Domino's Pizza Inc. is a company that primarily operates in the delivery and carryout segments of the pizza industry. Domino's is publicly held, and is traded on the NYSE under the ticker symbol DPZ (NASDAQ, 2017). Domino's is currently in a strong financial position, with a net income that is growing at a steady rate. For example, Domino's 2014 annual net income was $162,600,000, their 2015 annual net income was $192,800,000, and their 2016 annual net income was $214,700,000 (Domino's Pizza Inc., 2016). Domino's has a strong brand awareness, which helps them to be a strong competitor against the other major players, but it's not quite enough to make them the leader of the pizza restaurant industry. Domino's currently holds 11.5% of the market share, which proves they are above Papa John's International Inc. and Little Caesar's (which hold 6.6% and 8.8% of the market share respectively). However, Domino's is currently behind Pizza Hut Inc., which holds 13.0% of the market share (IBISWorld, n.d.). The pizza restaurant industry has been experiencing a steady growth over the last five years, which largely has to do with the technological advances that have taken place within the industry. Domino's has grasped onto online ordering, and claims that more that 50% of the company's orders are placed online (IBISWorld, n.d.). Overall, the industry's revenue growth from 2006 to 2016 has increased by 3.4%, going from $38,749,700,000 to $45,069,300,000 (IBISWorld, n.d.).
Company Strategy: Mission/Vision, Goals/Values
Domino's mission is, “...to be the best pizza delivery company in the world,” and they plan on accomplishing this with the help of its “exceptional” employees (Domino's Pizza Inc., n.d.). Currently, “Domino's is the second largest pizza restaurant chain in the world, with more than 14,200 locations in over 85 markets,” and in the long-term, Domino's vision is comprised of them being the largest pizza restaurant chain in the world (Domino's Pizza Inc., n.d.). Domino's mission statement and vision, which is in a large regard an extension of the mission statement clearly and accurately defines why Domino's exists and where they are going in the long-term. Domino's vision also appears to be realistic. According to Pizza Today, one of the leading pizza magazines, as of 2016 Domino's is currently second to Pizza Hut on the list of largest pizza restaurant chains with 13,000 store locations to Pizza Hut's 16,063 and their gross sales were $9,600,000,000 in 2016 to Pizza Hut's $13,700,000,000 (Pizza Today, 2016). Moreover, as reflected in their operations, with an appropriate long-term strategy Domino's mission and vision seems viable and does not appear to be exaggerated. Additionally, Domino's mission is evident in their business conduct, and more specifically, in their marketing, where they created a “Fun Facts” page to showcase their innovations and rapid improvements in their overall business. For example, in an effort to become the best pizza delivery company, “70% of the items on Domino's menu are new since 2008” (Domino's Pizza Inc., n.d.).
The main way Domino's aims to move forward with its goals is “...through a unified voice… by empowering, educating, and passionately representing the franchise community” (Domino's Pizza Inc., n.d.). In doing this, Domino's puts great focus on their employee and customer development. As CEO Patrick Doyle states “The pursuit of our goal to be #1 for customers and #1 for our franchise is relentless” (Domino's Pizza Inc., 2016). By the end of 2017, Domino's plans to have completely finished its remodeling process. The company adopted this new store design in 2013, shifting to a layout that enables customers to see their food as it is being made in front of them (Domino's Pizza Inc., 2016). Along with goals, Domino's values play a major role as the company continues to work toward its vision. A key value of the company is to produce the best food at a cheaper price than other restaurants, all while maintaining quality standards. This contributes to the growing customer loyalty and global satisfaction. Many other values focus on exceptional customer treatment, creativity and promotion to continue expanding and competing in the fast food market (Domino's Pizza Inc., n.d).
Three of the largest stakeholder's for Domino's all are affiliated with the company, whether on the executive board or the board of directors. First and foremost is J. Patrick Doyle, President and CEO of the corporation. He has been working at Domino's since its beginnings, slowly working his way up the ranks. Known for revamping the taste of Domino's pizza, Doyle has earned the respect of the rest of the company and is counted upon for making smart business decisions (Buss, 2017). Next is the President of the U.S. branch, Russell Weiner. In 2014 he was promoted from Chief Marketing Officer where he created a new style of menu at each restaurant, in turn raising $8 Billion for the company. His experience with marketing helped to promote him to president of the U.S. jurisdiction and gives Domino's a competitive advantage due to Weiner's innovation with advertising (Gesenhues, 2014). The third largest stakeholder is Andrew Balson, a native of Boston, MA. Serving on the board of directors for Domino's as well as the executive committee for Bain Capital, he offers a multitude of insight into financial decisions for the company (Bloomberg, n.d.).
