S Mngt
Level 3
Feb 2018-June 2018
MAJAN UNIVERSITY COLLEGE
Accredited to the University of Bedfordshire, United Kingdom
FACULTY OF BUSINESS MANAGEMENT
STUDENT ASSIGNMENT COVER SHEET
Module Name and Level
Strategic Management, Level 3
Module Code
Assessment No.
Assessment Type & weighting:
STUDENT MCUC NUMBER:
Please note that a grade will only be given to
those whose student number is noted on this
form. Please ensure that the student numbers
from all group members are recorded
accurately.
Submission Date:
MODULE TUTORS:
BC 31-3
Assessment 1
Group Assessment (60% weighting)
14/04/2018
Dr. Udayanan & Dr.Hussein
DECLARATION
• The work contained in this assignment is my own and that all materials and sources used have
been acknowledged.
• I/We have not copied or colluded in part or in whole, or otherwise plagiarised the work of
other students.
• This assignment has not been submitted for previous assessment in any other subject or to a
substantial extent has been accepted for the award of any other unit, module, degree or diploma
of a university or any other institute, except where due acknowledgement is made in the text.
• I/We confirm that I/we have read, understood and followed the guidelines for assignment
submission and presentation provided by the lecturer.
• I/We understand that this assignment may be retained on the database and used to make
comparisons with other assignments in future.
• I/We have made a copy of my assignment
• This work may be photocopied and/or communicated for the purpose of identifying
plagiarism.
• I/We give permission for a copy of this marked assignment to be retained by the faculty of
Business Management for the purpose of course reviews by external examiners and to be used
as a resource by Majan College.
• I/We understand that unauthorized late submission without a valid written extension will be
marked as per the college policy mentioned in the students handbook page 16 section 4.4.2.
Majan University College
Page 1
S Mngt
Level 3
Feb 2018-June 2018
Strategic Management (BC 31-3)
Assessment I -Group Report + Viva
(60% weighting)
You are required to critically analyze ‘DOMINO’S' case and write a report covering the following
tasks:
1. Analysis of the global fast food retail industry (quick service restaurant) focusing on the strategic
opportunities and threats to Domino’s. Highlight the strengths and weaknesses of Domino’s.
2. A detailed study of the food retail industry using Porter’s five forces highlighting Domino’s
competitiveness. Analyse Domino’s present generic strategies and its implications.
3. Evaluation of Dominos strategic capabilities using VRIN framework.
4. Critical evaluation of the growth strategies adopted by Dominos (Use Ansoff’s framework).
Your report must be focused, must demonstrate extensive reading. You must critically examine the
relevant issues. Descriptive answers would not fetch the higher grades. The following criteria will be
used to evaluate your written analysis:
Analysis of issues and
Understanding of concepts
Referencing and use of proper referencing style
Research rigor
Structure, Vocabulary and Cohesiveness of the written analysis
Note:
•
Assessment I carries 60% weighting and constitutes the submission of a written report (40%
weighting of) and a Viva Voce (20% weighting of the module).
•
Students have to ‘pass’ both the written component as well as the viva to pass the assessment.
INSTRUCTIONS (for written case analysis)
•
The written Case Analysis has 40% weighting in this module.
Majan University College
Page 2
S Mngt
Level 3
Feb 2018-June 2018
•
This is a Group Assignment and a group shall consist of 4 or 5 students.
•
The written analysis of the case should be in the report format and not exceed 3000+/-10%
words.
•
A reference list in Harvard style must be included
•
All assignments must be adhered strictly to the deadlines specified by Majan College. Failure to
hand in the assignment for any reason and without prior approval and a valid written extension
from the module tutor will not be marked and will be awarded a grade G (0) irrespective of the
quality of the work. (See student handbook Section 4.4.2.)
•
Unacknowledged use of work of others (plagiarism) is regarded as a dishonest practice and will
be will be penalized. (See the penalties in the student handbook Section 5.7)
INSTRUCTIONS (Viva Voce)
•
The Viva Voce has a 20% weighting in this module.
•
The Viva Voce will be based on the written case analysis, submitted by the group.
•
The Viva Voce is expected to last 10-15 minutes.
•
The group should be formally dressed for the Viva Voce.
