Situational Analysis of Dominos Pizza - Case Study Example

Reflection on Group Assignment Name University Introduction Domino’s pizza, which is a multinational company that specializes in providing fast food products and mainly pizza in particular offers both delivery and dine-ins for its customers. Through the course of their development, they encompass technology in their provision of services and products like development of smartphone application which facilitate efficiency in ordering system (Tang and Tang, 2012). Having conducted a research on its macro environment and the competition status including market analysis, SWOT analysis was also carried out to reveal various underlying internal and external influences to the business (Abdi et al, 2013). This retrospect paper seeks to provide a reflection on the power of the franchise including pricing and location which facilitate Domino’s pizza’s strategic positioning in the venture. Discussion While conducting research on Domino pizza, I realized that they are among the most successful pizza chain not only in Australia but worldwide in general. Having over 570 outlets within Australia, they are able to provide delivery and takeaway faster than their rivals (Powell and Nguyen, 2013). Through the analysis of the study, one realizes that Domino’s pizza being the one of the largest restaurants in the united states, it does not deal with pizza preparation and delivery as the name may suggest but it also encompasses other products like sandwiches, boneless chicken, salads, pasta, breadsticks, wings among many other dessert items (Tang and Tang, 2012). In the view of consumer behavior, Domino’s pizza has taken consideration of the satisfaction of their customers’ needs by providing high quality products and services at the retail. Through conducting regular market analysis, they are in a better position to understand the prevailing market forces including anticipating for changes in customer interests and preferences (Huang and Sarigöllü, 2014). I also noticed that Domino’s pizza has streamlined its food processing chain to process foods with low carbohydrates to reduce levels of obesity in the United States and world in general. This factor has been one of their mains competitive advantage placing them in a better position ahead of their main competitors like McDonalds, Burger King among other Chinese restaurants (Krishna, 2014). In addition, preparation of food with low calories has made Domino’s pizza more appealing to their consumers which has boosted their sales greatly allowing them to consider options like preparation of organic pizza for the satisfaction of their customers’ needs (Bansal and Taylor, 2015). I also established that Domino’s pizza does not only depend on domestic market but also has strong international markets that greatly depend on the geographical locations of Domino’s pizza operation targets (Hsu and Chan, 2015). Having generated an iconic brand via its dominance in pizza delivery, Domino’s pizza has developed well over 12530 stores worldwide as at the end of 2015 therefore strengthening its supply chain globally (Powell and Nguyen, 2013). Domino’s pizza has also formed links with other global markets throughout Africa, Australia, Canada japan, United Kingdom among others which has accelerated its international market expansion. One also establishes that Domino’s pizza offers quality pizza at affordable prices from $8 and a base meal at $20. These prices have been regulated excluding delivery fee to ensure that the pricing is not open to negotiation by the customers to ensure that the profit margins are kept intact so as not to generate losses (Bansal and Taylor, 2015). Through the analysis of market share, it is evident that Domino’s pizza owns about 60 percent of pizza delivery market share (Huang and Sarigöllü, 2014). This is facilitated by the fact that they have 1117 franchised and corporates stores offering fast food in Australia and over 12530 stores worldwide. I noticed that the success of Domino’s pizza is not only hinged on the number of customers they have but also the seamless supply chain they possess in their activities (Keller, 2012). With Domino’s pizza being in a position to purchase raw materials from well-established suppliers, they are able to get enough supplies to their franchised and corporate stores faster since they embrace decentralized supply and therefore getting the materials on time for the preparation of the food. Besides, having strong bargaining power ensures that they gain 63% profit for dominating the supply chain ((Powell and Nguyen, 2013). Bearing in mind the fact that their consumers are of mixed social status in the community, Domino’s pizza provides both cheap and premium pizza