Project EXIM (Dominos)

Intro -:

Domino's Pizza and Shyam Sunder Bhar=a and Hari Bhar=a of the Jubilant Bhar=a Group
engaged into a master franchise agreement on the advice of a friend who had other foreign
pizza licences. Incorporated on March 16, 1995, Domino's Pizza India Private Ltd. started
opera=ons in 1996. In New Delhi, the firm launched the first Domino's Pizza loca=on in India
in 1996. In 2009, the business rebranded itself as Jubilant FoodWorks Ltd.

Revenue -:

Pizza sales account for the majority of Domino's revenue, making them the company's main
source of income. Domino's also receives a sizable por=on of its earnings from franchise fees
and royal=es from its franchisee partners. The overall revenue earned by Domino's Pizza in
2018 was $3.34 billion, surpassing the money generated by the business in 2017.

Some of the highest selling products are –

• Margherita pizza
• Farmhouse pizza
• Garlic bread
• Peppy Paneer
• BBQ chicken pizza

The well-researched menu with Indianized version o^en leaves one to crave for more. The
most sought-a^er are the paneer toppings, which are rich and authen=c

Technological advancement -:

Domino's has introduced an online ordering system and provides clients with mul=ple digital
ordering op=ons in response to the growing demand from its clientele. Dominos' 30-minute
delivery guarantee—or it's free—changed the game and drew a lot of customers to their
online orders.
Addi=onally, Domino's allowed users to place orders via wearable technology.
Online ordering accounts for more than 75% of Domino's interna=onal market.
In an effort to provide quick and precise home delivery, Domino's is also exploring robot and
drone delivery abroad.
In 1998, Domino's debuted HeatWave hot bags to maintain pizzas at a consistent
temperature throughout regular delivery. Each hot bag has a patented hea=ng device inside
of it at first. mechanism that was charged by connec=ng it into the store's electrical outlet.
Pizzas are kept hot and crisp without the use of power thanks to a unique insula=on
mechanism in the newest version of Domino's HeatWave hot bags.
Because no one likes a dirty pizza, Domino's invented the robust, corrugated pizza box,
which stops moisture from weakening the box and keeps cheese from adhering to the top of
the box during delivery.

Raw material and ge7ng manufacturing done in market

In India, Dominos used a hub-and-spoke distribu=on system. The retail stores are the spokes,
and the four commissaries, manufacturing kitchens, and warehouses (Regional Centralized
Facili=es) in Delhi, Bangalore, Kolkata, and Mumbai are the hubs. A centralized "hub" is
present in a distribu=on mechanism known as the "hub and spoke model."

When it comes to Dominos, the hubs restock the outlets' raw ingredients every four days or
un=l they run out. Vegetables grown locally are purchased (delayed dis=nc=on). Inter-store
transfer, or IST, has been put in place to deal with unforeseen surges in orders during special
events when inventory is low. To keep things moving forward in these situa=ons, inventory
from a nearby store is moved to the crucial store.

Given the perishable nature of Domino's basic materials, it is impera=ve to preserve their
availability while minimizing wastage. For every outlet, about 60 raw components are
needed. A product's actual shelf life varies widely. Dough and vegetables should be eaten
within a few days; cheese within a few weeks; and canned sauces within a few months.

Several steps have been taken by Domino's Pizza to guarantee that vehicles are used to their
utmost poten=al. For instance, Domino's Pizza gets the best wheat at the lowest cost from
Jalandhar. Jalandhar wheat is transported to the closest commissary in Delhi, where it is
used to make dough. Instead of sending the empty truck back to Jalandhar, Domino's found
that Chandigarh, a city on the road, has a popula=on that is cosmopolitan and could be a
poten=al market for their products. Domino's launched a loca=on in Chandigarh as a result.
Because the cost of product delivery was modest, the entrance fee was incredibly
inexpensive.