•
The group is advised to make note of the marking criteria and prepare accordingly.
•
The Viva Voce Schedule will be published on MOVE .
Additional Guidelines
•
•
•
•
•
•
The Assignment Submission link on MOVE will be open, a week ahead of the submission date.
You can submit your assignment multiple times, till the submission deadline. Note that Turnitin
could take upto 24 hours to produce similarity reports for submissions.
The last submission, within the deadline, will be considered as your final submission.
Assignments should be submitted by 6 pm on the day of the deadline. There is a grace period until
midnight to allow for technical difficulties, but any assignment submitted after this will be considered
as a late submission. Technical problems will not be accepted as an excuse for a late submission.
The similarity percentage of your final submission will be one of the factors considered, for assessing
the originality of your assignment. However, the decision to report an assignment for plagiarism is
taken by the Lecturers, who mark your assignment.
The Lecturers will consider a number of factors such as Assignment type, part of the assignment
where similarity occurs, nature of similarity etc., along with the similarity percentage of your
assignment to assess the originality of your assignment. Therefore, similarity percentage
would not be accepted as a basis for disputing academic judgments regarding plagiarism.
Majan University College
Page 3
S Mngt
•
Level 3
Feb 2018-June 2018
Note that the similarity percentage of your submission can change till the submission deadline, if the
submissions of other students have similarity to your assignment. Therefore, the similarity
percentages are not final, until the assignment submission is closed.
Old grading System (Before Feb 2015)
GRA
DE
A+
A
GRADE
POINT
16
DESCRIPT
ION
15
Excellent
A-
13
B
12
•
•
•
•
•
14
B+
GENERAL ASSESSMENT CRITERIA
•
•
•
•
•
Very Good
B-
•
11
•
C+
10
C
9
•
•
Good
C-
•
•
•
8
•
D+
7
D
6
D-
5
E
4
Pass
Refer
Majan University College
•
•
•
•
•
•
•
•
•
An outstanding piece of work.
Shows evidence of wider reading and originality
Strongly analytical. All important points are covered.
Arguments should be supported by examples and evidence,
objectively presented and evaluated,
Well-structured and well written, without noticeable
grammatical or other errors.
Correctly referenced
Very good work.
All main points will have been covered, though minor issues
may have been omitted.
The work will be analytical, balanced and soundly based.
Examples and supporting evidence should have been
included.
The writing should be essentially correct, without major
grammatical or other errors.
Generally referenced correctly.
Generally good work.
Most points will have been covered, but many finer points
will generally have been missed.
Shows limited reading.
Arguments/analysis should be basically well structured and
balanced with relevant examples, but with errors and gaps.
The writing is clear, but has errors that nevertheless do not
obscure the meaning.
Referencing will be present but may at times be inaccurate
or insufficient.
Satisfactory.
Shows sufficient grasp of the subject to be acceptable.
Tends to be descriptive.
Examples and evidence is likely to be weak and limited.
Shows limited reading.
Referencing is likely to be absent or very poorly carried out.
Unsatisfactory/ Compensatable fail.
Serious errors and omissions.
Very little analysis
Page 4
S Mngt
Level 3
•
Feb 2018-June 2018
F
2
F-
1
•
Work of a very poor standard with little relevant information
and/or serious errors.
Work containing little of merit
G
0
•
No work submitted
GRADE
A+
A
AB+
B
BC+
C
CD+
D
DE
F
FG
Majan University College
Fail
Old grading System (before Feb 2015)
GRADING SLAB
GRADE POINT
Range of Marks in %
16
86 to 100
15
76 to 85.9
14
70 to 75.9
13
67 to 69.9
12
63 to 66.9
11
60 to 62.9
10
57 to 59.9
9
53 to 56.9
8
50 to 52.9
7
47 to 49.9
6
43 to 46.9
5
40 to 42.9
4
35 TO 39.9
2
20 TO 34.9
1
0 TO 19.9
0
NA
Page 5
S Mngt
New
Level 3
Feb 2018-June 2018
Grading System (Starting Feb. 2015)
Grad
e
Lette
r
A+
A
A-
Mark Band
%
80-100
75-79
70-74
Grade Descriptor
•
•
Outstanding
Excellent
•
•
•
B+
B
B-
67-69
64-66
60-63
•
•
•
Commendable
•
P A S S
C+
C
C-
57-59
54-56
50-53
Good
•
•
•
•
•
•
•
•
•
D+
D
47-49
44-46
Majan University College
•
An outstanding piece of work.
