660 final paper YY

· Strategical relevance or Success Factors in Macro Environment

The critical success factor for Domino's is its ability to prepare its pizza within a short time and have it delivered within 30 minutes of the order recording.

· Ranking of the Factors

On a scale of 1-5, the success factor is ranked 5. Since it also deals with home deliveries, high pizza preparation and delivery speed are the key success factors.

· Strength of Industry Competitive Forces

The strength of Domino's pizza is the strong brand equity. It has maintained a strong brand image with cost-friendly and quality foods based on the customers' needs and wants based on Domino's Annual Report 10-K.

· Industrial Factors Driving Change

New opportunities and technology are the industrial factors driving change in the company. The company is working toward incorporating the current technology, including marketing and the delivery cars, for more success. Besides, it utilizes the customers' feedback to get new opportunities for incorporating change.

· U.S Market and Market Position

Domino's pizza has the largest market share in the U.S as it was ranked among the top organizations for fast food. It takes 50 percent for pizza deliveries, while the other brands share the remaining 50 percent (Lucas, 2021).

· Strategies of Existing Rivals

Rivals are using the strategy of emulating the competitive strength of Domino's. They are also working towards fast deliveries and increasing the number of city stores. Besides, the products are being marketed in all the marketing media, making the consumers confused.

· Future Factors to be Watched at Present

The two main things to be watched in the future are competition from other organizations and ESG issues with stakeholders.

· U.S. and Global Markets

· Top Markets

As a food industry, Domino's has its market both inside and outside of the U.S. There are more than 6000 stores of Domino's in the U.S, which makes it the largest market in the world. Outsides its home market – U.S, India has the largest market of Domino's in the global world. This makes India to have approximate 1000 Domino's outlets to meet the needs of consumers. However, other countries also have several stores and outlets to avail its products. Apart from India, we also have Jamaica, Cuba, the Bahamas and the Dominican Republic.

· U.S Competitive Strategy

The primary competitive strategy of the company in the U.S is the differential strategy. This is where the company differentiates the products into many flavours and diversity. Having many varieties of pizza and other products from Domino's made it different from competitors, thus high performance. Domino's has differentiated its products to include chicken wings, pasta, salads, and sandwiches. Thus, calling for more sales from different products.

Focus strategy, which includes taking customers' feedback and implementing them as fast as possible, is the second competitive advantage of the company. Since Domino's values its customers, they put them on the priority to consider whatever they need within a short time. For instance, the customers' responses requested additional ingredients of garlic and butter to the pizza crust together with altering the pizza sauce and its composition. This led to an expansion in the product while winning more customers. Besides, there is the promise for delivering their products before thirty minutes. It means that the product will have to reach the consumer when still hot. Fast delivery was enhanced with the live tracker where consumers can locate their product, thus transparency to the customers.

· Strategic Goal

Growing its Domino's footprint is the strategy to cut down the delivery time goal of the company in the global market. Despite the company being, it has also been leaning toward fortressing its roots to the rest of the world. With this, they tend to add more stores to the existing markets to reach consumers easily (McKinnon, 2021). As a result, the transportation cost will be reduced as the stores will be closer to the consumers.

· Global Competitive Strategy

Focus strategy is the main global competitive strategy used by the company. Domino's focuses more on the narrow market segments so that it can be protected from competitors. The strategy has helped the company to utilize the limited resources to get all the needs from the consumers and deliver as required. It has also applied the niche-market focus to target specific customers. Its market has been divided into small categories based on consumers' unique needs like different flavours and cultural preferences when making pizza.

· Critique of the Competitive Strategy

From the two competitive strategies of gaining market share, both are beneficial to the company. Focus strategy enables the company to segment the unique preference and needs to meet the consumer needs. Besides, the differential strategy has helped differentiate the consumers for different products. It makes the company outstanding due to delivering the required products based on the customers' preferences.

· Internal Analysis

· SWOT Analysis

· Strength

· High brand recall with strong tag lines like '30 minutes delivery'.

· Extensive network in more than 60 countries in the world.

· Deep menu and quick services.

· Weaknesses

· Fewer numbers of the eateries.

· Low staff retention.

· Large number of outlets thus difficulties to handle.

· Opportunities

· High market expansion.

· Health-conscious eatables.

· High strength for penetrating to more markets

· Threats

· Stiff competition from both direct and indirect companies.

· High cost of resources like vegetables.

· ESG issues.

· Key Competitive Factor Identified in Value Chain Analysis

Market segmentation and differential is the main competitive factor identified with the value chain analysis. It was discovered that it is very competitive from the other vendors doing the same product. Thus, the company has to look for unique ways to ensure it remains outstanding. To do so, Domino's opts to segment and differentiate its products based on the customers' feedback to ensure majority of their needs are met.

