DOMINO’S PIZZA

Atacan Garip
1303041042

Ankara
2017
Content
Company Background ............................................................................................................................. 4
Overview.............................................................................................................................................. 4
Strategic Posture ..................................................................................................................................... 4
Vision ................................................................................................................................................... 4
Proposed Vision Statement ............................................................................................................. 4
Mission Statement .............................................................................................................................. 4
Mission Analysis .............................................................................................................................. 4
Proposed Mission Statement .......................................................................................................... 4
Goals .................................................................................................................................................... 4
Objectives ............................................................................................................................................ 5
Strategies ............................................................................................................................................. 5
Corporate Governance ............................................................................................................................ 5
Organization Structure ........................................................................................................................ 5
Board of Directors ............................................................................................................................... 5
Top Management ................................................................................................................................ 5
External Environment .............................................................................................................................. 6
Competitive Profile Matrix (CPM) ....................................................................................................... 6
External Factor Evaluation (EFE) Matrix .............................................................................................. 6
Internal Environment .............................................................................................................................. 7
Internal Factor evaluation (IFE) Matrix ............................................................................................... 7
Strategic Factors’ Analysis....................................................................................................................... 8
Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix .......................................................... 8
Strategic Position and Action Evaluation (SPACE) Matrix ................................................................... 8
Boston Consulting Group (BCG) Matrix ............................................................................................... 9
Internal-External (IE) Matrix .............................................................................................................. 10
Porter’s Five Forces ........................................................................................................................... 10
GRAND Strategy Matrix ..................................................................................................................... 11
Quantitative Strategic Planning Matrix (QSPM) ................................................................................ 12
Strategy Formulation............................................................................................................................. 13
Recommended Strategies ................................................................................................................. 13
Market Development .................................................................................................................... 13
Product Development ................................................................................................................... 13
Market Penetration ....................................................................................................................... 13
Marketing Strategies ..................................................................................................................... 13
Cost-Leadership ............................................................................................................................. 13
 Reward System .............................................................................................................................. 13
Online Sales ................................................................................................................................... 13
Strategy Evaluation ............................................................................................................................... 14
References ............................................................................................................................................. 15
Company Background
Overview
Domino’s is the second largest pizza restaurant in the world and operates in more than 85 markets.
On average, Domino’s sales are more than 1.5 pizzas each day globally. Tom and James brothers
purchase the “DomiNick’s” pizza stores and entered the pizza business in 1960. In 1965, Tom was the
only owner and renamed the store as “Domino’s Pizza”. The company has franchising system that
has 200 stores in 1978. Today, Domino’s has more than 13,800 stores and 5,000 of them are at
outside the US.

Domino’s Pizza consists of four business segments that are:

• Domestic Company-Owned Stores

• Domestic Franchise
• Domestic Supply Chain
• International

The main competitors of the company are Pizza Hut, Papa John’s, Little Caesars, and local pizza
producers. In addition, there are many substitute product that compete with Domino’s Pizza. These
are McDonald’s, KFC and so forth.

Strategic Posture
Vision
Domino’s Pizza currently has not the vision statement.

Proposed Vision Statement

To be the best pizza company that focused on customer satisfaction

Mission Statement
Exceptional Franchisees and team members (6) to be the best pizza (2) delivery (7) company in the
world. (3)

Mission Analysis
Domino’s Pizza Mission statement do not include the all mission statement criteria that are
customer, technology, concern for survival, growth and profitability, concern for public image, and
concern for employees.

Proposed Mission Statement

Exceptional Franchisees and team members (6) to be the best pizza (2) delivery (7) company in the
world. (3) Whoever wants (1) to taste our pizzas can reach us any time with the technology they
have. (4) In this way, we can grow more quickly (5) and fulfill our responsibilities toward our
customers, our employees (9) and our society. (8)

Goals
Creating innovative pizza that meets the customer expectations.

Win back lost customers

To increase reporting communications

Improve the taste of the pizzas to satisfy customers

Objectives
Getting customer attention in a good way

Increasing the pizza sales by 15% at the end of the year

Open 25 pizza stores or franchising in the Europe market

Increase sales revenue by 8% percent comparing the last year

Strategies
To achieve more growth and strengthen the company’s competitive position, the company focus on
the implementation of following issues:

• Execution of the mission statement

• Grow our leading position in an attractive industry
• Leverage our strong brand awareness
• Expand and optimize our domestic store base
• Continue to grow our international business

Corporate Governance
Organization Structure

Board of Directors
David A. Brandon is the Chairman of the Board of Directors. The board of directors of the company
consists of eight people with Brandon.