Shows evidence of wider reading and
originality
Strongly analytical. All important points
are covered.
Arguments should be supported by
examples and evidence, objectively
presented and evaluated,
Well-structured and well written, without
noticeable grammatical or other errors.
Correctly referenced
Very good work.
All main points will have been covered,
though minor issues may have been
omitted.
The work will be analytical, balanced and
soundly based.
Examples and supporting evidence should
have been included.
The writing should be essentially correct,
without major grammatical or other
errors.
Generally referenced correctly
Generally good work.
Most points will have been covered, but
many finer points will generally have
been missed.
Shows limited reading.
Arguments/analysis should be basically
well structured and balanced with relevant
examples, but with errors and gaps.
The writing is clear, but has errors that
nevertheless do not obscure the meaning.
Referencing will be present but may at
times be inaccurate or insufficient.
Satisfactory.
Satisfactory
Page 6
S Mngt
D-
Level 3
Feb 2018-June 2018
•
40-43
•
•
•
•
35-39
Marginal Fail
F
25-34
Fail
FG
01-24
0
Fail
NonSubmission
Majan University College
•
•
•
F A I L
E
•
•
•
Shows sufficient grasp of the subject to be
acceptable.
Tends to be descriptive.
Examples and evidence is likely to be
weak and limited.
Shows limited reading.
Referencing is likely to be absent or very
poorly carried out.
Unsatisfactory/ Compensatable fail.
Serious errors and omissions.
Very little analysis
Work of a very poor standard with little
relevant information and/or serious errors.
Work containing little of merit
No work submitted
Page 7
S Mngt
Level 3
Feb 2018-June 2018
Marking Criteria- WRITTEN REPORT:
Criteria
Information
and Research
Completion of
Tasks,
Detailed
information
search (20 %)
Substandard
0
➢ Tasks
are
incomplete
/irrelevant.
➢ There is no
evidence for
information
search.
➢
➢
Poor
20
Entire tasks
have not been
addressed or
attempted.
Sources not
used
to
support
substantive
assertions or
argument.
➢
Information
search
is
inadequate.
➢
Very limited
resources are
used
to
discuss
the
tasks.
➢
Satisfactory
40
There is an attempt
to address some
tasks. All the tasks
lack proper focus
in discussion.
➢
Information search
is evident.
➢
Although
the
information
supports the task,
some of them are
not
properly
analysed and lack
paraphrasing
at
some areas.
➢
➢
➢
All the tasks
are discussed
but one or two
tasks
lack
focus
or
clarity
➢
➢
Majan University College
Good
50
There is a
good attempt
to address the
tasks.
Good usage
of
information,
relevant
information
search
is
evident, but
has scope to
include more
resources.
Use of limited
range
of
sources with
limited
critical
awareness of
their
status
➢
Very good
60
All tasks are
discussed
properly.
Excellent
70
➢ All the tasks
are discussed
astutely.
Very
good
usage of variety
information
from various
sources.
Contents
are
properly
paraphrased.
The usage of
information
can be better if
it relates to the
context.
➢
Excellent
application of
the relevant
information
from variety
of
sources.
Excellent
usage
and
quoting of the
literature at
relevant
discussions.
➢
Excellent use
of a wide
range
of
appropriate
sources,
indicating
critical
awareness of
their
status
and
relevance.
Very
good
range
of
appropriate
sources,
indicating
critical
awareness of
their status and
relevance to an
extent.
Outstanding
100
All the tasks are
discussed astutely
with proper focus.
➢
Exceptional
application of the
information using
wide range of
relevant
and
current sources,
focusing
on
research
based
reviews indicating
personal research
and
critical
awareness of their
status
and
relevance.
Page 8
S Mngt
Level 3
Feb 2018-June 2018
and
relevance.
Understanding
of Issues (20
%) Reference
to appropriate
theoretical
background,
illustrations.
Application
and Analysis
(35%).
