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Executive Summary

Domino’s is a well-known name when it comes to pizza making. It is a restaurant chain


which has its origin in America, and an international franchise, that serves and delivers
pizza. The headquarter of the company is situated at Domino Farms Office Park in Ann
Arbor Charter Township, in Michigan. It was founded in 1960 and is the second largest
pizza chain, after the Pizza hut, in America, and largest internationally. The menu of
this chain varies according to the region it is based on and they sell non-pizza items too.
To emphasize the second fact, the company has changed its name from Domino’s Pizza
to simply Domino’s. Domino's is the world's second-largest pizza company with 9,436
stores globally, 95% of which are franchised. Domino's franchisees in the U.S. market
were able to purchase fresh dough, cheese, pizza toppings, and other menu ingredients
and store supplies directly from the company-owned supply chain system. When
commodity prices became more volatile in 2007 and 2008, executives at Domino's
changed the way they worked with suppliers and franchisees to manage costs and risks,
and better leverage the assets of the supply chain system. As the company prepared to
accelerate international growth in 2011 and beyond, executives contemplated how to
best apply their purchasing and supply chain knowledge into new international markets.

Introduction:

Domino’s Pizza is the second largest Franchised pizza chain in USA., Tom James and
Monaghan bought a small Michigan Pizzeria called Dominick’s, which was jointly run
by them until James traded his share for a second-hand car. Tom revitalized the image
by changing the name to Domino’s Pizza. By the late seventies there were over 200
franchise pizza businesses in States and Domino’s Pizza was ready to go international.

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In 1983, Domino’s Pizza opened its doors in Winnipeg (Canada), and in the same year
opened its one thousandth store. The locations for Domino’s Pizza grew quickly.
Despite Domino’s Pizza springing up diverse locations, they were still a very traditional
company.

Domino’s Pizza menu had been kept very simple and streamlined; they only should one
type of pizza crust which they named the regular pizza. The pizza menu included just
to sizes of dough, it was not until much later that competition forced them to add a
medium and extra-large sized pizza. There were no much things as side orders you
could have Pizza and you could only drink a Coke with it.

In 1989, Domino’s reacted market demand first time in twenty-five years and
introduced Deep Pan Pizza. This move ensured the growth of Domino’s Pizza, as the
same year they opened their five thousandth store.

In 1992, they were to introduce the first non-pizza item to their menu, this was
obviously a reluctant move as it was bread sticks. Domino’s Pizza dough was already
on hand and the making of bread sticks is not so different. For many years, the company
had advertised that if the delivery of their pizzas took to longer than 30 minutes then
the pizza would be delivered free. This was parodied by the Teenage Mutant Ninja
Turtles movie which specified the “pizza dude has 30 seconds” to complete the
delivery. The turtle’s pizza was late and they receive a refund of $3 for “being two
minutes late, dude”. However, the benefits to Domino’s Pizza was enormous as million
of kids were hear the name of Domino’s Pizza endorsed on celluloid.

In 1993, Domino’s Pizza discounted this policy and stated that if a customer was
unhappy they could have a new pizza or a refund.

By 1994, Domino’s Pizza marketing policy widened as chicken wings were introduced
to the menu. At the same time, the company hit the African continent as they opened a
store in Egypt.

By 1996, Domino’s Pizza website was launched and the company given the pizza
industry many innovations that have now become standard. The belt driven pizza oven
was the invention of Domino’s Pizza and they began using corrugated cardboard
delivery boxes which were very effective at holding the heat within the pizza during
the delivery time. Ever mindful of the fact that a cold pizza must be about the worst

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dining experience on earth Domino’s Pizza introduced the “Heat Wave” a portable
electrical bag system that keeps the pizza hot during delivery.

Vision Statement:

 To be the best operator Domino's


Pizza system with the best talent.
 Number one in pizza.
 Number one in people.

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Mission Statement:

 Maintaining high standards of the


international chain of pizza delivery
in Mexico and provide the
experience of an excellent product
with excellent customer service.
 Exceptional People serving the best
pizza in the world.
 Sell more pizza.
 Have more fun.