with mini pancake and garlic bread chips for dessert ((Hsu and Chan, 2015). Having introduced new exciting products like pulled beef, pulled pork pizza in both Australia and New Zealand which have reduced sugar and fat levels but supplemented with unique flavor, they have been able to gain new markets since many people were afraid of getting obese due to fats ((Powell and Nguyen, 2013; Hsu and Chan, 2015). The distribution channels incorporated by Domino’s pizza have been streamlined to ensure that the products get to the final consumers using minimum time and costs to ensure the profit margin is kept intact and also providing timely delivery ensures their company is regarded as reliable in terms of delivery (Bansal and Taylor, 2015). Since Domino’s pizza distribution channel does not involve any intermediaries, they are in a better position to offer their products at affordable prices since there are no extra costs included due to wholesalers and retailers (Hsu and Chan, 2015). Moreover, since the orders can be placed online, it is possible to conduct distribution in a large market without customers overcrowding at the outlets. Through this distribution situation I found out that Domino’s pizza has three main channels of delivery including delivery, dine-in and online ordering. Since they have expansive parking lot and clean large space for dining, Domino’s pizza is able to provide dine-in services to their customers without much hustles (Bansal and Taylor, 2015). This channel is advantageous to both the consumers and premises since Domino’s pizza is able to gain customer loyalty due to face to face interaction with their clients while at the same time the customers enjoy cheaper prices since they do not have to incur delivery costs (Huang and Sarigöllü, 2014). The other two channels are closely linked in that the success of online ordering depends on the delivery of the ordered products to the customers. Having the customers log onto the restaurant’s websites is advantageous to the restaurant since they are able to view the advertisement placed on the website while having the pleasure to view the entire menu and downloading of special coupons. As discussed by Huang and Sarigöllü, 2014, one notices that the success of this channel is almost 100% since the website can attract more customers due to the technological advancements that allow the website to provide ads on search engines and therefore reach more customers who might not be within the outlets reach and therefore will have their orders delivered at their doorstep (Tang and Tang, 2012). Reviewing the literature by Krishna, 2014, indicates that Domino’s pizza has developed a strong brand name in the business venture. Due to this its reputation has improved which has facilitated its strong competitive advantage over other new rivals (Keller, 2012)). Besides, though it may not be largest quick food outlet, it has considerable market share of about 10.9% has boosted its ranking worldwide and therefore attracting more customers even compared to larger rivals (Huang and Sarigöllü, 2014). Within Australia, I established that Domino’s pizza faces stiff competition from Pizza Hut having 270 stores within Australia and Papa John’s international Inc. (Hsu and Chan, 2015). since both competitors aim at gaining more customers and raise more revenue, they concentrate on satisfying their customers’ needs and therefore they provide the best ingredients and quality products. This has led to Pizza Hut having a market share of 23.3% and Papa John’s having 7.3% whereas Domino’s pizza has 10.9% market share (Krishna, 2014). The macro environment in which Domino’s pizza operates has had deeper infiltration from the modern society. Due to this, the fast food industry provides their products and services at stadiums, drive-ins and schools among other modern scenarios which has toppled off the catering in the traditional macro environment (Powell and Nguyen, 2013). Due to the stereotyping about fast food, most people find it difficult to consume fast food due to health precautions (Schlosser, 2012). Therefore, Domino’s pizza has redesigned its menu to ensure that they provide healthier fast food products like less sugar and fats. While conducting SWOT analysis on Domino’s pizza restaurants, I realized that Domino’s pizza has strong supply chain apart from having global outlets for distribution of their products (Abdi et al, 2013). Moreover, within the macro environment, Domino’s pizza has incorporated new products like fatless and sugarless pizza and new sales channels which has made the restaurant more popular among the consumers. These among other factors contribute to Domino’s pizza’s strengths. As discussed by Abdi et al, 2013 under application of SWOT, it