Detailed
discussion on
the
tasks
involved and
critical
awareness
➢
➢
No evidence
of
understanding
the issues.
Lack
of
analysis
of
information.
No discussion
is evident.
Majan University College
➢
Limited
evidence of
understanding
the issues.
➢
The discussed
tasks
are
completely
out of focus.
➢
Limited
evidence
critical
➢
General
understanding of
the various issues.
Some reference to
related theoretical
background
is
evident.
➢
Use of a range of
appropriate
sources.
but
without
critical
evaluation,
or
missing
some
significant items
➢
Evidence
general
of
of a
critical
➢
➢
Good
understanding
of the various
issues.
Majority of
the
tasks
show
evidence of
good
understanding
of
related
appropriate
theoretical
background.
➢
There is good
evidence for
critical
analysis and
reasoning in
some areas,
although
some material
not evaluated
➢
Evidence
of
very
good
understanding
of
relevant
theory
and
research in all
tasks.
➢
➢
Very
good
application of
the information
to the case.
There
is
evidence for indepth analysis
of
data.
However, all
tasks are not
➢
Evidence of
excellent
understanding
of
relevant
theory
and
research.
Reference to
appropriate
theoretical
background
provides
support to the
discussion.
Some
illustrations
that support
the theoretical
background
are evidenced
in
the
discussions.
Evidence of
excellent
critical
appreciation
and
evaluation of
relevant
theory
and
research and a
systematic
➢
➢
➢
Evidence
of
exemplary
understanding of
relevant
theory
and
research.
Reference
to
appropriate
theoretical
background
provides support
to the discussion.
Illustrations are
provided
that
amplify
the
theoretical
background.
Critical reasoning
and application is
consistently
evident across the
discussions. The
tasks
have
exemplary
discussion
and
detailed narration.
Page 9
S Mngt
Level 3
evaluation of
material.
Presentation
and structure
(15%)
Clear
introduction,
logical
structure,
reference
to
appropriate
theoretical
background,
illustrations,
good use of the
limited
number
of
words allowed,
➢
➢
The report is
unorganized
to the point of
being
virtually
unreadable.
Lacks
cohesion and
orderly flow.
Majan University College
➢
Poor analysis
of
information.
Although
there
is
evidence for
some
discussion,
they
are
discrete and
lacking focus.
It does not
reflect critical
application of
the concepts
to the tasks.
➢
The report has
unacceptable
failings
in
structuring
and / or clarity
of
written
expression
➢
The report is
difficult
to
read due to
overwhelming
errors
or
misspellings
Feb 2018-June 2018
stance, with some
lost opportunities
or
misunderstandings.
➢
Though discussion
of the ideas is clear,
a coherent flow of
thought is not
evident.
➢
The
report
is
unorganized, but
can be read. Poor
flow of the report
structure.
➢
The
assignment
has failings in
structuring and / or
clarity of written
consistent
in
analysis
and
can
be
presented in a
better manner.
➢
➢
Evidence for
a
coherent
presentation
is evident, but
lacks
uniformity
throughout
the essay.
The report is
somewhat
organized.
The flow is
not coherent
and
needs
improvement.
➢
➢
The report is
well organized.
There
is
orderliness in
the structure.
Coherence is
also evident but
there is still
scope
for
improvement.
A
generally
well-structured
and expressed
assignment,
that
attempt
to
relate it to the
topic
Excellent
analysis of the
information
and
application to
the case..
➢
The structure
of the report
is excellent,
with cohesive
discussion
➢
An
assignment
whose clear
structure and
expression
significantly
enhances its
argument
➢
The structure is
exemplary.
Execution
is
excellent.
Discussions are
free of grammar or
writing errors. A
clear
layout
augments
the
presentation.
Page 10
S Mngt
Level 3
clear layout,
overall
organisation of
the report.
expression, which
impair its capacity
to communicate
➢
References
(10%)
➢
The
references do
not
clearly
comply with
the
basic
requirements
of
HARVARD
STYLE
format.
Majan University College
➢
The
references do
not
clearly
comply with
the
basic
requirements
of
HARVARD
STYLE
format. The
references are
inadequate to
support
the
literature used
in the report.
