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History of Domino's Pizza

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Deb Weilnau

on 21 July 2014

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Transcript of History of Domino's Pizza

1983
1960
Tom Monaghan and his brother James buy “DomiNick's”, a pizza home delivery store located in Ypsilanti, Michigan, in the north of the United States.
1965
Tom Monaghan renames his company “Domino’s Pizza, Inc.”.
1978
The 200th Domino’s Pizza store opens.
1996
Domino’s Pizza sets out to conquer the world
1989
Domino's opens its 5,000th store.
Launched their Web site (www.dominos.com), and the company declared global sales of nearly $3 billion.
2010
Domino’s Pizza celebrates its 50th anniversary!
1995
They established their presence in the Belgian market.
History of Domino's Pizza
2009
Domino’s Pizza buys the Pizza Company chain.
1997
Opens their 1,500th store outside the United States, opening seven stores in one day on five continents.
The company adopted a new brand image, supported by a campaign - "Image 2000" - to introduce its new logo and store concept, designed to be both more human and contemporary.
2006
Control of Domino’s Pizza Belgium is transferred to master franchisor Domino’s Pizza Entreprises, bringing together the company's interests in France, Belgium, the Netherlands, Australia and New Zealand.
Domino's Pizza buys the Alvolo chain, converting seven of the company’s outlets to the Domino's format and brand.
1998
Opened their 6,000th store, in San Francisco, California.
Relaunched the brand in France, to make the best possible use of resources and enable stores to take full advantage of the company’s expertise.
Tom Monaghan, founder of Domino's Pizza, announces that he is to retire, selling his 93% stake in the company to Bain Capital, Inc.
Domino's Pizza International now has 1,986 stores located outside the USA, 33 of them in France.
Domino's Pizza ranks fifth among the major American fast food concerns active internationally, making it the world's largest pizza home delivery company.
2000
1994
Their marketing policy widened as chicken wings were introduced to the menu.
They opened a store in Egypt .

Domino's launches its Web site (www.dominos.com).
In 2004, Super Bowl Sunday was the most hectic pizza delivery day of the year when Dominos Pizza sold over a million pizzas, which was an increase of 42 percent on their normal Sunday trading volume. As the company continues to grow so rapidly it is just as well the practice of adding a dot onto the logo was discontinued after three outlets as Dominos Pizza now has over seven thousand outlets globally.


2004
1997 Con't
An internal modern facelift as their stores were all brightened up and the company introduced a new logo.
Opened seven stores in one day but on 5 different continents.
1992
They introduced their first non pizza item to their menu, bread sticks.

Corporate Philosophy & Mission Statement
Vision
Number 1 in Pizza
Number 1 in People.
Values
Mission Statement
Sell more Pizza, have more fun!
Vision
Mission Statement
The CEO said, "We take pride in making a perfect pizza and providing courteous and helpful service ontime all the time. Every customer says, "I'll be back!"We are the employer of choice offering team members opportunities for growth, advancement, andrewarding careers in a fun, safe working environment.We are accountable for profitability in everything we do, providing our shareholders with value growth."
Core Values
Have a PASSION for excellence in everything we do.
EXECUTE with positive energy and urgency.
Be individually and collectively ACCOUNTABLE for growth in people, customer satisfaction and profitability.
Find reasons to RECOGNIZE the achievement of others and have fun doing it.
LISTEN and more importantly, respond to the voice of the customer.
Improved Vision & Mission Statement
Vision: We are not ordinary, we are exceptional. Our vision is to portray this in our day to day operations. Our continued growth and success rely on one thing, the ultimate satisfaction of customers. If we want to be #1 in pizza we have to be #1 with our customers.

Mission: Our mission is to create an atmosphere where hard work, great ideas, and customer service are promoted and incentivized. We set the bar high, we challenge ourselves daily to exceed expectations. From the CEO to the owners of every franchise we are dedicated to the customers, employees, and to each investor. We grow as a company through the union of good business with great customers.
Our Vision is to be the world's most successful and fasted growing pizza chain, recognized by consumers as the unmatched leader in value, quality, service, and convenience.
Mission Statement
Our Mission is to be the best take-home pizza chain by exceeding customer expectations with extraordinary value, great tasting products, and outstanding people while providing strong returns to our stake holders.
Values
Our core values are at the root of everything we do. We believe that our people, along with these guiding principles, are what make our brand strong and successful all over the globe.
Integrity
Value
Product Quality
Ethical Practices
Excellence
Family
Innovation
Have Fun
Perseverance
Teamwork
Vision Statement
Vision Statement
Papa Johns Mission
Statement
Customers
Papa John's will create superior brand loyalty, i.e. "raving fans", through (a) authentic, superior-quality products, (b) legendary customer service and (c) exceptional community service.

Team Members
People are our most important asset. Papa John's will provide clear, consistent, strategic leadership and career opportunities for Team Members who (a) exhibit passion toward their work, (b) uphold our Core Values, (c) take pride of ownership in building the long-term value of the Papa John's brand and (d) have ethical business practices.

Franchisees
We will work as a team with our franchisees to create continued opportunity for outstanding financial returns to those franchisees who (a) adhere to Papa John's proven Core Values and systems, (b) exhibit passion in running their businesses and (c) take pride of ownership in building the long-term value of the Papa John's brand.

Shareholders
We will produce superior long-term value for our shareholders.
Values
Focus
We must keep The Main Thing, The Main Thing. We will consistently deliver a traditional Papa John's superior-quality pizza.