Top Management
David A Brandon is the Chairman and J. Patrick Doyle is the President and Chief Executive Officer of
the company. There are four Chief Officer in Domino’s Pizza and totally, top management of the
company consists of fourteen people with Chairman and CEO.
External Environment
Organization’s Opportunities and Threats

Competitive Profile Matrix (CPM)

The main competitors of Domino’s Pizza are Pizza Hut and Papa John’s. In Competitive Profile Matrix,
Domino’s Pizza and its rivals were compared. Pizza Hut has power among competitors in terms of
critical success factors.

Domino's Pizza Hut Papa John's

Critical Success Factors Weight Rating Score Rating Score Rating Score
Advertising 0,09 3 0,27 3 0,27 3 0,27
Healthy Food Options 0,04 2 0,08 3 0,12 2 0,08
Global Existence 0,10 3 0,30 4 0,40 1 0,10
Store Locations 0,08 3 0,24 4 0,32 2 0,16
Eating Area in Stores 0,05 1 0,05 4 0,20 1 0,05
Brand Awareness 0,13 3 0,39 4 0,52 2 0,26
Financial Profit 0,11 2 0,22 4 0,44 1 0,11
Customer Loyalty 0,09 2 0,18 3 0,27 2 0,18
Market Share 0,09 3 0,27 4 0,36 1 0,09
Product Quality 0,07 3 0,21 3 0,21 2 0,14
Top Management 0,06 2 0,12 2 0,12 2 0,12
Price Competitiveness 0,09 4 0,36 2 0,18 3 0,27
Totals 1,00 2,69 3,41 1,83

External Factor Evaluation (EFE) Matrix

EFE matrix identifies the Opportunities and Threats of Domino’s Pizza. According to EFE score,
Domino’s is capable to respond to opportunities and threats in the marketplace.

(EFE score is greater than 2,50)

Opportunities Weight Rating Weighted Score

1 Expansion into New Markets 0,08 2 0,16
2 Growing Fast-Food Market 0,12 4 0,48
3 Population of India and China 0,11 2 0,22
4 New Preferences in Pizza 0,05 4 0,2
5 Most of the people are actively using online sales 0,07 2 0,14
Threats Weight Rating Weighted Score
1 Direct and Indirect Competition (Pizza Hut and McDonalds) 0,15 4 0,60
2 Substitute Products 0,15 3 0,45
3 Changing habits in food choices 0,07 3 0,21
4 Increasing costs 0,08 2 0,16
5 Local pizza seems as better quality 0,12 2 0,24
Total EFE Score 1,00 2,86
Internal Environment
Organization’s internal strengths and weaknesses

Internal Factor evaluation (IFE) Matrix

IFE matrix is used to evaluate the Strengths and Weaknesses of Domino’s Pizza. The IFE score clarifies
that Domino’s is at the good position to use its strengths and reduce its weaknesses.

(IFE score is greater than 2,50)

Weighted
Strengths Weight Rating
Score
1 Strong Brand Equity 0,15 4 0,60
2 Proven Business Model (Franchising) 0,09 4 0,36
3 Strong Marketing 0,05 3 0,15
4 Product and Technological Innovation 0,07 3 0,21
5 Supply Chain System 0,10 4 0,40
6 Quick Delivering System 0,10 4 0,40
7 Pricing Range 0,05 3 0,15
8 Online Food Ordering System 0,05 3 0,15
Weighted
Weaknesses Weight Rating
Score
1 Calorie of Products 0,06 2 0,12
2 Awareness of Food Nutrition 0,10 1 0,10
3 Not being able to sit down for in-house dining 0,08 1 0,08
4 Staff career restriction 0,03 2 0,06
5 Decreasing Sales in Mature Market 0,07 2 0,14
Total IFE Score 1,00 2,92
Strategic Factors’ Analysis
Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix
SWOT matrix is used to generate strategies based on company’s strength, weakness, opportunity
and threat.