Feb 2018-June 2018
➢
Frequent
compositional
errors
or
misspellings, but
the report can be
read
➢
The report shows
some compliance
to
HARVARD
STYLE
referencing,
but
shows many errors.
➢
Very
few
references quoted
which
are
inconsistent with
the amount of
literature used in
the report.
While
the
assignment
has
some
failings
in
structuring
and
/
or
clarity
of
written
expression,
these do not
impair
its
capacity
to
communicate.
➢
More
than
occasional
errors
or
misspellings.
➢
The
report
demonstrates
a basic level
of
HARVARD
STYLE
referencing,
but
still
contains
major
deficiencies.
No
sophistication
is evident i.e.
Websites do
not
follow
communicate
clearly.
➢
Well executed.
Few grammar
or
writing
errors. Reads
easily. Is fairly
well organized
➢
The
report
demonstrates a
solid
understanding
of the basic
elements
of
HARVARD
STYLE
formatting. Intext citations if
presented
at
relevant areas
will lend more
appropriateness
to the report.
➢
Well
organized
report
➢
The
report
demonstrates
excellent
HARVARD
STYLE
formatting
skills. In-text
citations are
presented at
relevant
areas.
Consistent
use
of
relevant and
current
sources that
➢
Student understands
and recognizes the
concept of intellectual
property, can defend
him / herself if
challenged, and can
properly incorporate
the ideas / published
works of others into
their
own
work
building upon them.
➢
Skillful use of
credible, relevant
and
current
sources
of
Page 11
S Mngt
Level 3
➢
Sources used
show limited
relevance and
currency.
➢
Some sources of
information
are
relevant
while
others are dated.
Feb 2018-June 2018
➢
Harvard
Referencing
style.
Majority of
the sources
are relevant
and current.
➢
Sources used to
support
the
discussions are
relevant
and
current.
enhance the
discussions.
information that
augments quality
of discussion.
MARKING CRITERIA: VIVA
Mark range
Responses to
Questions
(40%)
Conceptual
Understanding
(40%)
100
Out standing
Exemplary
responses to
questions,
Responses are
precise,
exhibiting high
level of
confidence and
reasoning.
100
Out standing
Exhibits
exceptional
understanding
with ability to
synthesis and
summarise
information
precisely
Majan University College
70
Excellent
Demonstrates an
excellent ability
to understand
the essence of
questions,
responds with
confidence with
clear
explanation,
focus and
reasoning.
Excellent
responses to
Questions
70
Excellent
Demonstrates
excellent
understanding of
the issues with
relevant
reference to
literature review
60
Very Good
Very good
responses to
questions
Demonstrates
ability to
understand the
essence of
questions,
responds with
confidence with
clear explanation,
focus and
reasoning.
60
Very Good
Demonstrates
understanding of
the issues and
concepts but with
minor
deviations/errors.
50
Good
Demonstrates
good ability to
understand the
questions with
good
explanation,
focus and
reasoning.
50
Good
Demonstrates
understanding of
issues and
concepts but
lacks clarity in
some areas.
40
Satisfactory
Understand the
questions and
responds, but
lacks clarity
and focus.
20
Poor
Makes little
effort to either
understand the
question or
respond to the
question
0
Substandard
Makes no effort
to either
understand the
question or
respond to the
question.
40
Satisfactory
20
Poor
Very limited
understanding
of the issues
and there is
disconnect
with the topic
to be
presented.
0
Substandard
Totally lacks
understanding of
the issues and
there is
disconnect with
the topic to be
presented.
Limited
understanding
of issues
presented.
Page 12
S Mngt
Level 3
100
Out standing
Exemplary
usage of
vocabulary, with
accuracy of
expression.
70
Excellent
Excellent and
expansive use of
technical
vocabulary
while presenting
answers.
Use of
Exemplary
confidence and
Technical
very high level
Vocabulary
of command
over the subject
and overall
and exhibits
communication relevant and
appropriate
skills (20%)
gestures.
Majan University College
Excellent
confidence
evident from
command over
subject
knowledge,
preparation.
Confidence
demonstrated
through
language,
expression and
body language.
Maintains
continuous eye
contact
60
Very Good
Has displayed
frequent usage of
technical
vocabulary.
However there is
scope for
improvement.
High level of
confidence is
evident from good
subject knowledge
and preparation.
