high, train, and never stop learning.

7. Promote from within.

8. We are not ordinary, we are exceptional.

b) Organizational Structure
To analyze the organizational structure of Domino's Pizza we must analyze firstly
the group who owns Domino's Pizza in Spain, Group Zena is a leading

4
Spanish casual dining and fast-food restaurant group, composed of a mix of owned
brands. In the following parts we will analyze with more details this group.

3. Industry Analysis

a) Competitor analysis

The pizza industry is a highly competitive and mature market. There arc many pima makers
ranging from local pizzerias to international franchises. With the current health kick in today's
society as well as economic downturn, many companies are being forced to make healthier,
cheaper products. Many other companies arc introducing salads into their menu. The popularity

5
of the Internet as well as mobile commerce is transforming the traditional ways of ordering a
pizza.

In the Spanish pizza market there are many companies exist but among them Tele pizza ranks as
a strongest pizza delivery company. Tele pizza is a Spanish home delivery and take away pizza
business that was founded in 1987 in a small Madrid pizza restaurant. Today. Tele pizza operates
around 650 outlets in Spain (both owned and franchised) that reach 12 million households.
According to DBK. Tele pizza is the market leader in the pizza delivery market in Spain, with a
70% share.

Competition was becoming tougher in terms of restaurants and at home, even more so in the
latter case due to progress made in preparing precooked foods. All types of restaurants competed
with Domino's Pizza, but the groups are organized. Within the pizza segment included: Tele
pizza which is the market's biggest share holder, and another company from Zena group called
Pizza Mayo . from the lbersol group in Spain. which were focused largely on consumption on the
premises. Domino's Pizza's competitors in the delivery and take away sector were Chinese
restaurants, small operators and Fast Food chains such as McDonalds or Burger King.

Domino's pizza and its competitors belongs to Horeca sector. Tele Pizza has secured a market
value share of 26.1% making it the most dominant player in the fast food market in Spain sincc
1997. The strong growth is attributed to its sale to Pizza World. The fast food market being very
crowded with TelePizza and McDonald's chains controlling more than 50% of the total market
value is further being compressed with the entrance of Burger King and Pizza Hut. The pizzas
and burgers sectors represent majority of the market reaching to a combined 70.2%.

 Dominos compete against regional and local companies as well as national chains, Pizza
Hut and La Pinoz.

 We generally compete on the basis of product quality, location, image, service and price.

 We also compete on a broader scale with quick service and other international, national,
regional and local restaurants.

 In addition, the overall food service industry in particular are intensely competitive with
respect to product quality, price, service, convenience and concept.

6
  The industry is often affected by changes in consumer tastes, economic conditions,
demographic trends and consumers’ disposable income.

Group Zena

Group Zena S.A. operates restaurants and cafes in Spain. It also operates fast food outlets. The
company is based in Aravaca. Spain. Group Zena S.A. is a former subsidiary of Carrefour SA.
Grupo Zola is owner of Foster's Hollywood. La Vaca Argentina, Car as y Tapas. Burger King,
Nostrus, IL Tempietto and Domino's Pizza.

Group Zena was ex-franchise owner of North American pizza giant Pizza Hut in Spain.
However, the end of the agreement between Zena Group and North American company caused
the disappearance of Pizza Hut from the Spanish market. With this agreement broken, a new
agreement between Zena Group and Domino's Pizza Inc. brought Domino's Pizza to the Spanish
consumer food service market in 2009.

After having completed a quick analysis of the different factors in the Pizza delivery market in
Spain. we have come out with several points:

o There are a few majors competitors at national scale

o The restaurants arc divided between company's owned and franchises

o The main differentiation remains in the offer and services provided

o A Constant Communication is required to motivate Customer's Loyalty

These two companies are fighting in a highly competitive environment using constant
promotional offers and communication in order to motivate customers' trials and repeat
purchasing. In this industry we found services to be very important and definitely dependent on
the businesses activities.

