A Case Study of Domino’s Pizza Company (Essay Sample)

A Case Study of Domino’s Pizza Company Name Institution A Case Study of Domino’s Pizza Company Introduction The operation of Domino’s Pizza began in 1960 after two brothers Tom and James Monaghan opened it in Michigan. Initially, the company had only two retail centers with a net worth of $500. With time, the company expanded to include more local stores. Currently, there are more than 4000 outlets in the United States. The first international franchise of the company came in 1983, and many more developed in the consecutive years to make the current capacity of over 2000 globally. Since then, the firm has undergone both global and regional expansion to the current state comprising of approximately 10,900 direct employees and 185,000 indirect workers. In addition, it serves over 65 markets globally making it the second largest pizza company in the world after Pizza Hub. Question One Challenges of the Fast Foods Industry Shortage and mismanagement of finances is one big problem in this sector. In that regard, many such companies grapple with issues relating to high operational costs, reduced profitability, bankruptcy, and poor profit margins. Quiznos, a Denver based enterprise is an example of fast food firm whose future was almost compromised by these hazards. Despite having over 4000 stores around the country, Quiznos neared bankruptcy due to debt woes and mishandling of investments in the supply chain. Unstable and high prices for raw materials have been blamed for low-profit margins in most stores. For instance, Domino’s Pizza experienced the rise of prices for corn, wheat, and dairy products from 2007 to 2008. High market volatility characterizes the fast food industry. This is a challenge because businesses in this niche need suitable business models, which are highly adaptable to change. Creating such strategies is resource and time consuming since it requires highly experienced and innovative leadership, and these talents and skills are rare. For example, Domino’s management team met all Thursdays in the month to build strategies for coping with high prices and stiff competition. Finally, cut-throat competition among the major players and incoming enterprises has threatened the future of many corporations in this sector. For example, increased competition in the year 2011 in the industry pushed Quiznos to near bankruptcy. Critical Success Factors in the Fast Foods Industry Experienced and creative leadership is indispensable in this industry. Taking the case of Dominos as an example, the company’s management takes credit for a significant portion of the success of the enterprise. John Macksood, the supply chain manager, in particular, takes credit for a majority of the supply chain decisions, which stabilized the company. For instance, the management decided to reduce sit-in services, and increased delivery services. This was a wise decision that saved the enterprise from stiff competition because the move cut down the costs of space, staff and dйcor. Risk management is the second success factor in the industry. Concerning that, for an enterprise to succeed in the market, it must have an emergency plans for solving significant risks prevailing in the market. In the case of Domino’s Pizza, the threat of fluctuating prices of commodities in the market informed its risk management plans, which comprised of regular meetings targeting to make informed buying decisions. Organization structure and an appropriate business model give the third critical success factor in the industry. Pizza companies must come up with highly dynamic and stable structures, which informs their strategic management decisions and the best model to suit the volatile nature of the industry. For example, Domino’s Pizza adopted the US franchise structure for its domestic operations, which aimed at making it easy for store managers to run their own business. For its international operations, the company opted for the master franchise model. Pizza companies must have excellent supply chain management to succeed. Inadequate supervision of players in the supply chain can result in the closure of some stores and conflict. Dominos opted for a franchised based business model, where stores would have the permission to source their ingredients privately, and would only purchase them from the company if they preferred. The supply chain network comprised of 19 stores in 15 states providing a nationwide coverage. Question Two Customer Centric Organization in Domino’s Pizza The company adopted a uniform company-wide policy on transparency and supply chain management. This came after the company observed that an isolated incident of misbehavior in any outlet, would harm the reputation of the whole company. Consistency among the local and international stores improved brand image and popularity in consumers. In an effort to improve its delivery services, the firm assigned every franchise a manageable distance radius, which they would be able to deliver a pizza to the customer within ten minutes or less. Secondly, the company launched new products in its menu, which were tailor made to match the consumer’s preferences. For example, the new product, named ‘the new and inspired pizza’ had additions of garlic, parsley, and butter to its crust. The product further increased the content of cheese by 40 % and was supplemented by a sweeter sauce with red pepper flavors. Additionally, the company got engaged in rigorous marketing campaigns aimed at shaping consumer perception and attitudes towards the products of the enterprise. Customer surveys informed the campaign strategies making them very efficient. Concerning that, a consumer survey sponsored by the company advised of the business' superior service delivery and the poor taste of its food products. Consequently, the campaign chose to inform the consumers of its new set of products that were of superior quality and taste, with the same excellent service levels. The rigorous campaigns also adopted an interactive approach that served to increase consumer centricity in the company further. The strategies adopted by the corporation were largely successful considering that the company registered a 14.3 % sales growth in 2010, which was the largest quarterly jump in the industry. For increased accomplishment, the company should come up with more technological platforms to engage the consumer in the future. An example of such a platform is a highly interactive website, which offers information about the company’s products and services. Moreover, the company could invest in more consumer-based market research to identify new areas that it could exploit to gain a competitive advantage. One particular area that could be of interest is consumer views towards the company on the international platform. Such information could inform strategic decisions, such as customizing menus based on the international location. Question Three Role of Digitalization Technology played a huge role in enabling the consumer centric success of the company. Firstly, technology was used during the gathering of survey data on consumer behavior. The information from the study informed many of the strategies that led to increased consumer centricity in the organization. For example, the strategy to launch new products with a more consumer focused taste developed after results from the survey were analyzed with powerful software. Secondly, technology was used to convey most of the adverts that aimed at improving customer focus. For instance, YouTube was used to relay the commercials aimed at the reinvention of the company. The company further used the comments on the platform to generate more innovative campaigns and customer responses. The company used the billboards to broadcast two hours and fifty-four minutes of consumer comments as they streamed in on its YouTube channel. Thirdly, through technology, the company was able to monitor most of the user views and respond appropriately leading to better interactions with the consumers. Fourthly, the company used digital technology to improve its ordering time, particularly during the super bowl event. Using the Pizza checker application, the company’s consumers were able to track the state of their orders during the game. The company also launched additional programs for the different types of mobile devices with different operating systems. For the Apple phones, the company launched an app that enabled users to search for the nearest stores from a given spatial locality. The application quickly became famous and was one of the three most downloaded free apps in iTunes. Lastly, the company took advantage of...