Domino's established loca=ons in every market between its main source and commissary. A
similar procedure was used at Karnal, where the best grade cheese was sourced. Because of
its long-term connec=ons and improved demand forecas=ng, Domino's has also been able to
maintain low inventory and purchasing costs. Being one of the biggest domes=c volume
buyers of pizza-related goods including flour, cheese, sauce, and pizza boxes helps Domino's
retain rela=onships with its suppliers and makes it possible for the business to take
advantage of these rela=onships. Addi=onally, Domino's uses a hybrid procurement
approach that blends mul=-source and single-source procurement.

Modifications in product/services -:

Because they eat largely non-vegetarian food and just a small selec=on of vegetarian pizza,
the menu in interna=onal markets like the US and China offers a huge variety of non-
vegetarian alterna=ves, such as beef and pepperoni, and only has a margharita pizza in
vegetarian along with garlic bread. The introduc=on of vegan menu items can be anributed
to the growing trend of veganism in several European countries, which has forced them to
adapt.

A menu was adapted and taste adjustments were made, such as adding chilly pizzas and
tacos, which are quite popular in a market like India where the majority of people only eat
chicken and are vegetarians. Given that Indian consumers are price sensi=ve, the business
spent eight months scru=nizing every aspect of its offerings, from toppings to flour, in an
effort to cut costs and appeal to both Indian tradi=onalists and frugal diners. It then unveiled
"Pizza Mania," a 99-rupee pizza that can sa=sfy one's hunger and takes just 2.5 minutes to
prepare and 6 more to bake. Even with a locally themed menu, Domino's takes pains to
avoid becoming too regional. A^er a long =me, they started serving gourmet pizzas using
upscale ingredients in a few chosen loca=ons. These pizzas are pricey. They brought it about
because they saw that India's purchasing and spending power had grown and that many
more individuals could now afford to eat such expensive pizzas. Understanding the
psychology of value for money in India, Domino's offered en=cing deals and combos at
reasonable costs for all kinds of customers. It has employed every feasible cost-effec=ve
strategy, from supply chain management to raw material sourcing.

Government support for operations –:

The LPG policies of 1991, which allowed foreign investment into the Indian economy, were
the primary government s=mulus. This gave mul=na=onal corpora=ons in India a chance.
Addi=onally, a^er the GST was implemented, fast food is now more affordable in India due
to lower taxes and a uniform tax bracket, which was previously not the case across all states.
However, no significant changes have been made since then that could have an impact on
Dominos either way. However, Dominos has consented to collaborate with the government's
ONDC delivery program, offering roughly 30–40% cheaper costs than Zomato and Swiggy.

Profitability (In Cr)

March 19 – 322.8
March 20 – 275.45
March 21 – 233.69
March 22 – 437.52
March 23 – 356.21
Challenges in India -:

• A decrease in accounts, which is s=ll under pressure from the difficult staffing climate,
contributed to the Q2 drop in retail sales. This had opera=onal ramifica=ons for many
loca=ons, both company-owned and franchised, including shortened store hours and
difficul=es with customer service.

• Call centers are used to collect phone orders, freeing up store employees to handle carryout
and delivery orders. Promo=ons to encourage carryout traffic are also part of the effort to
address the opera=onal problems.

• In India, a highly price-sensi=ve market with more infla=on than many other markets,
including the US, Domino's is not the only restaurant focusing on prices. According to the
execu=ves, offering discounts is intended to en=ce customers to shops and applica=ons so
they may purchase addi=onal add-ons or update. The market's infla=on caused raw material
prices to rise quickly, which severely hurt profitability.

• There is fierce compe==on among Indian fast-food brands to capture market share, with
both domes=c and foreign firms par=cipa=ng. Tradi=onal Indian restaurants and other pizza
franchises present fierce compe==on for Domino's.

The logis=cal problem of ensuring =mely delivery in India arises from the country's traffic
conges=on and occasionally unpredictable road condi=ons. Therefore, they frequently find
that their pledge of a 30-minute guaranteed delivery backfires.

• India's regulatory landscape can be complicated, with several states and areas having their
own set of laws governing things like licensing, food safety, and commercial opera=ons. For
interna=onal chains such as Domino's, complying with these standards might provide
difficul=es.