Confidence
demonstrated
through language,
expression and
body language.
Feb 2018-June 2018
50
Good
Has displayed
adequate usage
of technical
vocabulary.
Demonstrates
good
level of
confidence
evident from
adequate level of
subject
knowledge and
preparation.
Confidence
demonstrated
through
language,
expression and
body language.
40
Satisfactory
Occasional
usage of
technical
vocabulary in
the answers.
Demonstrates a
minimum
(adequate)
level of
confidence
evident from
limited subject
knowledgelacks
preparation. No
eye contact
Limited usage
of technical
vocabulary.
20
Poor
Limited
evidence of
usage of
technical
vocabulary.
0
Substandard
No evidence of
usage of
technical
vocabulary.
Shows signs of
nervousness
as both content
knowledge and
presentation is
incorrect.
Shows signs of
nervousness
as both content
knowledge and
presentation is
incorrect.
Page 13
S Mngt
Majan University College
Level 3
Feb 2018-June 2018
Page 14
S Mngt
Level 3
Feb 2018-June 2018
DOMINO’S
Growing up in foster homes most of their childhood, Tom Monaghan and his brother James borrowed
$900 in 1960 to purchase a mom-and-pop pizza store in Ypsilanti, Michigan, named Domi-nick’s. After
trading his brother James a Volkswagen Beetle for his half of the business in 1961, Tom changed the
store name in 1965 from Domi-nick’s to Domino’s Pizza Inc. The company experienced steady growth
during the 1960s, and by 1978, there were 200 Domino’s stores in the USA. During the 1980s, the
company expanded rapidly both in the USA and internationally. By the end of the decade, Dominos had
more than 5,000 stores in the USA, Canada, United Kingdom, Japan, Australia, and Colombia. By 1998,
there were more than 6,000 Dominos, with 1,500 located outside the USA. Tom Monaghan retired in
1998 and sold 93 percent of the company (worth $1 billion) to Bain capital Inc. In the six years following
the sale, Domino has enjoyed great success under Bain capital and in 2004 Domino’s became a publically
traded company on the New York Stock exchange under the ticker symbol DPZ. The initial stock price
was $16 per share and placed a value on the company at more than $2 billion (double the price Bain
paid). Domino’s changed its 49-year-old recipe at year end 2009 and started a heavily advertised
marketing campaign called “new inspired pizza.” Domino’s stock price appreciated from around $8 a
share at the start of 2010 to $60 in mid-2003. Fueled by the new recipe and new products, Dominos has
celebrated its 50th anniversary in 2010 and was awarded best pizza chain in 2010 and 2011 by Pizza
Today magazine, marking the first time ever that the same pizza chain had received the award in
consecutive years. Domino’s CEO Patrick Doyle was named the best CEO of 2011 by CNBC. Domino’s
was ranked number 1 in Forbes magazine’s “top 20 Franchises for the Money” list. About 96 percent of
Domino’s stores are owned by franchisees. There are very few company-owned Domino’s stores.
Business Segments
Domino’s provides financial information for four key business segments: (1) domestic Company-owned
stores, (2) domestic franchise stores, (3) domestic supply chain, and (4) international. Note in exhibit 1
that the largest revenue-generating segment is the domestic supply Chain with more than 50 percent of
all revenue. Note also the large revenue numbers for the relatively few company owned stores, because
each Domino’s domestic franchisee owns his or her own store(s) and reports their revenues on their own
personal financial statements rather than Domino’s. From franchisees, Domino’s reports only the
royalties and advertising fees it receives from franchisees as revenue. The financial data for the
international supply chain centers are included in the international division, not under the domestic
Majan University College
Page 15
S Mngt
Level 3
Feb 2018-June 2018
supply chain division. Also, note in exhibit 1 the slight revenue decline in 2012 for domestic companyowned stores. Exhibit 2 reveals that for 2012, Domino’s international stores had the highest growth in
revenue, followed by U.S. company-owned stores. However, the sales growth among all three segments
slowed in 2012. Exhibit 3 reveals that Domino’s growth in number of stores is highest outside the USA,
with the actual number of company-owned stores in the USA falling to 388. About 10,000 employees
work for Domino’s, but counting all workers for all franchisees, this number is closer to 205,000.