· Competitive Values of their Core Competencies

The two competitive values for Domino's are championing the customers and creating inspired solutions. Putting people first involves creating an inclusive culture keeping in mind that everyone related to the company is the one that promotes success (Domino's, n.d). People are treated with dignity and respect as the values among each member is embraced. Thus, a company that all the involved team members bring their contribution for potential benefit.

The value of creating an inspired solution is projected with the company's objective being entrepreneurship and innovation. The humility and courage to embrace change make the company better every day (Domino's, n.d). It works together to unlock the collective potential, think big, and solve customers' needs in a relevant and new way.

· Critique of the Competitive Value of the Tangible Assets

The tangible assets of the company are well promoting the competitive value. They are utilized in full to ensure maximum use of the resources for the better quality of products.

· Competitive value of their intangible assets

The competitive value under this category is creating inspired solutions. Indeed, all intangible assets are put together to gather the customers' needs and solve them in a relevant way for a better tomorrow.

· Competitive Value of their Organization Capabilities

The competitive value for organization capabilities is to grow win together. Dominos is committed to building and long-lasting brand beyond every individual's contribution. Thus, expanding together to give exceptional results and celebrate all the successes as one. It also focuses on having fun together and ensuring the brand is better than yesterday. Hence, a better way to enhance and promote competition.

· Annual 2021 vs 2020 Revenue and Net Profit Comparison

The annual revenue for Dominos in 2021 was $4117 million and $3619 million for 2020 (Domino's Pizza Inc Revenue 2010-2021 | DPZ., n.d).

this shows an increase of around 11 percent of the total revenue for a year.

The company's net profit in 2021 was $1.717B and $1.594B in 2020 (Domino's Pizza Inc Gross Profit 2010-2021 | DPZ, n.d). This shows an increase of around 14 percent of the net profit from 2020.

· Annual 2021 vs 2020 U.S. Market Share (top 2 or 3 rivals)

Domino's has a market share of 70 percent, making it position two among its competitors. The first competitor, Starbucks, holds 75 percent, and the third in line McDonalds has 65 per cent while Pizza Hut, which is number four, has a share of 64 percent (Domino's Pizza, 2022).

· Stage in Life Cycle

In the life cycle, Dominos is in the post-maturity stage. Since its establishment, it has been able to open and successfully operate a number of stores with increased revenue. Besides, an increase in competition in the market share does not hinder the company from making more achievements. Also, it has strong brand recognition and secures growing customers, making the company expand more to meet new and existing customers.

Current Strategy

The current strategy for Domino's is to shrink the delivery radius by putting up as many stores as possible. This was due to an increase in the sales that increased the delivery radius hence the need to develop more restaurants within the U.S and other locations. This will help the company deal away with the third-party delivery and focus more on the in-house delivery for more revenues (Domino's Pizza, 2021). Besides, it gives the company complete control over the customer experience and the fees.

In my opinion, the strategy is achievable since the company has highly invested in new technologies that fully support the implementation of more restaurants. Besides, the digital market is enhancing and promoting the deliveries segments where respective orders are digitally made, and the nearest restaurant from the customer is used for deliveries (Rahman, 2022). Since most people are into technology in the current world, it is easier and faster to make an order online and wait for it at the comfort of your house, as some people do not prefer full-service restaurant dining. Moreover, it is cheaper for the consumers to access the company's digital market and make respective orders to their homes. The onset of the pandemic led to a more realization of the strategy, and it is being achieved are most people preferred deliveries.

Furthermore, Domino's introduced a car side delivery in 2020. Car side deliveries made contactless deliveries that made the customers enjoy, especially during and after the pandemic (Rahman, 2022). Thus, easy and fast delivery of the products from the small radius restaurants.

· Long-Term Objectives

The long-term objectives of Domino's are to grow with an approximate 60 percent over the next six years and a target of opening about 9700 stores by the end of the 2025 financial year (Franchise News, n.d). The growth plans are achievable due to the following reasons. The first is because of the current strategy of shrinking the delivery radius. This implies that more stores will be placed between the existing stores and the locations where stores did not exist. Thus, increasing the number of stores slowly by slowly to the targeted number by the end of 2025 as they bring people together to share the love of Domino's.

Secondly, increasing the number of stores gives Domino's a chance to win every neighborhood in the market. When more customers are winned, the company experiences an increase in revenues that leads to growth. Ones get to be dominant and win more when they get dominant in the neighborhood and leave with the only chance of visiting the store, thus, strengthening the dominance. Besides, it is increasing in the technological growth to advance to getting the customers feedbacks for improvement to raise the customer's satisfaction percentage thus, going beyond and above the quality and value expected by the customers.

· Organization (Chart) Structure

Domino's uses a flat organizational structure. This type of structure has few supervisor levels, with the departmental managers having high control and responsibility to their groups (Bjørnstad & Ulleberg, 2021). Domino's uses this structure with multiple management layers that oversee the entire operations. At the top, we have the chief executive officer (CEO) who monitors and manages all the business functions. Below him, we have other top leaders, including the chief operating officer, executive vice presidents on different departments, senior vice presidents, and vice presidents (Domino's, n.d). Each store manager has fourteen workers under him. It is the role of the store manager to handle all staff. Message in the store flows from the top of the hierarchy to the top level of employees.