SO Strategies
1 Creating new types of pizzas to meet the preferences of customers (S4, O4)
Increase marketing expenditure to gain more market share in fast-food
2 market(S3,O2)
3 Increase sales over the Internet order by providing special promotions (S8, O5)
4 Using Franchising in India and China to gain competitive advantage (S2, O3)
ST Strategies
1 Reducing the product price to compete with substitute product (S7, T2)
With well-defined marketing strategy and brand power, "act local" strategy should
2 be used.
3 Gaining competitive advantage with directing people to use tech. (S4, T1)
WO Strategies
1 In India and China operations, dining area should be applied as a pilot (W3, O3)
2 Producing new pizza varieties with new and low calorie vegetables (O4, W1, W2)
WT Strategies
1 Producing healthier product to catch the habits of customers (W1, T3)
2 Reducing the price of product to increase sales and gain competitive adv. (T1, W5)

Strategic Position and Action Evaluation (SPACE) Matrix

SPACE matrix is used to evaluate the Domino’s Pizza in terms of Financial, Stability, Competitive and
Industry positions.
Domino’s Pizza is at the Aggressive quadrant same as the market leader – Pizza Hut. The
company should use its strength in marketplace. It can be seen as following Pizza Hut, but it
is necessary. Market development, penetration and product development strategies are
suitable for Domino’s. Forward integration is another option for the company.

Boston Consulting Group (BCG) Matrix

BCG matrix clarifies the Domino’s Pizza divisions in terms of its Relative Market Share Position and
Industry Sales Growth Rate. Domino’s Pizza has mainly three divisions which are:

➢ Domestic Company Owned Stores

➢ Domestic Supply Chain
➢ Franchising (combination of Domestic and International)

According to BCG matrix, divisions of the Domino’s Pizza are at the Stars position which is the high
relative market share position and high industry sales growth rate.
It means that Domino’s has large market share in the fast-growing industry. Stars position generates
huge amount of cash; however, it requires the investment of cash as well. In this point, Domino’s
should apply the strategies that holds its position in the market. Because when market is maturated,
company will be at Cash Cow position that requires little or no investment to generate cash.

Internal-External (IE) Matrix

IE matrix clarifies the Domino’s Pizza divisions in terms of its IFE and EFE scores.

For IE matrix, Domestic Supply chain of the company is at good position. To maintain its position,
cost leadership strategy should be applied. In addition, %99 of the franchisees of the company use
this domestic supply chain for better cost and premium system. Domino’s Pizza should continue to
implement this strategy to maintain its position also.

For the Franchise business that includes domestic and international franchises, maintaining
strategies should be applied, because currently Domino’s is the second biggest player in its market.
Market penetration strategy should be applied to gain more market share.

For Domestic Company Owned Stores, the company should open new stores in Asia. Franchising is
good option for the company, but Domino’s should also think the control over market and its stores.

Porter’s Five Forces

Bargaining Power of Customers

Very high bargaining power because fast-food market is not expensive and market growth rate is
high

Bargaining Power of Suppliers

For Domino’s Pizza, supplier power is so low because Domino’s has its own supplier system

Low dependency on supplier

Threat of New Entrants

Opening pizza stores is very easy

There are powerful brands in the market

Threat of Substitute Product

There are many substitute product in market such as hamburger, chicken and so forth

Competitive Rivalry within an Industry

There is a high competition among competitors

There are many number of companies that provides the pizza.

GRAND Strategy Matrix

GRAND matrix clarifies the Domino’s Pizza divisions in terms of its Market Growth and Competitive
Position.

All of the company’s divisions are being strong competitive position. For domestic supply
chain, Domino’s should continue to apply its current strategies that are low-cost and reward
system.
Franchise business has rapid market growth and our business has competitive advantage. For
this reason, concentric diversification could be implemented. In addition, Product and Market
Development strategies should be implemented.
Quantitative Strategic Planning Matrix (QSPM)
QSPM is used to evaluate the two strategies that are optional. Product Development and Market
Development strategies are evaluated in terms of SWOT values of the Domino’s Pizza.