Majan University College
Page 16
S Mngt
Level 3
Feb 2018-June 2018
Domestic Supply Chain
Domino’s domestic supply chain supplies franchisees with dough, vegetables, ovens, uniforms, and
much more, enabling better control, pizza consistency, and timely delivery of products. This backward
integration strategy enables Domino’s to offer pizza at lower prices and allows store managers to focus
on store operations rather than mixing dough on site, prepping vegetables, and bargaining with
independent suppliers for ingredients. Domino’s has 16 regional dough manufacturing and supply chain
centres and leases a fleet of more than 400 trucks to aid in delivering products to stores twice a week.
However, Dominos’ franchisees are not required to purchase supplies from Domino’s, but interestingly
more than 99 percent do purchase all its supplies from the company’s domestic supply chain segment.
To ensure this division remains viable, Domino’s provides profit-sharing incentives to franchisees to
buy its products from Domino’s. In addition to the 16 domestic supply chain centers, Domino’s also
operates six supply chain centers outside the USA.
Domestic Stores
The company’s domestic stores division includes a network of 4,540 stores operated by 1,026 franchisees
and 388 company-owned stores in the USA. Domino’s desires to have all of its stores owned and
operated by franchisees, but if certain stores are underperforming; Domino’s often will purchase these
stores in hopes of turning them around and then refranchising them later. Domino’s uses companyowned stores as test sites for new products, promotions, new potential store layout improvements, and
as test sites for prospective new franchisees. Although the typical franchisee of Domino’s operates 4
stores, the nine largest franchisees operate more than 50 stores, including the largest domestic franchisee
that operates 135 stores. Currently, Domino’s has 1,077 different domestic franchisees with the average
franchisee being in Domino’s system for an impressive 14 years. Much of this longevity can be attributed
to Domino’s requiring prospective franchisees to manage a store for 1 year before entering into a longterm contract with Domino’s. Domino’s feels this system is unique to the pizza industry and provides a
competitive advantage over rival pizza firms.
International Division
Domino’s has 5,327 franchise stores outside the USA. The company’s international revenues as a percent
of total revenues increased to 13.0 percent in 2012, up from 11.2 percent in 2010.Note that the United
Kingdom has the most Domino’s of all countries, followed by Mexico. Among the company’s six
“international” supply chain centers, four of these are in Canada, one is in Alaska, and one is in Hawaii.
Majan University College
Page 17
S Mngt
Level 3
Feb 2018-June 2018
As with domestic franchisee stores, most of the company’s revenue in the international division comes
from royalty payments and advertising, as well as the sales of food and supplies to certain markets
(predominantly Canada, Alaska, and Hawaii). There is also rapid growth in Domino’s stores in India,
Turkey, and Japan. The largest Domino’s franchisee outside the USA operates 911 stores.
Internal Issues
Domino’s has a vertically integrated supply chain where they have backward control to some extent over
many of its supplies such as dough, veggies, equipment, and uniforms and forward control over around
400 retail stores that are company owned. Domino’s offers little to nothing in terms of healthy food
options on the menu, such as salads or fruit. Although this approach enables Domino’s to focus
exclusively on pizza, this practice also increases the firm’s vulnerability to the increasingly healthminded customer and possible government mandates for fast-food restaurants to stop using certain
ingredients and preservatives, and potentially forcing all restaurants to label all nutrition information on
the menu at the point of sale. Such a law would not be favourable to Domino’s.
Domino’s attributes much of its success to an incentive-based system for franchisees in which it actively
shares in profits through increasing demand for new stores and through purchasing supplies from the
Domino’s supply chain. Domino’s individual franchisee stores and company-owned stores also enjoy a
simple and effective store layout enabling pizza delivery and carryout orders to be processed and
executed efficiently as compared to many competitors. Unlike Domino’s, many rival pizza firms use a
dine-in business model, which is much more costly than Domino’s strategy. competitive advantages such
as these make Domino’s an attractive franchisee option in the quick-service restaurant (QSR) market
because overhead and investment is generally cheaper than competing firms.
