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