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SWOT Analysis:

One of the leading pizza chains across the world, Dominos is the top contender for the
strongest Italian fast food chains. The brand has a close competitor in Pizza hut.
However, it has long overtaken Pizza hut to become the most sold pizza brand in the
market. But compared to indirect competitors like McDonalds and KFC, Domino’s still
has a long way to go. Here is the SWOT analysis of Dominos.

Strengths:

 Domino’s reached $1 billion in USA online sales in 2012 from its website, iPhone
and Android apps alone, accounting for over 60% of all sales.
 Domino’s operates stores in 70 different nations.
 International stores grew 30% from 2012 to 2016 to total 4,835 at year end 2016.

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 Backward integrated supply chain provides over 99% of supplies for franchisee
stores.
 Domino’s enjoys large economies of scale and great brand recognition.
 Domino’s is exclusively a delivery/take out business, reducing overhead by not
offering dine in space.
 PULSE touch screen ordering system allows for increased order accuracy and
provides driving directions to drivers.
 Domino’s Pizza markets their pizzas as having gluten-free crust.
 Domino’s recently introduced new Artisan pizzas, and new recipes (higher quality
products) for their crust, sauce and cheeses.

Weaknesses:

 While many fast food restaurants have added healthy options, Domino’s offers little
with respect to healthy food options such as salads or fruit.
 Domino’s does not produce a sustainability report or have a sustainability statement
on their website.
 Domino’s reported over $1.3 billion in negative stockholders’ equity at year end
2016.
 Domino’s is a relatively large company to operate under a functional type structure.
 One large slice of hand- tossed, pepperoni pizza contains 300 calories and 12 grams
of fat, and there are 8 slices in a pizza.
 No dine in option.
 Domino’s suffered a quality image before the launch of the new Artisan pizzas, and
there is some belief there remains a residual quality problem.

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Opportunities:

 Domino’s is only serving approximately 50 percent of the international market they


could possibly be serving.
 There is a steadily growing international appetite for American fast food, and an
improving global economy. Markets such as China, Russia, India, and Brazil are
still relatively untapped.
 Many customers are looking for healthier fast food options.
 College campuses and shopping malls are often frequented by young people.
 Over 16 percent of residents of the USA identify themselves as Hispanic.
 Many customers in today’s climate are willing to tolerate a degree of inconvenience
if they can get a better deal.
 Small margins in the restaurant business are the reason why so many mom-and-
pops fails.
 The current landscape in the Quick Service Restaurant (QSR) business is a bimodal
population distribution with a large population of bargain-minded customers
seeking deals on cheap fast food options, and another population of more affluent
consumers targeting middle-to-higher end restaurants.
 Domestic stores voted to increase their advertising revenue contribution to 5.5
percent in 2016.

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Threats:

 Governments potentially forcing all restaurants to label all nutrition information on


the menu at the point of sale.
 Trademark and patent protection laws are not as sophisticated in developing
countries.
 YUM Brands (parent company of Pizza Hut) revenues are over 60 percent greater
than Domino’s.
 Little Caesars was listed as the fastest growing pizza chain in 2016, with revenues
up 13.6 percent over 2012, followed by Pizza Hut’s 8 percent increase and
Domino’s 7.2 percent increase.
 Many restaurants such as Wendy’s, Subway, and even Pizza Hut offer customers
low calorie options on the menu.
 Currently, there are over 925,000 fast food service locations in the USA or one for
about every 330 people.
 Barriers to entry are relatively low for the restaurant industry, but rivalry
(competitiveness) among firms is exceptionally high.
 In the QSR industry, the bargaining power of consumers is quite powerful,
availability of restaurant options in most places are abundant, and consequently
there is intense price competitiveness among rival firms.
 Wild fluctuations in commodity prices, especially prices in dairy products since
they cannot be locked in for long periods of time, are particularly problematic for
the industry.

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 Labor is the second greatest expense in the fast food industry.