Future Prospectus -:

Given that India is its largest market outside of the US in terms of the number of stores it
has, Domino's Pizza Inc. plans to drama=cally expand its network of retail loca=ons there as
it looks to capitalize on the growing demand for its goods in that country.
The plan calls for Jubilant FoodWorks Ltd., the Domino's franchise in India, to open 1,300
more loca=ons na=onwide, bringing its total number of loca=ons to 3,000. Currently, the
business operates 1,701 Domino's loca=ons in 371 ci=es.
In order to expand their network and ensure =mely pizza delivery, they want to operate
several loca=ons in the same city at the same =me.
According to Jubiliant, The decision is being made in order to streamline and op=mize in-
store processes, upgrade technology, improve opera=onal efficiencies, and open more stores
nearby. Quicker delivery of pizzas will significantly grow sales volumes, increase consumer
reten=on as well as frequency of orders and make labour cost more efficient, execu=ves at
Domino’s said.
“Domino’s is in 95 markets around the world. We have 19,000, going on 20,000 stores, and
the number one market outside of the US is India. The rate of growth is also tremendous. I
believe the goal is to open about 250 stores this year. It (Jubilant) also has a medium term
goal of geung to 3,000 stores, which is incredible for the brand. Domino’s, which first
entered the market in the late 90s, has the largest retail network for a fast-food chain. India’s
quick service restaurant market is forecast to climb to ₹534 billion by FY25 from ₹145
billion in FY21. Jubilant is also inves=ng aggressively in seung up new supply chain centres
and infrastructure. Excellent customer service is a prerequisite for QSR businesses to survive
in the fiercely compe==ve foodservice industry. This is achieved through effec=ve supply
chain management.

Industry analysis -:

The Indian food service industry is projected to develop at a Compound Annual Growth Rate
(CAGR) of 9% to reach <5.9 lakh crore by FY 2023, according to the Na=onal Restaurant
Associa=on of India (NRAI). With the development of the working popula=on, single-family
and nuclear homes, and an increase in outdoor ac=vi=es like vaca=ons and get-togethers
with friends, family, and coworkers, Indian society is changing. The frequency of ea=ng out is
being driven by these variables. The country's growing food service industry and the
domina=on of full-service restaurants in India are partly due to people's increased brand
consciousness and desire to try new foods. It is an=cipated that the organized service
sector's reputable and trustworthy brands will increase their market share in the food
service business, while the unorganized sector will shrink. In the event that a government
bailout is not provided, four out of ten restaurants will probably close permanently,
according to the NRAI. It is an=cipated that over a billion Indians, including in urban and
rural areas, will have internet connec=vity by FY 2030. India's consump=on growth trajectory
is expected to be further accelerated by digital inclusion, which would also raise public
awareness of brands, lifestyle, and health, among other topics (Source: World Economic
Forum). These elements will present fresh and fascina=ng opportuni=es for the organized
food service industry and QSR market, in addi=on to the na=on's expanding e-commerce
sector and emerging food aggregator industry. Increasing consumer awareness of health and
nutri=on has driven demand for healthier menu op=ons. The adop=on of online ordering,
delivery apps, and self-service kiosks has improved convenience for customers. In summary,
the fast food industry is a dynamic and highly compe==ve sector that faces both challenges
and opportuni=es driven by changing consumer preferences, technological advancements,
and global expansion. To thrive in this industry, companies must adapt to these evolving
trends and cater to the diverse needs of their customer base.

References -:

hDps://www.posist.com/restaurant-Gmes/features/dominos-india-sinking-ship-gasping-
breath.html
hDps://hello-68486.medium.com/the-tale-of-how-dominos-pizza-became-a-household-
name-
b498c9818a4a#:~:text=Domino%27s%20conquered%20the%20Indian%20market,lava%20c
ake%2C%20pasta%20and%20wraps.
hDps://www.moneycontrol.com/stocks/company_info/print_main.php
hDps://www.linkedin.com/pulse/customer-relaGonship-management-dominos-pizza-
ezaz-shaikh/