Dominoes Pizza. Business & Marketing. Background of Domino’s Pizza

Domino’s Pizza
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Background of Domino’s Pizza
Domino’s pizza is a pizza restaurant chain that was founded in 1960 by James and Tom Monaghan. It is an American multinational corporation that is headquartered in Ann Arbor, Michigan. While the two brothers put in money equally to acquire the restaurant chain from Dominick DiVarti it is James who is attributed to the success that Dominos has exhibited since its establishment. Dominos has witnessed immense growth and productivity over the years. It is reported that there are over 17000 Dominos stores spread across more than 90 countries globally (Dominos.com, 2020). From just one store when the restaurant chain was established in 1960, Dominos opened its 200th store in 1978 and by 1990 there were over 5000 stores around the globe. The first Dominos store was opened in South America in 1988 in Colombia while the first store in Africa was established in Egypt in 1995 (Dominos.com, 2020). While the founder announced his retirement in 1998 and in so doing sold the ownership of the restaurant chain to Bains Capital Inc., it continues to thrive on the founding values, vision and objectives. Dominos core values have since the opening of the first outlet been built on the provision of quality food and superior service. Dominos believes in opportunity, winning together, hard work, embracing community, inspiring solutions and uncommon honesty. It also continues to be guided by its vision which is to become the best pizza company not only in the world but in every neighborhood.
Dominos largest market is in the US where it operates about 6156 stores that are franchise-owned (Dominos.com, 2020). Based on the above fact, there are more than 800 independent franchise owners in America with a majority of them starting their careers as hourly workers (Dominos.com, 2020).
Figure 1: https://biz.dominos.com/web/public/about-dominos/fun-facts
It is estimated that Dominos sells roughly 3 million pizzas daily with the pepperoni being the most popular choice among consumers. With the use of Werner Lomker which is the fastest pizza maker in the world Dominos succeeds in meeting the high demand for its products. The machine facilitates the production of 3 large pizzas in less than a minute. The machine comes in handy particularly during its busiest days during New Year’s Eve, Halloween and Super Bowl Sunday. Reports indicate that Dominos sells more than 2 million pizzas on Super Bowl Sunday which is 40% over the sales on normal Sundays (Dominos.com, 2020). Over the years Dominos has taken the initiative to update its menu with new products in line with changing consumer tastes and preferences. For instance, Dominos introduced breadsticks in 1992 which was the first non-pizza item on its menu. It also conforms its menu to the culture of the different countries it ventures into.
Through its digital ordering channels Dominos provides customers with convenient means of ordering anywhere and anytime. With many Americans embracing technological innovations, Dominos derives about 65% of its sales in the region from orders made through the digital platforms. According to the website, “Domino’s and Xevo, the leader of in-vehicle commerce and services for automakers, delivers a pre-loaded in-car ordering system where customers can order their favorite pizza with a few taps of their vehicle’s touchscreen” (Dominos.com, 2020). Additionally, Dominos is environmentally-conscious and has taken various steps of mitigating the impacts of climate change. It recently launched e-bikes for use in delivery. Based on the above facts, Dominos 2019 global retail sales hit $14.3 billion with over $7 billion being realized from the international markets in India, UK, Australia and Mexico (Dominos.com, 2020).
Dominos Competitive Marketplace
The food and restaurant industry not only in the US but around the globe is highly competitive. Consumers are continuously changing their tastes and preferences based among many factors including price and quality of the products. Foodies are also inclined to engage with outlets that have a wide range of products in their menus. As such, Dominos operates in a competitive market place despite the success characterized by immense growth and productivity it has witnessed over the years. There are several players operating within the pizza and food industry in general who are making significant strides and improvements and consequently giving the management at Dominos sleepless nights. To begin with, Dominos faces stiff competition from McDonald’s, an American fast food restaurant that was opened over 70 years ago and is headquartered in Chicago, Illinois. McDonald’s is very successful not only in the US but globally. While Dominos is valued at $14.7 billion, McDonald’s is estimated to be at $146 billion (Craft.com, 2020). In 2019 McDonald’s global revenue was $21.076 billion compared to Dominos which was $3.6 billion and as shown in the figure 2 below. McDonald’s also has doubled the number of outlets and stores as Dominos with over 200000 employees serving in various capacities (Craft.com, 2020). McDonald’s is a common household name and as such, it is a formidable force in the food industry in the US capturing at least 18% of the market share.
Dominos also faces stiff competition from Starbucks. It is a chain of restaurants that has gained recognition and fame from its handcrafted and signature beverages and food items. Since it was established in 1971 Starbucks continues to grow and expand rapidly not only in the US but globally. As of 2019 it was valued at 96 billion and accumulated sales revenue of $26.5 billion as shown in figure 2 below. It is estimated that Starbucks has employed over 300000 employees to serve in different capacities in the more than 28000 locations around the world (Craft.com, 2020). Thirdly, Pizza Hut also competes directly with Dominos in the fast food industry. Pizza Hut has received several accolades over the years including that of the leading pizza outlet globally. The other competitors include KFC, Subway, Burger King, Dunkin Donuts, Yum Brands and Taco Bell.
Figure 2: https://craft.co/dominos-pizza/competitors
Dominos Positioning Strategy in the Domestic Market
As per the facts shared in the previous section, it is evident that the food and beverage industry is highly competitive. In that regard, it is imperative that companies such as Dominos strategically position themselves in the markets they operate in. According to Huang et al. (2015), “A positioning strategy is what differentiates your business from any other brand. It is the image that you are trying to create in the eyes of your customers” (pg.620). In the US, Dominos positioned itself with the infamous slogan “delivery in 30 minutes or its free” (Dominos.com, 2020). They had identified that many consumers were dissatisfied with how some of the food outlets delayed their deliveries. As such, they put in place the requisite infrastructure that enabled them to keep the promise. In the end, they have not only been able to avoid giving out free pizzas but have established themselves as reliable food outlets. The initiative helps Dominos differentiate itself from competitors and stand out.
Dominos Positioning Strategy in International Markets
Business ventures into foreign territories can be risky and lucrative in equal measure. They are risky in the sense that consumers in international markets tend to have different needs, tastes and preferences compared to their counterparts in the local markets. Businesses that fail to take note of that fact usually fail and have to close down their operations (Sheehan, 2014). However, Dominos continues to thrive on the international front through the localization of its menu (Dominos.com, 2020). Dominos has a formidable research and development team that scans the market before entry to understand the values and beliefs of the local consumers. For instance, Dominos is very successful in India because of the strategy. Considering cows are sacred in India, Dominos instrumentally replaced its beef toppings on the pepperoni pizza with chicken sausage toppings. Through the initiative, Dominos succeeds in differen...