Strategy Formulation Analytical Framework:

Important strategy formulation techniques can be integrated into a three stages decision
making framework. The tools presented in this framework are applicable to all sizes
and types of the organization and can help strategists identify, evaluate and select
strategies.

 Stage I – Input Stage


 Stage II – Matching Stage
 Stage III – Decision Stage

Input Stage:

Stage I of the formulation framework consists of the EFE Matrix, IFE Matrix and the
Competitive Profile Matrix (CPM). The information derived from these three matrices
provide basic information for the matching and decision stage matrices. The input tools
require strategists to quantify subjectivity during early stages of the strategy
formulation process. Making small decisions in the input matrices regarding the relative
importance of external and internal factors allows strategists to more effectively
generate and evaluate alternative strategies. Good intuitive judgement is always needed
in determining appropriate weights and ratings.

1. EFE Matrix:
EFE Matrix is an analytical technique related to the SWOT analysis. EFE is an
acronym of the External Factor Evaluation. EFE Matrix evaluates the external
position of the organization or its strategic intents.

Opportunities Weights Ratings Score


1 Domino's is only serving approximately 50% of 0.1 4 0.4
the international market they could possibly be
serving.

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2 There is a steadily growing international appetite 0.08 3 0.24
for American fast food, and an improving global
economy.
3 Many customers are looking for healthier fast 0.08 1 0.08
food options.
4 College campuses and shopping malls are often 0.06 3 0.18
frequented by young people.
5 Over 16% of residents of the USA identify 0.02 1 0.02
themselves as Hispanic.
6 Many customers in today's climate are willing to 0.03 3 0.09
tolerate a degree of inconvenience if they can get
a better deal.
7 Small margins in the restaurant businesses are 0.02 3 0.06
the reason why so many mom and pops fail.
8 The current landscape in the Quick Service 0.05 4 0.2
Restaurant (QSR) business is a bimodal
population distribution with a large population of
a bargain minded customers seeking deals on
cheap fast food options.
9 Domestic stores voting to increase their 0.06 4 0.24
advertising revenue contribution to 5.5% in
2015.

Threats Weights Ratings Score

1 Govt. potentially forcing all restaurants to label 0.03 2 0.06


all nutrition information on the menu at the
point of sale.

2 Trademark and Patent protection laws are not as 0.02 2 0.03


sophisticated in developing countries.

3 YUM Brands revenues are over 60% greater 0.1 3 0.4


than Domino's.

4 Little Caesars are listed as fastest growing pizza 0.08 3 0.24


chain in 2015, with revenues up 13.6% over

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2012, followed by Pizza Hut's 8% increase and
Domino's Pizza 7.2% increase.

5 Many restaurants such as Wendy's, Subway, and 0.06 1 0.06


even Pizza Hut offer customers low calorie
options on the menu.

6 Currently, there are over 925,000 fast food 0.03 2 0.06


service locations in the USA or one for about
every 330 people.

7 Barriers to entry are relatively low for the 0.03 3 0.09


restaurant industry, but rivalry among firms is
exceptionally.

8 In the QSR industry, the bargaining power of 0.05 3 0.15


customers is quite powerful, availability of the
restaurant options in most places are abundant.

9 Wild fluctuations in commodity prices, 0.06 2 0.12


especially prices in dairy products since they
cannot be locked in for long periods of time, are
particularly problematic for the industry.

10 Labor is the second largest expense in the fast 0.04 3 0.12


food industry.

TOTALS 1 2.75

Domino’s received an above average EFE score of 2.75 which can be attributed largely
to the excellent job Domino’s has done with international expansion. Domino’s still
lags competitors by not offering a healthy line of menu items.

2. Competitive Profile Matrix (CPM):


CPM, or the CPM Matrix, stands for Competitive Profile Matrix and is a powerful
strategic analysis tool. CPM allows business owners, stockholders and other

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interested parties to see the strengths and weaknesses of all major competitors in an
industry on a single page.

