Domino S
Introduction
In early 2000, Pawan Bhatia (Bhatia), the CEO of Domino's
Pizza India (Domino's) was a man in a hurry. Ever since Bhatia took over as the CEO of Domino's in November 1999, he had been frantically reworking the pizza chain's India strategy.
Bhatia was planning to open 150 new outlets by the end of
2002 covering 23 cities,1 including Bhubaneshwar (Orissa) and
Jamshedpur (Bihar). In late 1999, Indocean Chase, the private equity fund bought a 25% stake in Domino's operations in
India from the Delhi-based industrial family, the Bhartias, who held Domino's franchise in India. Domino's told investment bankers at the fund that it planned to go in for an initial public offering (IPO) in the next two years. Indocean Chase advised
Domino's to go beyond its 16 outlets in Delhi to exploit the potential in the pizza delivery business. Unless a well-thoughtout expansion plan was put into place, the IPO was unlikely to find too many takers.
As part of its expansion plans Domino's revamped its entire supply chain operations, from sourcing raw materials to shipping them for processing at a central location to delivering it to the customer's.
Initially, Domino's had a simple model. It had three selfcontained commissaries in New Delhi, Mumbai and Bangalore which bought their own wheat, tomatoes and other ingredients, processed them, then delivered them in refrigerated trucks to each outlet. However, volumes were expected to increase when Domino's planned to open new outlets. Therefore, the existing model had to be revamped.
Bhatia said, "It's crucial for us to build a low-cost supply chain operation which takes costs out of the system and in turn gives us greater pricing flexibility in the marketplace."
Analysts felt that Domino's had to rethink its supply chain operation because it was the biggest area of costs. Since 75% of Domino's customers ordered either from office or home, it did not have to lease large plots of land in prime locations to attract traffic. Instead,
In early 2000, Pawan Bhatia (Bhatia), the CEO of Domino's
Pizza India (Domino's) was a man in a hurry. Ever since Bhatia took over as the CEO of Domino's in November 1999, he had been frantically reworking the pizza chain's India strategy.
Bhatia was planning to open 150 new outlets by the end of
2002 covering 23 cities,1 including Bhubaneshwar (Orissa) and
Jamshedpur (Bihar). In late 1999, Indocean Chase, the private equity fund bought a 25% stake in Domino's operations in
India from the Delhi-based industrial family, the Bhartias, who held Domino's franchise in India. Domino's told investment bankers at the fund that it planned to go in for an initial public offering (IPO) in the next two years. Indocean Chase advised
Domino's to go beyond its 16 outlets in Delhi to exploit the potential in the pizza delivery business. Unless a well-thoughtout expansion plan was put into place, the IPO was unlikely to find too many takers.
As part of its expansion plans Domino's revamped its entire supply chain operations, from sourcing raw materials to shipping them for processing at a central location to delivering it to the customer's.
Initially, Domino's had a simple model. It had three selfcontained commissaries in New Delhi, Mumbai and Bangalore which bought their own wheat, tomatoes and other ingredients, processed them, then delivered them in refrigerated trucks to each outlet. However, volumes were expected to increase when Domino's planned to open new outlets. Therefore, the existing model had to be revamped.
Bhatia said, "It's crucial for us to build a low-cost supply chain operation which takes costs out of the system and in turn gives us greater pricing flexibility in the marketplace."
Analysts felt that Domino's had to rethink its supply chain operation because it was the biggest area of costs. Since 75% of Domino's customers ordered either from office or home, it did not have to lease large plots of land in prime locations to attract traffic. Instead,