Product Market
Development Development

Strengths Weight AS TAS AS TAS

1 Strong Brand Equity 0,15 4 0,60 4 0,60
2 Proven Business Model (Franchising) 0,09 2 0,18 4 0,36
3 Strong Marketing 0,05 1 0,05 3 0,15
4 Product and Technological Innovation 0,07 4 0,28 2 0,14
5 Supply Chain System 0,10 2 0,20 2 0,20
6 Quick Delivering System 0,10 2 0,20 3 0,30
7 Pricing Range 0,05 3 0,15 2 0,10
8 Online Food Ordering System 0,05 1 0,05 2 0,10
Weaknesses Weight AS TAS AS TAS
1 Calorie of Products 0,06 4 0,24 1 0,06
2 Awareness of Food Nutrition 0,10 4 0,40 1 0,10
3 Not being able to sit down for in-house dining 0,08 1 0,08 2 0,16
4 Staff career restriction 0,03 1 0,03 1 0,03
5 Decreasing Sales in Mature Market 0,07 3 0,21 4 0,28
Opportunities Weight AS TAS AS TAS
1 Expansion into New Markets 0,08 4 0,32 4 0,32
2 Growing Fast-Food Market 0,12 4 0,48 4 0,48
3 Population of India and China 0,11 3 0,33 4 0,44
4 New Preferences in Pizza 0,05 4 0,20 2 0,10
5 Most of the people are actively using online sales 0,07 1 0,07 1 0,07
Threats Weight AS TAS AS TAS
Direct and Indirect Competition (Pizza Hut and
0,15 4 0,60 4 0,60
1 McDonalds)
2 Substitute Products 0,15 4 0,60 3 0,45
3 Changing habits in food choices 0,07 4 0,28 2 0,14
4 Increasing costs 0,08 2 0,16 3 0,24
5 Local pizza seems as better quality 0,12 3 0,36 1 0,12

TOTALS 6,07 4,45

According to QSPM comparison, product development strategy should be implemented because of

high total value.
Strategy Formulation
Recommended Strategies
Market Development
Domino’s is the second position of its market in terms of international and domestic area. The
company operates more than 50 countries. However, there is a great opportunity in Asia countries.
There are high population in those countries and people spent more money for fast-food staff.
Expanding into those markets will be good return in terms of financial and market share. Opening
new franchisees or company-owned stores would be effective strategy.

Product Development
Nowadays, consumption habits of people are changed. They prefer healthier product in
consumption. Also, low calorie products are more demanded due to obesity. For these reasons,
creating new types of product will meet the customer expectations and increase sales of the
company especially in maturated markets. On the other hand, Domino’s Pizza focuses on pizza
product. Producing products that can be consumed with pizza will increase the variety and sales.

Market Penetration
Currently, Domino’s Pizza is the second biggest company in its market. Pizza Hut is the leader and
there are so many competitors in market. Penetration on those markets would increase the market
share of the company. Because franchising business has high market growth and in that growth,
Domino’s Pizza can increase its market share. Providing promotion and reducing the cost would be
option that Domino’s Pizza can be able to do that.

Marketing Strategies
The marketing expenditure of the company is the half of the Pizza Hut’s expenditure. To compete
with market leader, Domino’s Pizza should increase its marketing expenditure. For the developing
countries, “act local” marketing strategy should be implemented to seem as local company and
reduce the effect of domestic pizza producers. For the developed countries, Domino’s should focus
on mobile sector. Small online videos, coupons and reward systems are the options and less costly
strategies that Domino’s is able to apply.

Cost-Leadership
Domino’s has domestic supply system. This means that the supplier of the company is itself. The
company can easily effect on costs. This cost issues effects the price of the products. In developing
markets, reducing cost would meet the customer expectations because of lower income than
developed countries. In developed markets, reducing cost effects the competition because many of
the rivals cannot be able to reduce their costs. In addition, to compete with substitute product, sales
price is very important because consumer’s choice mostly depend on price of the products.

Reward System
Domino’s actively uses premium system on its franchisees and customers. It returns company as a
good revenue. To increase that and effect customers, premium system features should be expanded.
Domino’s Pizza can provide free gift cards on special days, free drink for tenth order and so forth.

Online Sales
Many of the individuals uses online sales. The company should direct customers to online shopping.
With doing to, company can use reward systems effectively. On the other hand, Chinese people
spent $750 on online sales last year. This is another opportunity for the company in China market.
These strategies help the company to remain its position in marketplace. Pizza Hut is leader and the
owner of the Pizza Hut, YUM! Organization has many brands that provides financial stability and
flexibility. On the other hand, Pizza Hut has strong cash flow when compared with Domino’s Pizza.
These differences effect the operations, strategies and activities that Domino’s tried. Lastly, these
main competitors are at the fasting-growing industry with the near company growth rates. This
means that the distance between the two companies will remain the same overall. The best case for
the Domino’s Pizza is to remain the market position and increase the market share as much as
possible.

Strategy Evaluation
Benchmarking is the excellent way to evaluate the Domino’s Pizza, because it is the second biggest
player in the market and Pizza Hut is in pretty good condition.
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