Domino's Pizza Hut Papa John's


Pizza
Critical Success Factors Weight Rating Score Rating Score Rating Score
Advertising 0.08 2 0.16 3 0.24 4 0.32
Global Presence 0.1 3 0.3 4 0.4 1 0.1
Healthy Food Options 0.05 2 0.1 3 0.15 1 0.05
Store Locations 0.09 3 0.27 4 0.36 2 0.18
Brand Awareness 0.07 3 0.21 4 0.26 2 0.14
Dining Area 0.04 2 0.08 4 0.16 1 0.04
Financial Profit 0.12 2 0.24 4 0.48 1 0.12
Customer Loyalty 0.08 1 0.08 2 0.16 3 0.24
Market Share 0.1 3 0.3 4 0.4 1 0.1
Product Quality 0.07 2 0.14 4 0.26 3 0.21
Stockholder's Equity 0.12 1 0.12 4 0.48 2 0.24
Price Competitiveness 0.08 4 0.32 2 0.16 3 0.24
TOTALS 1 2.32 3.55 1.98

Domino’s score of 2.32 reveals a below average company with respect to Pizza Hut and
Papa John’s. Over $1.5 billion in long term debt severely impacts Domino’s
stockholders’ equity and financial profit.

3. IFE Matrix:
IFE matrix means Internal Factor Evaluation Matrix; is a popular strategic
management tool for auditing or evaluating major internal strengths and internal
weaknesses in functional areas of an organization or a business. IFE matrix also
provides a basis for identifying or evaluating relationships among those areas.

Strengths Weight Rating Weighted


Score

1 Domino's reached $1 billion in USA online sales in 0.11 4 0.44


2016 from its websites, iPhone and Android apps
alone, accounting for over 60% of all sales.

2 Domino's operate stores in 70 different nations. 0.09 4 0.36

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3 International stores grew 30% from 2012 to 2016 to 0.08 4 0.32
total 4,835 at year end 2016.

4 Backward integrated supply chain provides over 0.09 4 0.36


99% of supplies for franchise stores.

5 Domino's enjoy large economies of scale and great 0.07 4 0.28


brand recognition.

6 Domino's is exclusively a delivery/take out business, 0.04 4 0.16


reducing overhead by not offering dine in space.

7 PULSE touch screen ordering system allows for 0.04 4 0.16


increased order accuracy and provides driving
directions to drivers.

8 Domino's Pizza markets their pizzas as having gluten 0.02 3 0.06


-free crust.

9 Domino's recently introduced new Artisan pizzas, 0.05 4 0.2


and new recipes for their crust, sauce and cheese.

Weaknesses Weight Rating Weighted


Score

1 While many fast food restaurants have added healthy 0.06 1 0.06
options, Domino's offers little with respect to healthy
food options such as salads and fruits.

2 Domino's does not produce a sustainability report or 0.02 1 0.02


have a sustainability statement on their website.

3 Domino's reported over $1.3 billion in negative 0.15 1 0.15


stockholder's equity at year end 2016.

4 Domino's is relatively a large company to operate 0.05 2 0.1


under a functional type structure.

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5 One large slice of hand-tossed, pepperoni pizza 0.03 1 0.03
contains 300 calories and 12 grams of fat, and there
are 8 slices in a pizza.

6 No dine in option. 0.02 1 0.02

7 Domino's suffer a quality image before the launch of 0.08 2 0.16


the new Artisan pizzas, and there is some belief there
remains a residual quality problem.

TOTALS 1 2.88

With a score of 2.88, Domino’s is doing an above average job based on internal factors.
One area of improvement would be to develop a healthy line of menu items.

