Case 6 – Domino’s Pizza: a Case Study in Organizational Evolution - Strategy

Topics: Pizza delivery, Strategic management, Pizza Pages: 16 (5183 words) Published: May 15, 2013
Assignment 2 – Individual Assignment 1
Case 6 – Domino’s Pizza: A Case Study in Organizational Evolution

Overview of Domino’s Pizza
Domino's Pizza is an international pizza delivery corporation headquartered in Michigan, United States. Founded in1960, Domino's is the second largest pizza chain in the United States and has more than 9,300 corporate and franchised stores in 65 international markets and all U.S. states. Question 1: Internal Analysis of Domino’s Pizza

The internal analysis will look into how Domino’s Pizza uses their resources to create value in their products and services while gaining a competitive advantage against their rivals. The RCC Model is used in this analysis to look into the different set of resources and capabilities that Domino’s Pizza is equipped with. Resources

Resources are made available for the use of the firm, both tangible and intangible resources while capabilities are the concerted effort to purposefully integrate resources together. In Figure 1a below, we will identify the tangible and intangible resources of Domino’s Pizza. Figure 1a

Tangible Resources
Physical 454 company-owned stores, 4,475 franchise stores and 4,422 international franchise stores Own Commissaries
Technological Niche in their ordering and delivery processes Implement mobile application or ordering
Financial Net income has increased from 2007 to 2010
Reduction in total debt over the past 4 years
US$170,000 in revenue per store for 2010
Intangible Resources
Human Resources/Leadership Strong leadership of David Brandon Inclusive management technique
One size does not fit all leadership style
Reputation No. 2 in the Top 50 U.S. Pizzerias
No. 1 in the pizza delivery segment
Known not only in U.S. but worldwide
Innovation Formulation of their own pizza recipe
Expansion of their traditional pizza only menu
“Tate” – the secluded chicken chef within a pizza company

Tangible Resources
a. Physical
Domino’s has more than 9300 locations in 65 countries. The restaurants are located across college campuses that are known to have a liking for low-cost pizza and into neighbourhoods. This allows them to reach out to a wide variety of customer base. In addition, Domino’s also have their very own commissaries that produce fresh dough on a daily basis and deliver pizza-related food and products to all company-owned stores and 99 percent of domestic franchise stores. This allows them to have better control over the food quality and control of products sold to their stores. Thus, Domino’s is able to keep their overhead costs low and provide less expensive pizza. b. Technological

Due to the rapid and ever-changing technology in this day and age, Domino’s carved out a niche for themselves in their online ordering processes that are far more attractive. Customers are able to watch a simulated photographic version of their pizza as they select a size, choose a sauce and add toppings. Domino’s website also allows customers to track orders with updates on when a pizza enters the oven or leaves a store. This high-quality online ordering system are designed to streamline both online and phone orders and they have improved accuracy and increased repeat visits while boosting revenue and profit.

c. Financial
In 2010, Domino’s revenues showed a healthy return after taking a downward movement from 2005 to 2007. Net income increased from $37.9 million in 2007 to $87.9 million in 2010. The gradual increase from 2007 to 2010 saw an annual increase in net income from 42.4 percent to 10.25 percent. In addition, Domino’s was able to reduce their total debt from $1.72 billion in 2007 to $1.45 billion in 2010. This goes to show that Domino’s is slowly moving up the ladder in terms of net income and at the same time, going slowly down the ladder in terms of debt. Domino’s revenue for their entire 9300 stores was $1.571 billion and the revenue per store is $170,000 and this is indeed...
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