Papa John's Case Analysis
Case Analysis
Papa John’s
14. What are the current production and purchasing (functional) strategies?
Papa John’s currently follows a low cost differentiation strategy for its production policy.”The low cost differentiation strategy concentrates on quality in operations when the cost of doing so is real low.” (Parnell, 2008). Papa John’s manufactures its own sauce and dough in their quality control centers to ensure quality. They also purchase all of their fresh ingredients from their quality control centers. By doing this they are saving on cost and ensuring their product will be of the best quality. The Company’s domestic QC centers consist of 9 full-service regional production and distribution centers and one distribution-only center, supply pizza dough, food products, paper products, small wares and cleaning supplies twice weekly to each restaurant throughout the contiguous United States. (reuters.com). These centers are highly automated which cuts down on labor costs however their production on a business level is fairly labor intensive since pizzas are made individual and to order and then delivered. The R & D department is constantly trying out new recipes and testing out new products.
Papa John’s follows the differentiation strategy for purchasing. The differentiation strategy means purchasing high quality inputs, even if they cost more. Since Papa John’s only use fresh, high quality ingredients they are paying a higher price than some of their competition. This is all part of the their goal of having “better pizza, better ingredients” it provides a better quality pizza for its customers but comes at a higher price. At the business level the individual stores use a just in time method to order things from the commissaries or quality centers. The just in time method is an inventory system in which suppliers deliver parts just at the time they are needed by the buying organization to use in its production process. This is a way the company saves
Papa John’s
14. What are the current production and purchasing (functional) strategies?
Papa John’s currently follows a low cost differentiation strategy for its production policy.”The low cost differentiation strategy concentrates on quality in operations when the cost of doing so is real low.” (Parnell, 2008). Papa John’s manufactures its own sauce and dough in their quality control centers to ensure quality. They also purchase all of their fresh ingredients from their quality control centers. By doing this they are saving on cost and ensuring their product will be of the best quality. The Company’s domestic QC centers consist of 9 full-service regional production and distribution centers and one distribution-only center, supply pizza dough, food products, paper products, small wares and cleaning supplies twice weekly to each restaurant throughout the contiguous United States. (reuters.com). These centers are highly automated which cuts down on labor costs however their production on a business level is fairly labor intensive since pizzas are made individual and to order and then delivered. The R & D department is constantly trying out new recipes and testing out new products.
Papa John’s follows the differentiation strategy for purchasing. The differentiation strategy means purchasing high quality inputs, even if they cost more. Since Papa John’s only use fresh, high quality ingredients they are paying a higher price than some of their competition. This is all part of the their goal of having “better pizza, better ingredients” it provides a better quality pizza for its customers but comes at a higher price. At the business level the individual stores use a just in time method to order things from the commissaries or quality centers. The just in time method is an inventory system in which suppliers deliver parts just at the time they are needed by the buying organization to use in its production process. This is a way the company saves
References: Parnell, John (2008). Strategic Management Theory and Practice. Reuters.com Papa John’s International Inc. (Pizza.O)