Tech with a Side of Pizza: How Dominos Rose to the Top Case Study Analysis
Case Summary
The year 2008 marks the recession of Domino due to the declining sales market and the defamation of the taste by an American host and further drowning the image of the firm by uploading a prank video of the employee tampering with pizza in the kitchen. These lead to a decline in sales of pizza by Domino and thus need urgent utilization of marketing strategies and technological advancements in delivering pizza and marketing strategies to dominate the market like before. Further, tough rivalries are present in the market which has led to extreme market competition.
The best strategies recommended for solving these severe problems that are being faced by Domino’s Pizza Inc. are determined execution, effective marketing strategies, utilizing technological aspects, increasing the product line, tangling with flavors, using voice control orders, and social media marketing techniques. Using these strategies, Domino’s could dominate the market.
By the implementation of these recommended strategies the company could combat its main operational issues like decreased sales as the company faced severe crashes when sales went down in the year 2008 due to decreased share prices and defamation by an American host for a night show who called it unpalatable and a prank video went viral where the employees were shown meddling with the food during preparing process. The year also marks the worst financial crisis the world has ever faced.
Case Analysis
Considering the current scenario of the company, it could be said that the company is facing various challenges and threats like increasing market competition. We have performed strategic analysis to determine different dynamics of these challenges and competitive analysis of the market as follows.
Challenges faced by Domino’s in 2008
The major challenge faced by the firm in 2008 was declining sales in the US which marked an industry decline of 2.2%. The major competitors that arose were frozen pizza and fast food. Domino was facing a huge backlash in the taste of the pizza. Further, the decline was the reason of false spreading like the host calling it unpalatable and the prank video uploaded to show the employee mingling with the pizza. These lead to a decline in sales and further, the rising competition played a major role in the decline.
Dynamics and Competition in the QSR industry
Efficiency and speed are profound factors in the QSR industry as the industry is operating on providing quick services to customers. So speed, efficiency, and competitive prices are the main factors behind the progress of the QSR industry. The pizza industry is highly competitive as the rivalries are extremely tough and come up with something new daily. In the US alone, the two big rivalries i.e. Pizza Hut and Domino’s account for around 56% of the total sales among the top 100 pizza chains. Further insights are given in the Porter’s Forces presented below in the appendix 1.
Domino’s Strategies
Changing the pizza flavor
The major recommendations for the firm account for solving the major issue first i.e. changing the pizza flavor. To experiment with different flavors, cheese, sauces, etc. to come up with explicit flavor. Cutting down slices into more pieces so it becomes convenient. Improving the crust would also attract crust lovers. Dismembering the pizza and creating it from the core would be a better strategy. These were all adopted by Domino’s. Another way adopted by Dominos was the introduction of two medium-sized pizzas at reasonable prices. They further experimented with developing new flavors.
Technological advancements
The world is heading towards technological advancements and the food sector needs to incorporate these in their business execution. The firm introduced an online system comprising computer-based ordering, and an online ordering and tracking system to make delivery feasible and easy for the employees as well as the customers. This was the most efficient method to attract customers as they could track their orders easily by entering their phone numbers. This was the result of the information and entertainment strategy that could not just leave the customers with blank faces regarding their orders.
Increasing Product Line
The introduction of the new category of pizza with added-on ingredients like feta and spinach namely artisan pizza was another major step towards the plan. The prices were slightly higher but people were reluctant to pay for better quality even in crisis time. Moreover, the international market was still thriving for Domino’s as the chains outside the US were limited and asked for an international opportunity. These steps marked the gross change in revenue generation than seen in the past few months or years. The sales increased up to 14% in the first quarter of 2010...........
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