Matching Stage:

Strategy is sometimes defined as the match an organization makes between its internal
resources and skills and the opportunities and risks created by its external factors.
Matching external and internal critical success factors is the key to effectively
generating feasible alternative strategies. The matching stage of strategy formulation
framework consists of five techniques that can be used in any sequence:

 SWOT Matrix
 SPACE Matrix
 BCG Matrix
 IE Matrix
 Grand Strategy Matrix

1. SWOT Matrix:
The Strengths-Weaknesses-Opportunities-Threats Matrix is an important matching
tool that helps managers to develop four types of strategies:
 SO Strategies – Strengths-Opportunities
 WO Strategies – Weaknesses-Opportunities

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 ST Strategies – Strengths-Threats
 WT Strategies – Weaknesses-Threats

Strengths Weaknesses
SO Strategies WO Strategies
1. Add 500 new stores over the 1. Create and market a new
next 3 years in China, India and Artisan salad.
Brazil. 2. Add 500 new stores over
2. Add 500 new stores over the the next 3 years in
next 3 years in traditional traditional European and
European and Middle Eastern Middle Eastern markets.
Opportunities Markets. 3. Open 10 restaurants with a
3. Increase advertising expenses dinning area as a pilot study
from $40M to match Pizza near college campuses.
Hut’s $75M over the next 3 4. Restructure by division to
years to market the new artisan further capitalize on any
pizzas and other new products. differences in consumption
4. Offer 15% off all takeout preferences in international
orders. markets,
ST Strategies WT Strategies
1. Hire a market research firm to 1. Create and market a new
determine the value in offering Artisan salad and pizza
discounts or other marketing with lower fat cheese.
Threats strategies to combat against 2. Offer complimentary pizza
new competitors in select at events around the world
markets. as a means of introducing
2. Market to consumers more customers to the new
readily the healthier aspects of Artisan pizza recipe.
Domino’s Pizza.

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2.SPACE Matrix:

The Strategic Position and Action Evaluation (SPACE) Matrix, another important
Stage 2 matching tools. Its four-quadrant framework indicates whether aggressive,
conservative, defensive or competitive strategies are most appropriate for a given
organization. The axes of SPACE matrix represent two internal dimensions: financial
position (FP) and competitive position (CP) and two external dimensions: stability
position (SP) and industry position (IP).

FP
Conservative Aggressive
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CP IP
-7 -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 7
-1

-2 X = 0.2
Y = -2.6
-3

-4

-5

-6

-7
Defensive Competitive
SP

Internal Analysis External Analysis


Financial Position: Stability Position:
Stockholder's Equity 1 Rate of Inflation -4
Debt Equity 4 Healthy minded public -7
Current Ratio 5 Rising food prices -5
Cash Net Income 3 Competitive pressure -7
2 Barriers to entry into markets -5
Financial Position (FP) Average 3 Stability Position (SP) Average -5.6

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Internal Analysis External Analysis
Competitive Position: Industry Position:
Market Share -2 Growth Potential 6
Product Quality -4 Financial Stability 3
Customer Loyalty -5 Ease of entry into Market 2
Technological Know-how -2 Ease of obtaining Commodity contracts 2
Control-over Suppliers and Distributors -3 Profit potential 4

Competitive Position Average -3.2 Industry Position Average 3.4

Domino’s lands in the Competitive Quadrant based mostly on 1) $1.5 billion in long
term debt, 2) intense competition within the fast food industry and 3) Offering products
that are generally not a healthy food choice. Domino’s should consider adding a line
of salads to their menu to help move up the Y-Axis on the Space Matrix.

3. The Boston Consulting Group (BCG) Matrix:


Boston Consulting Group (BCG) is a large consulting firm that endured the recent
economic downturn without laying off any employees and in 2010 hire the newest
consultants ever. BCG Matrix of 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

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According to BCG Matrix, divisions of Domino’s Pizza are at the stars position which
is the high relative market share position and high industry sales growth rate.

4. Internal-External (IE) Matrix:


The IE is an important strategic tool which comes under the portfolio management
considered much similar to BCG Matrix. The IE matrix used to plot the organization
divisions in nine cell diagrams, each cell has some meaning associated which
suggest strategies.