The structure has been designed specifically for executing the organization's functioning as promoted by the following characteristics of flat organization structure. First, the flat structure supports direct communication between members without hierarchy and intermediaries (Bjørnstad & Ulleberg, 2021). As a result, there is speedy communication from the ones interacting with the customers to the top management for quickly implementing the customers' needs. Secondly, the structure helps improve coordination and responsibility among different levels of employees. Since there are no middlemen or intermediaries when communicating, it becomes easy to coordinate and communicate to employees, improving their responsibilities and reliabilities. Third, the structure is characterized by few management levels, which promotes easy decision-making at the organization (Bjørnstad & Ulleberg, 2021). Dominos has created an easy time executing its strategies and promoting success with these characteristics. The flat organization structure offers the best environment for efficiency and flexibility for business management.

· Summary of the Top Current Risks

From the risk analysis of Domino's, there are several risks that the company is facing. However, the top risk presented involves environmental, social, and governance which is predicted to impact the business reputation if not handled in time. Based on the analysis, Domino's pizza stated that the intention of investors on the environmental, social, and governance (ESG) are going overtime with several groups examining the ESG issues and publishing the assessments public (Sharif, 2022). However, Dominos protected itself by saying it intends to attain the gate of net-zero emissions by the year 2050. It moved further and warned the investors to stop publishing the ESG issues as they are working towards it. However, it may be impossible for Domino's to achieve such a goal because of the uncertainties and risks beyond the company's control. But it was further highlighted that the target mentioned above on ESG issues might lead to the challenges of damaging the company's reputation, thus, financial consequences.

The other top risk to the Domino's is the recurring debt. Even though the debt has been reducing in the past seven years, it has led to the stockholders' equity that is negative (McGrath, 2020). According to McGrath, D. M. (2020), the total debt as of July 2020 was 4.17 billion dollars. This puts the company at risk if the revenue stops growing; there will be a decreasing net profit, thus affecting the stock performance. In turn, the cash flow would also decline, hence the company's bankruptcy. The other risk is the stiff competition from different industrial sectors like Pizza Hut and Papa John's. Such companies have both local and international markets competing for the same clients. As a result, maintaining the growing demand is a challenge as the competition increases. Besides, other new sources like supermarkets and meal kits increase the competition in terms of food quality, image, price, and conveniences.

The two top risks discussed above are a threat to the company in the future. This is because if they are solved in advance, they will lead to the company's dissolution and later closing it. Dominos has to move faster to clear the debt and handle the ESG issue even though they are costly. However, competition is a leading challenge that calls for the company to invest a lot in its strategies to get a higher market share.

· Top 3 Competitors in each of the Domestic and International Markets

· Competitors in Domestic Markets

To the domestic markets, the top three competitors for Domino's are.

· Subway –is a U.S. based restaurant and one of the most valuables brands in the food industry (MBA Skool Team, 2021). The company is growing fast and opening many food outlets all the country to serve its customers to the maximum.

· Dunkin Donuts – is a U.S. based quick-service joint that majors in baked goods, coffee, and ice cream. Its sales are steadily rising as it establishes more stores, everyone, for efficiency (Dunkin, n.d).

· Burger King – the fast-food company, serves over 50 million customers in a month and continuously expands its wings. Besides being fast rising, it is loved by most people.

· Other domestic market competitors include Taco Bell, Chipotle, Wendy's, and Papa John's (MBA Skool Team, 2021).

· Competitors in International Markets

The top international market is as follows.

· McDonald's – the company covers the market share of approximately 18 percent. It's a huge distributor and has a high market force globally, ranking it the second-largest competitor to Dominos.

· KCF – the company comes second after McDonald's in the sales volume making it be an external competitor for Domino. It has expanded to different parts of the world, and its revenue and sales are growing fast (MBA Skool Team, 2021). It has diversity in its menu and includes the option for fast foods. Furthermore, it has several strategic locations globally and has a consistent quality.

· Pizza Hut –specializes in the take outs and deliveries of pizza. The company was recognized to be the fastest in food deliveries. Besides, it has diversified its market and produced other products like breakfast men, desserts, pasta, Italian cuisines, and soft drinks (Pizza Hut, n.d). Apart from the internal competition, it is also an external competitor as it has stores in other countries, including Canada, Germany, Spain, the UK, and France (MBA Skool Team, 2021). Besides, in 2016, it was ranked as the leading outlet for pizza globally.

The internal and external competitors are a real threat to the company. This is cause they both offer common products and compete for the same customers. Having an extra inch in the services and products gives one company a competitive advantage over the other.

References