Dominos Pizza Enterprises - Case Study Example

Domino’s pizza Enterprises Name Course: Tutor: Institution: Date: Executive Summary This report is a review of the Domino pizza Enterprises in the market. In this case, the report offers a SWOT analysis review in the market. On one hand, the organizational strength lies in its market expansion approach. A weakness analysis reveals that the organizational reduced international presence negates its market profitability option. Moreover, the report establishes that the organization faces an increased market opportunity in the global market. Finally, the report establishes that the organization faces market threats with competitors and changing consumer behaviours. In addition, the report offers strategic improvement recommendations including product diversification, direct market investments, and online marketing. Table of Contents Executive Summary 2 Table of Contents 3 1.0 Introduction and Background 4 2.0 SWOT Analysis 4 Domino’s pizza Enterprises SWOT Analysis 4 2.1 Strength 5 2.2 Weakness 5 2.3 Opportunities 5 2.4 Threats 6 3.0 Strategic Recommendations 6 3.1 Healthy Dieting Customer Base 7 3.2 Product Diversification 7 3.3 Direct Investment Approach 8 3.4 Online Marketing 9 4.0 Conclusion 9 Appendices 11 Appendix 1: Domino’s pizza Enterprises SWOT Analysis 11 References 12 1.0 Introduction and Background The global market is gradually changing with increased market expansion and strategic marketing approach development. This has necessitated need to improve and expand organizational systems in the industry. Among the affected industries is the fast food industry that faces both legal and customer culture changes. This has increased the need for strategy changes to enhance organizational performance (Eboreime and Adedoyin, 2013, p.298). This report offers a review of the Dominos pizza Enterprises case on the status through a SWOT analysis. Consequently, the report identifies a new viable customer base and the subsequent marketing efficiency strategic requirements. 2.0 SWOT Analysis Domino’s pizza Enterprises SWOT Analysis 2.1 Strength The organization has a major strength in its adoption of a franchise diversification approach. In this regard, the organization has developed a strong network with organizations and business in the supply chain. As a result, Carland, James and Carland (2003, p.98) stated that the organization has enhanced its increased expansion and growth in the pizza distribution sector. Due to these franchise businesses, the organization experiences increased sales at reduced expansion costs. Consequently, this has enabled the organization increases its profitability and shareholder value. To this effect, Domino Pizza ltd achieves its strategic shareholder value maximization through increased profitability in the market. 2.2 Weakness Despite its adoption of the franchise expansion approach, the organization faces increased market challenges with respect to its global presence and demerits of the franchise market expansion approach. On one hand, the organization has a minimal global expansion and presence. In this case, despite its increased franchise strategy, the organization remains confine in the USA market. As the Business Wire (2012) publication states, this has led to its loss of potential business opportunities in the growing and economically potential Asian market. This has negated on its increased profit margins in the economy. 2.3 Opportunities In an analysis on the industrial performance, it is apparent that the Asian and Eastern Europe markets have increased market expansion opportunities. In this case, the market has a growing market opportunity that presents availability for strategic expansion for Domino’s pizza Enterprises. In particular, the organization has a growth potential in both the Chinese and German markets respectively. These markets despite the presence of a growing market have minimal competition, making them ideal for profits maximization (“Investment Weekly News”, 2012, p.304). 2.4 Threats A threats analysis reveals that Dominos Pizza Enterprises faces an increased market threat from competition as well as the growing market changes due to the emergence of lifestyle diseases related to poor dieting. On one hand, the organization faces increased challenges and competition from the well-established fast food companies. Among such fast food, restaurants with a global presence as well as sufficiently developed infrastructure include KFC. Such organizations due to their increased mass production sales have reduced per unit cost of production that enhances low selling costs and subsequent increased profitability (“Business Wire”, 2007, p.19).On the other hand, the organization faces increased sales decline threat due to increased healthy dieting culture in the market. 3.0 Strategic Recommendations The above SWOT analysis on Domino pizzas reveals that the organization through its current strategic strengths has a growth potential to expand and increase its profit margins. In this regard, this report offers strategic recommendations for improvements in the organization. In this case, the report identifies a strategic new customer segment that the organization can invest in. Moreover, it presents strategic marketing strategies that the organization can adopt in serving the identified new market as well as in serving the existing customer base. 3.1 Healthy Dieting Customer Base The global market is changing with the increased lifestyle and culture changes. Grier, Sonya and Kumanyika, Shiriki (2008, p.1618) conducted a study to evaluate the nature and extent of culture and lifestyle changes in the global market. In this regard, the study sought to establish the relationship between the traditional perceptions on the fast food industry to a current perception. In its hypothesis, the study argued that the perception has increasingly changed. Indeed the study established that the perception has changed with the subsequent healthy dieting culture growth. Consequently, it established that a large customer base is seeking for the alternative healthy fast foods. In this case, this analysis establishes the existence of new customer base in which few have invested. Other than McDonald’s, non-other ha invested in this new customer segment. Consequently, targeting this new customer base will not only increase the organization in an increased market presence, but also increased profitability. 