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The Total IFE Weighted Scores
Strong Average Weak
4.0 to 3.0 2.99 to 2.0 1.99 to 1.0
4.0 I II III

High 3

3.0 IV V VI
2

The
EFE
Total Medium Domino's
Weighted
Scores

2.0 VII VIII IX

Low

1.0

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Business Segment Revenue Revenue Revenue
2016 2015 2014
1 Domestic Company owned stores $324 $336 $345
2 Domestic Franchise 195 187 173
3 Domestic Supply Chain 942 928 876
4 International 218 201 176
TOTAL $1,679 $1,652 $1,571

Domino’s Domestic Supply Chain segment is the true gem of all the segments.
Backward integrated and serving 99% of domestic franchisees with their products is a
recipe for an enduring revenue stream. While company owned stores have more
revenue than either domestic or international franchises, much of Domino’s long-term
debt problem is associated with these stores. Finding franchisees to place into these
stores would be a viable strategy for Domino’s.

5. The Grand Strategy Matrix:


Comprehensive, long-term plan of essential actions by which a firm plans to achieve
its major objectives. Key factors of this strategy may include market, product,
and/or organizational development through acquisition, divestiture, diversification,
joint ventures, or strategic alliances.

Rapid Market Growth

Quadrant II Quadrant I

Weak Strong
Competitive Competitive
Position Position

Quadrant III Quadrant IV

Slow Market Growth

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Domino’s is clearly experiencing rapid growth, especially internationally; however,
their competitive position is unclear lying somewhere between Quadrant I and II.
While the company has many more locations and a much better international
presence than Papa John’s, Pizza Inn, and Little Caesars, the overriding debt
problem is a concern. Yum Brand’s Pizza Hut still remains supreme among pizza
chains. Paying off debt would be a viable strategy for Domino’s management.

The Decision Stage:

Analysis and Intuition provide a basis for making strategy-formulation decisions. The
matching techniques just discussed reveal feasible alternative strategies. Many of these
strategies will likely have been proposed by managers and employees participating in
the strategy analysis and choice activity. Any additional strategies resulting from the
matching analysis could be discussed and added to the list of feasible alternative
options. Participants could rate these strategies on a 1 to 4 scale, so that a prioritized
list of the best strategies could be achieved.

1. The Quantitative Strategic Planning Matrix (QSPM):


Quantitative Strategic Planning Matrix (QSPM) is a high-level strategic
management approach for evaluating possible strategies. QSPM provides an
analytical method for comparing feasible alternative actions. The QSPM
method falls within so-called stage 3 of the strategy formulation analytical
framework.

Continue Robust Develop a line


International of Healthy
Expansion Menu Options
Opportunities Weight AS TAS AS TAS
1 Domino's is only serving approximately 50% 0.10 4 0.40 1 0.10
of the international market they could possibly
be serving.

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2 There is a steadily growing international 0.08 4 0.32 2 0.16
appetite for American fast food, and an
improving global economy.
3 Many customers are looking for healthier fast 0.08 1 0.08 4 0.32
food options.
4 College campuses and shopping malls are often 0.06 0 0.00 0 0.00
frequented by young people.
5 Over 16% of residents of the USA identify 0.02 0 0.00 0 0.00
themselves as Hispanic.
6 Many customers in today's climate are willing 0.03 0 0.00 0 0.00
to tolerate a degree of in-convenience if they
can get a better deal.
7 Small margins in the restaurant businesses are 0.02 0 0.00 0 0.00
the reason why so many mom and pops fail.
8 The current landscape in the Quick Service 0.05 0 0.00 0 0.00
Restaurant (QSR) business is a bimodal
population distribution with a large population
of a bargain minded customers seeking deals
on cheap fast food options.
9 Domestic stores voting to increase their 0.06 0 0.00 0 0.00
advertising revenue contribution to 5.5% in
2015.

