brands list? Why do you think this is the case?
Now look at which sectors appear to dominate
the list, and try to identify the reasons. Prepare
a short report identifying the countries that
this report, and
develop a presentation for the top management
team that presents the benefits and drawbacks for
the top five Asian economies listed.
CLOSING CASE
Domino's Worldwide
Domino's made its name by pioneering home delivery ser-
vice of pizza in the United States. The company was founded
in 1960 in Ypsilanti, Michigan, by Tom Monaghan and his
brother, Jim. Domino's Pizza was sold to Bain Capital
in 1998 and went public in 2004. On May 12, 1983,
Domino's opened its first store internationally-in
Winnipeg, Canada. And, in 2012, Domino's Pizza removed
the word “Pizza” from the logo to emphasize its non-pizza
products. Its current menu features a variety of Italian
American entrées, side dishes, and desserts.
In recent years, the growth for Domino's has been
overseas. With the U.S. fast-food market saturated and
consumer demand weak, Domino's has been looking to
international markets for growth opportunities. Today,
almost all new store openings are outside the United
States. As of 2013, Domino's had 10,566 stores with
4,900 in the United States, 750 in the United Kingdom,
650 in India, and the remaining spread out in 70 countries.
Its plans call for 4 to 6 percent growth in stores per year
for the next few years (some 500 new stores annually,
with the majority in foreign markets). Given this expan-
sion and clear international growth strategy, perhaps
even more amazing is the 76 straight quarters of same-
store sales growth in Domino's international stores.
As Domino's expands its international businesses, there
are some things that the company has kept the same as in
the United States, and there are some things that are very
different. What is the same is the basic business model of
home delivery. This sets it apart from many of its rivals,
which changed their basic offering when they entered
foreign markets. For example, when Yum! Brands Inc.
introduced Pizza Hut into China, it radically altered the
format, establishing Pizza Hut Casual Dining, a chain
that offers a vast selection of American fare—including
ribs, spaghetti, and steak—in a full-service setting. Pizza
Hut adopted this format because table service was what
Global Marketing and R&D
Chapter 18
551
the locals were used to, but Domino's isn't interested.
"We go in there with a tried-and-true business model of
delivery and carry-out pizza that we deploy around the
world,” states Richard Allison, Domino's executive vice
president-international. “In emerging markets, we've got
more tables than you would find in the U.S., but we have
no plans to lean toward a casual dining model where the
server comes out and takes an order."
This general strategy is backed up by the CEO of
Domino's, J. Patrick Doyle, who said that “The joy of pizza
is that bread, sauce, and cheese works fundamentally ev-
erywhere, except maybe China, where dairy wasn't a big
part of their diet until lately.” He continued, “It's easy to
just change toppings market to market ... in Asia, it's
seafood and fish ... it's curry in India ... but half the
toppings are standard offerings around the world.” Only
eight restaurant chains worldwide have more than 10,000
outlets and Domino's is one of them (Domino's opened
its 10,000th store as a franchise-owned outlet in Istanbul,
Turkey, in 2012). "Local knowledge and ownership are
critical to our success overseas," Doyle said.
Bottom line, Domino's is the overall pizza-sales
leader in the global marketplace and has established op-
erations with some 5,700 store units worldwide. At this
time, Domino's is also making a run for the top pizza
spot in the United States, which now is held by Pizza Hut
(with Papa John's at #3). This entrepreneurial leader-
ship is best captured by Ronnie Asmar, director of new
store development for STA Management in Southfield,
Michigan, which owns 33 Domino's outlets; he says, “We
come from an entrepreneurial family in the hospitality
industry, and Domino's has been an awesome partner.”
And, Domino's appear to lead the market in other ways
as well. Domino's appear to have captured, integrated,
and found an edge in the social media world we live in
now petter than its competition. For example, Mitch
Speiser, a securities analyst for Buckingham Research, in
New York said, “Domino's mobile app for ordering pizza
is better than its rivals." Information technology also
helps drive sales for Domino's vis-à-vis local pizza entre-
preneurs. At this time, about 58 percent of Domino's
orders are digital in the United Kingdom and about
40 percent in the United States.
On the other hand, some things vary from country to
country. In the United States, pizza is viewed as casual
food, frequently mentioned in the same breath as beer
and football. In Japan, it's viewed as more upscale fare.
This is reflected in the offering. Japanese pizzas come
with toppings that the average American couldn't
fathom. Domino's has sold a $50 pizza in Japan featuring
foie gras. Other premium toppings include snow crab,
Mangalitsa pork with Bordeaux sauce, and beef stew
with fresh mozzarella. Japanese consumers value aes-
thetics and really care about the look of food, so presen-
tation is the key. Patrons expect every slice to have
precisely the same amount of toppings, which must be
uniformly spaced. Shrimp, for example, are angled with
the tails pointing the same way. Domino's developed
their business in South Korea in much the same manner
as Japan.