is clear that due to competition from larger multinational fast food chains like McDonalds, Domino’s pizza has low market shares. Besides, the cost Domino’s pizza has to incur in developing more stores worldwide is tremendous and these forms the greater part of the weaknesses faced by Domino’s pizza (Abdi et al, 2013). Furthermore, Domino’s pizza can take advantage of these weaknesses and conduct more online ordering and delivery distribution technique and cut down costs on physical stores expansion (Tang and Tang, 2012). As a matter of fact, I noticed that Domino’s pizza is presented with vast opportunities like the new technology used in production which has reduced production costs and therefore the restaurant is able to provide pizza at affordable prices for its customers (Abdi et al, 2013). Similarly, the diverse menu available for fast food industry has led to the business booming and therefore since Domino’s pizza does not only deal exclusively in pizza but also other fast food products, it has competitive advantage against its rivals and can easily gain more market shares (Bansal and Taylor, 2015). Contrariwise, I established that Domino’s pizza is faced with several threats like limitation in the culture and the fast changing eating habits by the consumers (Hsu and Chan, 2015). This can be countered by Domino’s pizza conducting regular market analysis and research to ensure that they have the latest information in the prevailing market so as to anticipate any changes in the tastes and preferences of their customers besides incorporating culture in their products offered in each specified location (Abdi et al, 2013). Conclusion To sum up, through the study on Domino’s pizza, I realized that they have greater competitive advantage against their rival since they embrace variety in the products they offer (Tang and Tang, 2012). Contrary to what the name may suggest, I established that the also deal in fast food products like winds, pasta and also provision of healthier sugarless and fatless products. It is also revealed that due to its seamless supply chain, they are able to generate more profits which allow them to expand their outlets worldwide (Abdi et al, 2013). Having encompassed about three distribution channels, Domino’s pizza is able to provide their products and services at minimized prices without making loses while gaining more customers and customer loyalty (Huang and Sarigöllü, 2014). In conducting SWOT analysis, it is evidenced that Domino’s pizza has stores globally forming strong supply and distribution chain which contributes to the restaurant’s strengths (Abdi et al, 2013). Similarly, due to the expansion of the global stores, the costs incurred and the low market shares of the restaurant are the main weaknesses the restaurant has (Tang and Tang, 2012). Furthermore, diversification of the menu and the booming fast food industry facilitated by the new production technology present opportunities for the expansion of the business for Domino’s pizza (Abdi et al, 2013). On the contrary, I realized that the fast changing eating habits among the consumers due to stereotyping about fast food industry pose a threat to the success of the restaurant which can be taken advantage of by offering sugarless and fatless products that most clients prefer to be healthy (Schlosser, 2012). References Abdi, A., Ashouri, M., Jamalpour, G., & Sandoosi, S. M. (2013). Overview SWOT analysis method and its application in organizations. Singaporean Journal of Business Economics and Management Studies, 1(12), 69-74. Bansal, H. S., & Taylor, S. (2015). Investigating the relationship between service quality, satisfaction and switching intentions. In Proceedings of the 1997 Academy of Marketing Science (AMS) Annual Conference (pp. 304-313). Springer International Publishing. Hsu, Y. C. P., & Chan, F. (2015). Surveying Data on Consumer Green Purchasing Intention: A Case in New Zealand. International Journal of Business and Social Research, 5(5), 01-14. Huang, R., & Sarigöllü, E. (2014). How brand awareness relates to market outcome, brand equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113- 132). Springer New York. Keller, K.L. (2012) Strategic Brand Management, Building, Measuring, and Managing. Krishna, K. (2014). Analysing Competition in the Quick Service Restaurant Industry. Available at SSRN 2402180. Powell, L. M., & Nguyen, B. T. (2013). Fast-food and full-service restaurant consumption among children and adolescents: effect on energy, beverage, and nutrient intake. JAMA pediatrics, 167(1), 14-20. Schlosser, E. (2012). Fast food nation: The dark side of the all-American meal. Houghton Mifflin Harcourt. Tang, T. W., & Tang, Y. Y. (2012). 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