Threats Weight AS TAS AS TAS


1 Govt. potentially forcing all restaurants to label 0.03 1 0.03 4 0.12
all nutrition information on the menu at the point
of sale.
2 Trademark and Patent protection laws are not as 0.02 0 0.00 0 0.00
sophisticated in developing countries.
3 YUM Brands revenues are over 60% greater than 0.10 3 0.30 2 0.20
Domino's.
4 Little creasers are listed as fastest growing pizza 0.08 4 0.32 3 0.24
chain in 2015, with revenues up 13.6% over 2012,
followed by Pizza Hut's 8% increase and
Domino's Pizza 7.2% increase.
5 Many restaurants such as Wendy's, Subway, and 0.06 1 0.06 4 0.24
even Pizza Hut offer customers low calorie
options on the menu.

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6 Currently, there are over 925,000 fast food 0.03 3 0.09 1 0.03
service locations in the USA or one for about
every 330 people.
7 Barriers to entry are relatively low for the 0.03 1 0.03 2 0.06
restaurant industry, but rivalry among firms is
exceptionally.
8 In the QSR industry, the bargaining power of 0.05 0 0.00 0 0.00
customers is quite powerful, availability of the
restaurant options in most places are abundant.
9 Wild fluctuations in commodity prices, especially 0.06 0 0.00 0 0.00
prices in dairy products since they cannot be
locked in for long periods of time, are particularly
problematic for the industry.
10 Labor is the second largest expense in the fast 0.04 0 0.00 0 0.00
food industry.

Continue Robust Develop a line


International of Healthy
Expansion Menu Options
Strengths Weight AS TAS AS TAS
1 Domino's reached $1 billion in USA online 0.11 0 0.00 0 0.00
sales in 2016 from its websites, iPhone and
Android apps alone, accounting for over 60% of
all sales.
2 Domino's operate stores in 70 different nations. 0.09 4 0.36 1 0.09
3 International stores grew 30% from 2012 to 0.08 4 0.32 1 0.08
2016 to total 4,835 at year end 2016.
4 Backward integrated supply chain provides over 0.09 0 0.00 0 0.00
99% of supplies for franchise stores.
5 Domino's enjoy large economies of scale and 0.07 2 0.14 3 0.21
great brand recognition.
6 Domino's is exclusively a delivery/take out 0.04 0 0.00 0 0.00
business, reducing overhead by not offering
dine in space.
7 PULSE touch screen ordering system allows for 0.04 0 0.00 0 0.00
increased order accuracy and provides driving
directions to drivers.
8 Domino's Pizza markets their pizzas as having 0.02 1 0.02 4 0.08
gluten -free crust.
9 Domino's recently introduced new Artisan 0.05 1 0.05 2 0.10
pizzas, and new recipes for their crust, sauce and
cheese.

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Weaknesses Weight AS TAS AS TAS
1 While many fast food restaurants have added 0.06 1 0.06 4 0.24
healthy options, Domino's offers little with respect
to healthy food options such as salads and fruits.
2 Domino's does not produce a sustainability report 0.02 0 0.00 0 0.00
or have a sustainability statement on their website.
3 Domino's reported over $1.3 billion in negative 0.15 4 0.60 3 0.45
stockholder's equity at year end 2016.
4 Domino's is relatively a large company to operate 0.05 0 0.00 0 0.00
under a functional type structure.
5 One large slice of hand-tossed, pepperoni pizza 0.03 1 0.03 4 0.12
contains 300 calories and 12 grams of fat, and
there are 8 slices in a pizza.
6 No dine in option. 0.02 0 0.00 0 0.00
7 Domino's suffer a quality image before the launch 0.08 0 0.00 0 0.00
of the new Artisan pizzas, and there is some belief
there remains a residual quality problem.
TOTALS 3.21 2.84

According to QSPM comparison product development strategy should be implemented


because of high total value.

Recommendations:

 Increase advertising expenses by $35M over the next 3 years to market the new
Artisan pizzas and other new products.
 Establish new franchisees for 1000 new stores over the next 3 years; (200 in Russia,
200 in India, 200 in China, and 400 in Europe/Middle East) for a cost of $100M.
(many of these connections are already established).
 Hire a market research firm to assess the feasibility of adding new healthy options
to the menu for a cost of $5 million.

Total Amount of Funds Needed = $140M

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