4. SWOT Analysis

In this part, we are going to use the SWOT analysis to identify the strengths. weaknesses.
opportunities and threats in order to get a quick overview of Domino's pizza strategic situation.
According to Johnson (2005) strengths and weaknesses focuses on an internal perspective of a

7
 company, it is the result of an analysis carried out to point out the real competence,: of a business
and the different areas of improvement. Threats and opportunities are external: focusing on the
environmental conditions where the company is operating in. The company is looking at how
could it be affected by it and which opportunities can it take advantage from. This is where a
SWOT analysis is helpful. It challenges you to see beyond your company walls to determine
what opportunities are open for your company and how to capitalize on your strengths.

STRENGTHS WEAKNESS
1. Worldwide presence
1. There is a lack of organic pizza which will limit the
2.Strong Image. target market.
3. Strong network within franchisees. 2. Outlets lack space.
4. Franchises are diversified and able to increase 3. Ambience not upto expectations.
their market share and encourage sales.
4. Lack of variety.
5. Food attracts people of various ranges from young
to old.

Swot
Analysis
OPPORTUNITIES THREATS
1. Growing fast food market - scope for
1. Emergence of pizza hut and otheer brands.
expansion.
2. Employee retention and satisfaction.
2. Introduce more varieties
3. No take away counters for pizzas.
3. Bigger outlets.
4. Take away counters.
5. special promotions.

Fig: Domino’s pizza SWOT Analysis.

8
we have divided the different factors as internal or external for the organization. It is doubtless
Domino's Pizza has important strengths that helps to cope with uncertain and ever changing
environments but they should try to take the most of the opportunities in the near future as well
as to attempt to reduce the impact of its threats over its performance. they must take into account
relevant aspects as the intense competition within the industry or the more healthier food trends.
Domino's pizza do not have specific weaknesses but the lack of organic pizza limits the target
market which become more of an issue lately. Thus Domino's should focus on low carbohydrate
and low calorie products in order to increase their sells. As we are mentioning in our project. the
iphone application for the beginning and in the latter stages applications for all smartphones
would be a great aspect for their future business.

The SWOT can provide multiple benefits to our project.

These benefits can include:

1. Insight into where Domino's Pizza can focus to grow.

2. Understand the Pizza indusuy structure by using a SWOT in our business plan.
3. Focus your advertising and marketing on areas that give you a competitive advantage in
the marketplace.
4. The foresight to see looming threats and react proactively.

5. Porter five forces: Domino's Pizza

Porter’s five forces model is an analysis tool that uses five industry forces to determine the
intensity of competition in an industry and its profitability level.

Considering the Swot analysis one important part every analysis. we can explain briefly which
are the fives forces Domino's Pizza have to cope with.

According to Porter (1980) this model includes three forces from horizontal' competition: threat
of substitute products. the threat of established rivals. and the ducat of new annul's: and two
forces from 'vertical' competition: the bargaining power of suppliers and the bargaining power of
customers.

9
 Porter five force model:

1. The bargaining power of the buyers.

2. Entry barriers.

3. Rivalry

4. Substitutes

5. The bargaining power of the suppliers.

Bargaining power of customers Threat of new entrants

 Switching costs are low.  The saturation in the industry

 The products that they need are is huge.
high volume and not  Speedy and reliable channels
differentiated. are essential among all firms.
 Lot of substitutes.  Cost disadvantages are
significant.
Bargaining power of suppliers

 Switching costs are nearly zero.

Competitive rivalry within the
Thus finding a second option is
industry
easy.
 Customers bargaining power is  High rivalry among firms.
likely to be low.  Huge number of companies offering
the same product.

Threat of substitute products

 Too many substitute exist in

the industry.
 The threat of substitutes is
very high.

Fig: Porter five force diag.

10
 1. Bargaining power of suppliers

Domino's pizza suppliers have low bargaining power because the number of suppliers who can
sell to Domino's pizza the products that they need is high volume and not differentiated. In
addition to it, the switching casts from one supplier to another are so easy and tend to make up a
large portion of the supplier's revenue. This severely limits the bargaining power of the suppliers.
There are also a lot of substitutes (or the particular input. Suppliers are not a problem for
domino's pizza, at least until now they have no problem.