Now, even with these unique toppings in Japan, pizza
consumption is relatively low in Japan—the average Jap-
anese pizza customer only consumes the product four
times a year. To boost this, Domino's has been working
to create more occasions to enjoy it. For example, on
Valentine's Day, its Japanese stores deliver heart-shaped
pizzas in pink boxes. Heart-shaped pizzas also appear on
Mother's Day. This culture of superb pizzas with high-
quality toppings was actually an initiative that was ini-
tially demanded by their U.S customer base; over an
18-month period during 2009 to 2011, Domino's remade
itself and its pizzas—at the same time, it stayed short of
adding more than 10 percent in cost to the pizza
ingredients.
But back to Japan! To promote the offering in Japan,
rather than spending money on commercials, Domino's
tried to create news, like topics that people talk about. If
the topic is fun and hot, Domino's believes that people
will talk about it, which ultimately translates into better
sales. One promotion in particular received heavy cover-
age. The chain offered 2.5 million yen (about $31,000)
for one hour's work at a Domino's store. In all, about
12,000 people applied for the “job.” The lucky winner
was a rural housewife who had never eaten pizza. She
flew to a small island to deliver pizza to schoolchildren,
who were also new to pizza. The event received heavy
news coverage-free advertising, in other words! As its
international focus is now larger and advertisement funds
are being allocated accordingly, Domino's is moving
much more toward TV commercials in its promotional
efforts to complement other promotional efforts. This in-
cludes Japan, India, and a variety of countries.
In India, where Domino's has some 650 stores and has
plans for some 1,000 more, 50 percent of the menu is
vegetarian in order to match the preferences of the large
Hindu population. For delivery, Domino's has a fleet of
mopeds, which makes sense in large cities like Mumbai
where traffic congestion is awful. Because Indians like
things spicy, instead of including Parmesan cheese pack-
ets, Domino's includes an "Oregano SpiceMix." In gen-
eral, the toppings have far more spice than in the United
States. Although Indians are used to full service in res-
taurants, Domino's doesn't use servers or busers in its
stores, even though each store typically has a few tables
in for those who want to eat on premises. Instead, it is
educating customers to clean up after themselves, with
in-store trashcans that say “Use Me" in big bold letters.
Domino's today has focused on branding itself with
high-quality ingredients, efficiency but at a speed that
fosters quality, and a devotion to maintaining a cultural
552
Part 6
International Business Functions
Is Taking a Bite Out of India," Getting More Awesome, www.getting-
moreawesome.com/2012/02/08/how-dominos-is-taking-a-bite-out-of-india;
D. Buss, “Domino's Global Growth Feeds Pizza Chain's Rising Success,"
Forbes, March 9, 2013.
fabric that allows for a strong entrepreneurial mindset
among employees and franchisees. The company cap-
tures the global marketplace effectively, either as a first-
mover or as a strong follower. "For Domino's the
development and eventual channelization of industries is
important strategically," said Michael Lawton, chief fi-
nancial officer (CFO) of Domino's. He continued: “It led
the company to decide in some foreign markets that
the best alternative was to let someone else introduce
the pizza category with a sit down concept and then
Domino's moved in and captured their part of the indus-
try as delivery and carry-out developed.” In other cases,
Domino's led the market entry into foreign countries.
These decision choices make for great global strategy.
Domino's has certainly captured the "taste" of the global
marketplace!
Case Discussion Questions
1. Do you think it is wise for Domino's to stick to
its traditional "home delivery" business model,
even when that is not the norm in a country and
when its international rivals have changed their
format?
2. What do you think Domino's does from an orga-
nizational perspective to make sure that it ac-
commodates local differences in consumer tastes
and preferences?
3. How does the marketing mix for Domino's in
Japan differ from that in the United States? How
does the marketing mix in India differ?
4. What lessons can we draw from the Domino's
case study that might be useful for other interna-
tional businesses selling consumer goods?
Sources: A. Gasparro, “Domino's Sticks to Its Ways Abroad," The Wall
Street Journal, April 17, 2012, p. B10; A. C. Beattie, “In Japan, Pizza Is
Recast as a Meal for Special Occasions," Advertising Age, April 2, 2012,
p. 16; A. Gasparro, “Domino's Sees Bigger Slice Overseas," The Wall
Street Journal, February 29, 2012, p.B7; R. Shah, “How Domino's Pizza
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