Competitors
Competition in both the USA and international pizza-delivery and carryout business is extremely intense,
with Pizza Hut (owned by Yum Brands) being the largest competitor in the industry. Pizza Hut’s
revenues are more than 60 percent greater than Domino’s. Papa John’s and Little Caesars are also fierce
rivals in the industry. In fact, Little Caesars was listed as the fastest-growing pizza chain in 2010, with
revenues up 13.6 percent over 2009, followed by Pizza Hut’s 8 percent increase and Domino’s 7.2
percent increase. In addition to the three main rivals, Domino’s faces intense competition from many
local mom-and-pop pizza stores, frozen pizzas from the grocery store, as well as hundreds of non-pizza
fast-food options. Pizza Hut, Domino’s, and Papa John’s account for 51 percent of all consumer spending
Majan University College
Page 18
S Mngt
Level 3
Feb 2018-June 2018
on pizza delivery stores in the USA, with the other 49 percent coming from regional or mom-and-pop
establishments. Internationally, Pizza Hut and Dominos are the main players in the industry, but various
countries have numerous national companies and thousands of mom-and-pop pizza and Italian
restaurants vie for business as well. As with the domestic market, some customers consider local pizza
stores to offer better quality products than large chains and are willing to pay marginally higher prices
for this perceived quality. Another competitor is Pizza inn Holdings, Inc., based in the colony, Texas.
Pizza inn owns 10 stores and franchises out 300 more stores.
Nutrition Concerns
An area of concern for all fast-food establishments, including pizza stores, is the growing health-minded
customer, as well as the growing pressure from government agencies to label all products with nutrition
information. There have been battles between the restaurant industry and government agencies for many
years, but much like the tobacco industry (in respect to labelling its products). It appears the war is close
to being lost for the restaurant industry. Domino’s itemizes nutrition information on its website, but
forces the customer to add the calories for crust, sauce, cheese, and topping, and then divide by the
number of slices to derive the total calorie count per slice. After doing the calculations, one large slice
of hand-tossed pepperoni pizza for example has 300 calories and 12 grams of fat, and there are 8 slices
in a pizza. To complicate matters for restaurants such as Domino’s, it is difficult to provide accurate
nutrition labels when there can be an almost endless combination of ingredients on a pizza. For example,
someone may order a large sausage pizza with onions and olives whereas someone else might order extra
cheese and tomatoes. Having to print out nutrition labels for all these combinations would be quite costly
as opposed to a restaurant like McDonald’s where it can print the nutrition label on the Big Mac because
there is uniformity in ingredients and the label is understood to be for the base item. Chipotle Mexican
grill claims to only use meat and dairy products from free-ranging cattle, as opposed to cattle injected
with growth hormones. Domino’s Pizza markets its pizzas as having gluten-free crust. This is an attempt
to win over health-conscious customers, comply with government regulations, and make current
customers feel a little less guilty about eating pizza. The tug of war between customers, governments,
lawyers, and the restaurant industry on health issues is likely to continue for some time. In response to
these challenges, many restaurants have opted for healthy menu options. Wendy’s, for example, has
promoted several meal combinations that contain less than 10 grams of fat. All of these items were
originally on its menu, just not marketed in that manner. Wendy’s has added side salads and fruit to help
cut down on calories, fat, and sodium. Subway is also famous for marketing its products as healthy
Majan University College
Page 19
S Mngt
Level 3
Feb 2018-June 2018
alternatives to other fast-food options. Domino’s, and many pizza competitors, offer few to no menu
options for the health-conscious consumer.
The Future
The top management team contemplates the future direction of Domino’s, it has much to consider.
Should the firm continue its aggressive market development strategies and accept the risk associated
with expanding into markets it has little expertise operating within? What new geographic locations or
regions should Domino’s focus? Should Domino’s simply follow Pizza Hut’s international rollout of
stores? How would this expansion affect the corporate structure of Domino’s? Would restructuring by
geographic division and thus establishing offices in Asia, the Middle East, and South America better
enable them to manage these more risky environments? Can Domino’s afford this financially? Should
Domino’s consider offering salads or a line of healthy menu options? Should Domino’s purchase trucks
to deliver its products rather than incurring such heavy leasing expenses?
.
Source: David, F (2015). Strategic management. Boston: Pearson.
Majan University College
Page 20
Purchase answer to see full
attachment