Corporate Social Responsibility
Domino's has been practicing corporate social responsibility since 2013 when they first introduced a new plan of action. They focus on great tasting food, happy employees, satisfied customers, and a clean environment. To further elaborate, Domino's has been recycling and reusing its materials, leaving only 5% of their waste to go to landfills (Domino's Pizza Inc., 2014). The company also has been heavily involved in charitable foundations within communities. In 2014, Domino's worked extensively with Rays of Sunshine, an organization that grants wishes to children with severe illnesses. They also send nearly 20% of their donation money to the Special Olympics in an effort to boost participation and interest in the non-profit (Domino's Pizza Inc., 2014).
Domino's has an extremely strong brand image worldwide, allowing for strong profit margins in an increasingly competitive industry. As one of the founders of the pizza delivery business models, Domino's has retained its position as one of the industry leaders in part because of its strong brand awareness on the global markets (Domino's Pizza, Inc., 2015). Another core competency of Domino's is the consistency of the quality of its products due to the vertical integration of its supply chain into company operations (Domino's Pizza, Inc., 2015). Dough manufacturing and internal supplies are all handled by Domino's, ensuring that the quality of its products are never in flux due to changing suppliers or oscillating market status. A third core competency of Domino's is its inexpensive startup costs for each independent store due to the relatively small operational area of each store and the lack of a dining area, focusing more on delivery and a carry-out design (Domino's Pizza, Inc., 2015). This business model emphasizes maximum profit carried out in a minimum amount of space. Expensive restaurant facilities and staff are not required for a Domino's store due to the carry-out and delivery model, therefore lowering the operational cost of each store compared to competitors such as Pizza Hut.
Product Description: Product Overview,Value Proposition, Alignment with Competitive Advantage
When J. Patrick Doyle became the new CEO of the company, one of the first things he did was redo the recipe for both the pizza as well as the cheesy bread, as they were notoriously bad tasting before. The pizza comes in four different sizes, ranging from a six inch personal one, to a fifteen inch extra large. The company also offers a variety of doughs and toppings to create custom orders. Some of the most popular choices are pepperoni, mushrooms, philly steak, and hawaiian. Cheesy bread doesn't have any different choices of toppings, but it is still ordered with many meals due to its great taste and simple, popular ingredients. Aside from the appetizing factor, Domino's has also revolutionized customer ordering. If a customer doesn't wish to order over the phone or in the store, they can log onto www.dominos.com, create their custom order online, enter payment information, and then submit. In less than an hour, the delivery will bring reach their location, and the bill and tip will have already been paid. This simple, fast, and efficient way of placing orders has caused Domino's to gain popularity and boost their sales, especially amongst those who are looking for a cheap and easy alternative to lunch or dinner.
The old value proposition used the phrase, “You get fresh, hot pizza delivered to your door in 30 minutes or less - or it's free,” introduced the new value of “Time” to the product (Crossfield, 2007). The company has grown apart from this original saying due to safety issues in the delivery process but the concept still holds true. Domino's focuses on providing value in their pizzas by incorporating high-quality ingredients and efficiently delivering them made-to-order (Domino's Pizza Inc., n.d.). Domino's pizza provides customers with the value of quality pizza for a quality price but most importantly, it's the time of delivery that is the biggest value adder.
The benefit of Domino's pizza is that it supplies the customer with food quickly and satisfies the functional need to eat but it also holds psychological benefits because it tastes good and can be made-to-order. Domino's also emphasizes making the process of ordering and receiving your pizza as easy and effortless as possible. There is the cost of time but with Domino's, they are known for incredibly fast delivery times which trump many of their competitors. There is the cost of the price but Domino's pizza prices are no more expensive than other pizza delivery businesses in the industry. From the customer's viewpoint, there is a lot more value and benefit than there are costs when it comes to Domino's pizza.
The distinctive competency of Domino's has to be the unique delivery and tracking system of their pizza orders. By 2013, Domino's developed a system that allowed customers to place their favorite order in as few as five clicks taking roughly 30 seconds (Domino's Pizza Inc., 2016). They have introduced the Domino's Tracker® that appeals to many customers because it allows them to track their orders from an app on their smartphones or from the Domino's website. Domino's has also developed other innovative ordering methods using twitter and text messaging. These unique ordering and delivery tracking methods definitely represent a distinctive competency for domino's that differentiates them from their competitors.
The products differential benefit could be the new recipe introduced in 2009 and the flexibility of product innovations across multiple global markets (Domino's Pizza Inc., 2016). This reinvented pizza recipe has and will hopefully continue to show an increase in sales and customer reorder rates as Domino's tries to keep one step ahead of the competition. Domino's pizza products have the advantage of being able to change and innovate given the specific global market needs and tastes. There is an alignment between the distinctive competency and the product's differential benefit. Both allow for an increase in value for customers from ordering to delivering and finally consumption of the product. An effective and innovative ordering system backed by a new and flexible product taste allows Domino's pizza to possess more value than its competitors.
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