2. Bargaining power of customers

Similarly. the bargaining power of customers determines how much customers can impose
pressure on margins and volumes. But for Domino's pizza customers bargaining power is likely
to be low. The buyer switching costs are nearly zero, any customer could find a second option
for Domino's pizza. for example. they can prefer other substitutes such as frozen pizza.
microwave pizza etc. or other pizza restaurants and chains. The costumers generally don't buy
large volumes, so there is not a concentration of buyers.

3. Threat of new entrants

Threat of new entrants depends on different factors,

• Economies of Scale: The saturation of the pizza industry is a huge limiter of how much an
advantage can be attained by economies of scale.

• Product Differentiation: Differentiation is a necessary expense in the pizza industry but it is not
difficult to overcome m we can say it is not a significant barrier to market entry.

• Capital requirements will dominate the formation of new, national competitors. but is not a
significant barrier to private startups.

• Cost Disadvantages: The extreme saturation and similarity in product offering make convenient
locations essential for quick service restaurants large and small. This is a significant barrier to
entry.

11
• Distribution Channels Speedy and reliable channels are essential among all firms in the
industry, they are not necessarily difficult for new corners to attain.

Due to the lack of any of the barriers to entry being so significant, we feel the threat of new
entrants is high.

4. Threat of substitutes

The threat that substitute products pose to an industry's profitability depends on the relative
price-to-performance ratios of the different types of products or services to which customers can
turn to satisfy the same basic need. The threat of substitution is also affected by switching costs.

In this sector, there are lots of substitutes. For example, frozen pizza is an important substitute
for pizza delivery. In (act, the entrance of premium frozen and refrigerated pizzas such as Dr.
Oetker. Bohan or white label products of Mercadona. Consum etc. had a significant impact on
Domino's Pizza working to shrink the market and drive down prices. With so many firms in the
pizza delivery industry, low switching costs, similar products, and maybe healthier options, the
threat of substitutes is very high.

5. Competitive rivalry within an industry

At present, there are a huge number of companies offering the same product. The limited-service
industry defines a red ocean industry. Firms compete for market share in a saturated market.
Growth, particularly in pizza chains, is very slow so the customer base is not growing as fast as
the industry. This leads to high rivalry among firms.

12
6. References and bibliography

I. Crosson. Mary M.. Rouse Michael I.. Fry. Joseph N. and Killing. J. Peter (2009). Strategic
Analysis and Action , 7th Edition. Pearson, Prentice Hall. cap. 8

2. Gido, J. & Clemens, J.P. (2003). AdministraciOn exitosa de proyectos. Thomson. r edicien.

3. Exploring corporate Strategy. Johnson. G and Scholes. Km Thomson. e edition

4. Kerzner. Harold (2003). Project Management: A Systems Approach to Planning. Scheduling.

and Controlling (8th ed.).

5. Kaplan, R.S and P Norton. 1996. The balanced scorecard : translating strategy into action

6. Kaplan, R. S. and D. P. Norton. 1996. Using the balanced scorecard as a strategic management
system. Harvard Business Review (January-February): 75-85.

7. Pellegrinelli. S. & Bowman. C. (1994). Implementing Strategy through projects. Long Range
Planning, vol.27, n° 4, pp. 125-132.

8. Porter. M.E. (1980) Competitive Strategy. Free Press. New York. 1980.

9. Porter. M.E. (2008) The Five Competitive Forces That Shape Strategy. Harvard business
Review. January 2008.

10. Apple (2011) Development Terms and conditions Available at:

wvAv.apple.com/developmentprogrameonditions.htrn1

11. Hodge. BJ.. Anthony. W.P. & Gales. L.M. (2003). Too& dc la organizacidn. Un enfoque
estrat6gico. edicion. Pearson-Prentice-Halls

12. Sebastian. Notes The Definitive Guide to Project Management.. 2nd Ed.n. London (Financial
Times / Prentice Hall): 2007.

13