Domino’s Pizza in China
Yen Nguyen
Florida Atlantic University
MAN 6937: Global Environment of Management
Dr. Mantha Mehallis
Spring 2014
The company background
Two bothers Tom and James Monaghan bought Dominick’s a small pizza store in Ypsilanti, Michigan in1960. Eight months later, James traded his half of business for his brother and Tom became the sole owner. In 1965, James renamed the business Domino’s Pizza Inc., and the first Domino’s Pizza franchise store opened in 1967. Domino’s developed significantly and by 1987 the company had expanded to 200 franchises throughout the US. Domino's opened its first international store in Canada in 1983, and Domino’s had opened its 1,500th international location by 1997. One year later, Monaghan sold his 93% share of the company to Bain Capital, Inc. for about $1billion. Domino's went publicly trading stock on the New York Stock Exchange in 2004.
Domino's Pizza is now the second largest pizza chain in America and the largest global presence with 9,000 corporate and franchise outlets operating across 60 different countries employing 145,000 employees worldwide (Domino’s, 2014).
Domino’s general fiscal situation
Domino's sales have increased in recent years, especially from the pizza chain’s international business. In 2012, domestic franchise net unit growth was $21million while international net unit growth was $492 million and net income inclined to $112.4 million from $105.4 million in 2011(annual report in 2012).
In the last quarter 2013, Domino’s reached a quarterly profit of $44.7 million which increased 19% from the previous quarter, and its sales at new opened restaurants rose 3.7% in the U.S and 7% abroad. Revenue went up 5% to $566.5 million generated from higher s...
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...represents a logical market entry point for those firms that seek to exploit opportunities throughout China in the coming decades. Gaining experience in the relatively affluent and favorably predisposed Shanghai market will provide franchisors with valuable experience as well as a strategic springboard to other substantial Chinese markets.
Recommendations of what adaptations and/or changes you believe would make your company more successful in this country (1/2)
- research more in-depth local cultural and business practices
- Adjust the franchise according to regional preferences/ should start with a partner who live in the local area/ nation to help instruct about favorable ingredients and taste
- Make changes to local taste, favor and size
- Wisely take corporate social responsibility may help improve the reputation and brand-name : collectivism.
- Location
Little Caesars SWOT Analysis consists of strengths, weaknesses, opportunities, and threats. Strengths for Little Caesars Pizza Inc. is the company is the largest carry out pizza chain in the world. Hot-N-Ready pizzas which are already made when customers come in the door. Little Caesars name has been strong for over 50 years. Weaknesses Little Caesars have came across is different franchises management can result as a problem, profits of Little Caesars declined in the 1990’s due to the company’s attempts to offer free delivery leading a number of franchisee to shut down.
PepsiCo can potentially acquire California Pizza Kitchen and integrate it in the company’s decentralized management approach. Since PepsiCo executives have experience in the quick service food industry, it should not be a reach for the company to successfully run this casual dining restaurant. For this venture to be successful, it is imperative that management cut down the operating costs at California Pizza Kitchen through the PepsiCo Food Systems distribution network and improve on the 3.1% operating margin that California Pizza Kitchen is currently operating at.
Financial analysis -net revenue grew in 2013 and declined 2014 to 2015. Net revenue declined approximately 15% in 2015. The main reason causing this decline is the increase in fixed assets over one year, meaning, the company’s assets were just sitting idle. After ROA declined in 2015 (company is not profitable) it does appear that it is increasing by 4% in 2016 due to rebranding of products.
One who wants a pizza from Little Caesars can get a large for five dollars. Pizza Hut’s large size pizza range from ten dollars to fifteen dollars.
Pizza hut benefited from a first-mover advantage in international markets and operate more stores in China than Papa John’s has in total. Papa John’s needs to take advantage of different markets overseas.
First we will take a look at France. Over the past few years in France, "franchise" has evolved from a concept into a truly viable economic model. For the tenth straight year, the number of franchises in France has increased steadily by 3-5 percent in 2003. That same year, 55,880 stores opened in France, 34,745 of them as franchises an increase from a 57.8 percent share in 2002 to 61.2 percent in 2003. The number of companies in France using franchises rose from 719 to 765 over the course of 2003, an increase of about 6.4 percent. French franchises are also exported with 179 networks located outside of France. This shows that the opportunity for a reputable franchise to become established in France is continuing to grow. The overall acceptance of American franchises is beneficial when contemplating how the community will take to a business opening shop.
The pizza industry consists of two rivals, independent pizzeria’s and pizza chains. The competition is constant and the two opponents use frequent promotions and coupons to win customers over. However, chains are more aggressive and have better resources to penetrate the market. Independent pizzeria’s use a different concept in their menu variety, offering a broader selection of toppings and a range of entrees to lure customers in. Pizza Chains like to keep it simple, they promote a standardize menu and utilize their delivery and take out service to gain more customers.
In addition to royalties, franchisees usually pay into a national monthly advertising/marketing fund, which amounts to 1-2% of gross sales. 639
Papa John’s was opened in 1985 by John Schnatter, and the first franchise was sold in 1986. Papa John’s has over 65,000 pizza restaurants in the United States. However, the public was introduced to the first international restaurant opening in 1998 by the way of “Perfect Pizza” in the United Kingdom (www.papajohns.com, 2017). Regardless, Papa John’s is a significant player in the pizza industry they continuously want to know what the future pizza industry will hold for them. At one time, the overall performance of Papa John’s stock was not doing so good when they are compared side by side with other pizza industries. However, the potential is with the pan pizza the management team believes this will be the best introduction in ten years (Maze, 2016).
Domino’s started back in 1960, in the USA, when Tom Monaghan founded Domino's Pizza. Through franchising, Tom opened up many more Domino's Pizza stores. He expanded the Domino's chain around the world, creating a leading pizza delivery business. Their passion for delicious homemade pizza has earned them loyal customers all across the world. (Domino's, 2017)
DOMINO’S PIZZA was found Tom Monaghan in 1960 and it is growing to 8000 store in 2006 that 3000 of them are international store.
Another area of concern is how Domino’s will be recognized as a business; currently the following are the expectations from the Cuban
In this two-year period, gross sales had a 17% increase while COGS increased by about 21%. If this rate keeps up, Guna can be sure to have a negative net profit in the coming years. So, despite their growth in sales from 2010 to 2011, Guna’s net profit decreased by an almost 30%. That is a significant drop relative to their increase in sales. By looking at the net profit as a percentage of sales, in 2011 the net profit was only 3% of sales as compared to about 6% in 2010. This should be a big concern and a cause for
* Describe the approaches you would use to energize your employees, improve their ability to contribute, and increase their engagement.
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