1. What are the strategically relevant components of the pizza restaurant segment of the U.S. quick service restaurant industry macro-environment?
·
The use
of mobile apps and online delivery platforms affects how pizza restaurants
reach and serve their customers.
·
Prowess
in delivery and a new initiative of contactless delivery.
·
Limited
menu and delivery of fresh, hot pizzas within half an hour
·
Introduced
pan pizza and breadstick (1993)
·
(1993)
– introduced ultimate deep dish pizza and crunchy thin crust pizza
·
(1994)
– introduced buffalo wings
·
(1996)
– launched website
·
(2004)
– opened IPO in NYSE
·
(2007)
– ordering pizza over the phone
·
(2008)
– pizza tracker; track your order
2. How have Domino’s corporate strategy
choices strengthened or weakened its competitive position in the quick-service
restaurant industry?
·
Domino’s
is the pioneer in digital technology, investing heavily in online ordering
platforms, mobile apps and delivery tracking systems. This enhanced customer
convenience and experience, strengthening its competitive position in the
digital age.
·
Dominos
has heavily focused on its delivery and take-out services, aiming to provide a
reliable and convenient option for customers looking for a quick meal. This emphasis
has bolstered its position in the industry, particularly during the COVID-19
pandemic.
3. How well is this strategy working for
Domino’s? What would a SWOT analysis reveal?
·
STRENGTH
·
Strong
digital presence and efficient online ordering system
·
Effective
supply chain management
·
WEAKNESS
·
Reliance
on franchisees may lead to inconsistency in service and quality
·
Vulnerability
to fluctuations in food prices due to cost-sensitive pricing
·
OPPORTUNITIES
·
Growing
demand for healthier and more diverse menu options
·
Leveraging
further technological advancements for enhanced customer engagement and
operational efficiency
·
THREATS
·
Intense
competition and price wars
·
Increased
health protocol
4. What does your strategic group map of the
pizza restaurant segment of the U.S. quick service restaurant industry look
like? Is Domino’s well-positioned? Please explain.
·
Price
·
Quality
·
Delivery
speed
·
Technology
integration
·
Menu
Diversity
·
Domino’s
is well-positioned in the US pizza restaurant industry. Their strength lies in
their strong focus on technology, ensuring a convenient ordering process and
efficient delivery system. The emphasis on delivery speed is a significant
advantage, especially in an industry where convenience is key. Their efforts to
improve quality and diversify their menu have allowed to cater to a broader
audience, adapting to changing consumer preferences. While they may not be the
lowest-priced option, they offer good value for the price.
·
Domino’s
has strategically positioned itself as a provider of quick, convenient, and
reasonably priced pizza with a strong focus on technology.
5. What is your assessment of Domino’s
financial performance over the 2017 – 2019 period? (Use the financial ratios in
the Appendix of the text as a guide in doing your financial analysis.)
|
|
2017 |
2018 |
2019 |
|
Market Price |
198.61 |
266.14 |
356.64 |
|
Earnings per share |
5.01 |
8.96 |
11.23 |
|
P/E Ratio |
39.64 |
38.04 |
29.93 |
(Domino's
Pizza Inc PE Ratio 2010-2023 | DPZ | MacroTrends)
·
As per the Price – to – Earnings
Ratio (P/E ratio) of Dominos from 2017 – 2019, a strong investor confidence in
the firm’s outlook and growth.
6. What strategic issues confront Domino’s in
2020? What market or internal circumstances should most concern CEO Ritch
Allison and his company’s senior leadership team?
·
The 2020
COVID pandemic has heavily impacted the restaurant industry. Lockdowns, reduced
dine-in capacity, and safety concerns affected foot traffic and forced a heavy
reliance on delivery and takeout. Domino’s had to ensure safety measures for
employees, delivery drivers, and customers while adjusting its business model
to accommodate the shift in consumer behaviours.
·
CEO
Ritch Allison and the senior leadership team at Domino’s would need to address strategic
issues by formulating and executing comprehensive strategies. This may include
adapting to changing consumer preferences, embracing technological advancements,
ensuring operational efficiency, and implementing sustainable and responsible
business practices to secure a competitive position in the market.
7. What recommendations would you make to
Ritch Allison to address the strategic issues confronting Domino’s in
2020?
·
Enhanced
Safety Protocols: Implement
and communicate enhanced safety measures to assure employees, customers, and
delivery drivers of their safety during the pandemic.
Reference
Thompson, A et al (2022) Crafting and Executing Strategy: The Quest
for Competitive Advantage, Case Teaching Note pp, 715 – 725.
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