3.2 Product Diversification The current pizzas supplied by the organization are especially protein rich especially from animal proteins. A study by Olmstead (2009, p.330) revealed that excess intake of animal proteins had increased negative health implications. The study revealed that excessive intake of the proteins resulted to the experienced lifestyle diseases such as young age heart attacks, obesity, and blood pressure. As such, the study recommended the development of alternative fast food ingredients. In this regard, this report recommends the adoption of this strategy. In order to capture the new target market, the organization should adopt the product marketing mix approach. Through this approach, the organization should diversify on its distributed product range and variety. As such, it should include ingredients that are protein free in its produce lines. Its market competitor McDonald in India, where the organisation incorporated vegetable fast foods in its recipe, can benchmark this in the activities. Through this strategy, the organization will benefit on two fronts. On one hand, the organization will increase its market influence through acquiring a new-added customer base that will increase its sales volume and consequently its revenues. On the other hand, the organization will insulate itself against losing its current customer base to the new healthy eating culture revolution. This will act as a proactive measure in ensuring retained market competitiveness in the future. 3.3 Direct Investment Approach As it stands, the organization relies on the adoption of the franchise market expansion approach. In this case, the organization contracts franchise enterprises and form alliances with them to enhance increased market presence. However, the adoption of this strategy reduces the organizational relationships with its customers. Sashi and Devi (2002, p.454) argued that the franchising business acquisition is high and the continued loyalties increase the organizational operating expenses. Therefore, it is apparent that Dominos pizza enterprises incur increased franchising costs that reduce on its profit margins. Consequently, this report recommends the adoption of the direct investment approach for the organization. In this case, the organization should open up branches in the region to allow for increased market expansion. As such, the distribution outlets would be managed and operated under the organizational business model. As Srinivasan, Kalaivani and Ibrahim (2011, p.233) argue, direct investment in organizations allows for increased market influence and increased customer relations in the market. Through the adoption of this approach, the organization will enhance its market influence and enhance customer satisfaction that will increase the organizational profitability levels. This will serve as an ideal pricing marketing mix strategy to enhance the organizational strategic performance. Customer relations are long-term organizational investments that ensure increased and continued organizational market influence into the future. 3.4 Online Marketing The global market is changing and continuously evolving. In this regard, marketing efficiency and approaches are hedged on not only the obtained returns but also the convenience and the developed public relations reputation. Traditionally, marketing was perceived as a profit oriented approach geared towards increasing the financial performance and profitability levels in the short run period. However, this role has evolved to incorporate the concept of public relations in marketing. In this case, Gürel and Kavak (2010, p.43) argued that marketing role has expanded to incorporate non-financial gains such as enhancing organizational societal reputation and public relations. To this effect, this report recommends the adoption of alternative marketing approaches. In this regard, the report recommends on the use of the online platform as a marketing tool. As such, the organization will benefit from the use and adoption of the online platform. 4.0 Conclusion In summary, this essay revels that Domino pizza Enterprises has an increased market growth potential. Although not among the fast food giants in the global platform, the organizational operational and marketing strategies offer it a viable market competitive edge. In this regard, the industry has an increased potential due to its adoption of the franchising marketing approach. However, the analysis reveals that the organization faces an increased market weakness due to its reduced global presence in the industry. In addition, the analysis reveals that the organization has an increased market potential in the Asian and Eastern Europe markets such as China and Germany. Finally, the SWOT analysis establishes that the organization faces increased industry competition from established organizations as well as the changing lifestyle dieting culture. In order to remedy this challenge, the report recommends targeting of the new developed market segment in the industry. In this case, the report singles out the vegetarian fast food segment as one among the neglected segments. In order to succeed and enhance efficiency in the market, the report recommends the adoption of product line diversification, direct investment, and online marketing. Conclusively, this report argues that through the adoption of these recommendations, Domino pizzas Enterprises will increase its market influence. Appendices Appendix 1: Domino’s pizza Enterprises SWOT Analysis References Business Wire, 2012, Research and Markets: Domino's Pizza, Inc: Leisure and Arts Company Profile, SWOT & Financial Report, New York. Business Wire, 2007, Learn about the Fast Food and Consumer Catering Markets in China, New York. Carland, James W.Jr & Carland, J.C. 2003, "Pawn Takes Queen: The Strategic Game board In Entrepreneurial Firms", Academy of Strategic Management Journal, vol. 2, pp. 97-109. Eboreime, O.F. & Adedoyin, S.A. 2013, "Strategies for Making Competition Irrelevant in the Global Market for Developing Economies", Journal of Emerging Trends in Economics and Management Sciences, vol. 4, no. 3, pp. 297-301. Grier, Sonya A,PhD., M.B.A. & Kumanyika, Shiriki K,PhD., M.P.H. 2008, "The Context for Choice: Health Implications of Targeted Food and Beverage Marketing to African Americans", American Journal of Public Health, vol. 98, no. 9, pp. 1616-29. Gürel, E. & Kavak, B. 2010, "A conceptual model for public relations in museums,” European Journal of Marketing, vol. 44, no. 1, pp. 42-65. Investment Weekly News, 2012, "Research and Markets; Domino's Pizza, Inc. - Strategy and SWOT Report", 2012, Investment Weekly News, pp. 304. Olmstead, A.L. 2009, "The First Line of Defense: Inventing the Infrastructure to Combat Animal Diseases", The Journal of Economic History, vol. 69, no. 2, pp. 327-357. Sashi, C.M. & Devi, P.K. 2002, "Franchising in global markets: Towards a conceptual framework", International Marketing Review, vol. 19, no. 4, pp. 499-524. Srinivasan, P., Kalaivani, M. & Ibrahim, P. 2011, "An empirical investigation of foreign direct investment and economic growth in SAARC nations", Journal of Asia Business Studies, vol. 5, no. 2, pp. 232-248. Read More