Accountability
We do what we say we are going to do when we say we are going to do it. We earn the right to hold others to a higher level of accountability by being accountable to ourselves, our customers and our business partners.

Superiority
Our customer satisfaction must be consistent, quantifiable and demonstrable. At Papa John's we expect excellence - the "best in its class" in everything we do.

P.A.P.A.
People Are Priority Always. Our success depends upon our ability, as a team, to work together to achieve our goals and expectations.

Attitude
If you think you can or you think you can't - you're right! The difference between winners and losers is a positive mental attitude. Our attitude is a reflection of what we value: successful team members must be upbeat, proactive and passionate about everything they do.

Constant Improvement
We never stop trying to surpass our previous best. We constantly "Raise the Bar." No matter how good we are, we will always get better.

Papa Johns has not declared a Vision Statement.
Treat people as you'd like to be treat.
Produce the best for less.
Measure, manage, and share what's important.
Think big and grow.
Incenttivise what you want to change.
Set the bar high, train, never stop learning.
Promote from within.
We are not ordinary, we are exceptional.
Not just Good....not just great....But THE BEST.
To be the best hospitality business anywhere in the world.
The best branded restaurant
The best delivery business
The best franchise network
The best food, service assets and value
The best for families.
Our Comparison
Domino's Pizza's Mission & Vision statements are simplistic in form. Sometimes "less is better," both statements lack meaning as to what Domino's is all about.
After reviewing Domino's top competitors one glaring point was discovered. While Little Caesars, Papa Johns, and Pizza Hut all mentioned customer service in their mission statements, Domino's just states, #1 in people.
Our ultimate goal is to keep competitive advantage in the pizza industry and in order to achieve this, customer service should be Domino's top focus.
Domino's Pizza
http://www.cbsnews.com/videos/dominos-new-recipe/
Our Team
Domino's Pizza
Domino's New recipe
Presentation Outline
Antonia Martinez: Business Administration
Ann Lambrix: Business Administration
Chris Snyder: Business Administration
Deb Weilnau: Business Administration
Mission & Vision - Toni
Internal Assessment - Toni
External Assessment - Ann
Strategy Formulation - Deb
Strategy Implementation - Chris
Strategy Evaluation - Chris
Conclusion - Ann
Domino's Pizza Case Study
Based in Ann Arbor, Michigan
Largest Pizza Company in U.S.
Internationally they experienced 81 consecutive quarters of positive same store sales growth.
Our agenda is to analyze Domino's and provide a stratgety for sustaining competitive advantage in the market place.
http://pizzaturnaround.com/
Financials
Domino's Organizational Chart
Annual Reports
Market Positioning Map
Domino’s
Advertise toward specialty pizza market as well as cheap pizza deals.
They offer carryout & delivery, no dine in facilities.
No combo meals or family deals
Advertisements are done mostly by the upper management of the company.

Pizza Hut
Restructuring to more carryout & delivery locations than dine in facilities.
Lowered their prices to compete with their competitors.
Advertise specialty pizzas and family meal deals.
Use celebrities to promote their products.

Papa Johns
Focus on ingredients
Use of celebrities/sports figures to promote their product.
Website is geared toward promotions “Papa Rewards”.
Carryout and delivery, no dine in facilities.
Advertise high quality specialty pizzas.

Little Caesars
Mostly Advertise towards convenience, no wait “Hot & Ready” & cheap.
Offer some made to order
Carryout only, no delivery or dine in.
Privately held company.

Internal Assessment
Improved or Recommended Organizational Chart
We are purposing that Domino’s should make the following changes to their Organizational Chart:
Chairman of the board should be stated as “Chairperson,” this should not be held by the CEO or President of the company.
They need to have a diverse management staff, this would add vision and culture that is necessary for company's.
Patrick Doyle should only carry the titles of Chief Executive Officer and Director.
Add a Chief Operations Officer
Promote the Franchise Operations & Development to be the President of that division and have them report to the Chief Operation Officer.
Promote the Franchise Relation EVP to President of that division and have them report to the Chief Operation Officer.

Value Chain Analysis Chart
The customer need drives the entire value chain, the need for a dependable carryout restaurant, that’s reasonably priced, high quality food, and variety suits the local palette. Dominos focuses on key customer needs throughout the value chain, and has not allowed any digressions, unlike other competitors who have a mixed model of full service & carryout restaurants, or a hybrid combination of both. Domino’s focuses on carryout & delivery. Their have a global operational model allows for lean stores, well-trained staff and flexibility at a country level to customize menus that cater to customer tastes. Operational requirements have prompted the use of technology to make the experience more enriching. They were the first to use TV as a distribution channel, an online tracking system that allows customers to track the pizza order and a proprietary point of sale system. A combination of the Company level strategy and the Operational Strategy has resulted in Dominos having a reputation for reliability and consistent pizza quality. These strategies have ensured that Dominos continues to meet its customer needs.

Website Comparison
Facebook Comparison
Internal Factor Evaluation Matrix
Firms Operations
Vision: In the short-term we are looking to redefine Domino’s Pizza in the United States, by re-introducing customer service, a new advertising campaign, lunch combos, and international tastes. In the large-term we are looking to continue expanding abroad and domestically.
Domino's Strengths & Weaknesses
Financial Ratios
Value of the Firm Analysis
Domino’s Organizational Chart Aspects
Competitors Organization Charts
Currently Domino’s appears to have a Divisional-by-Region Organizational Chart. The good and bad aspects of this type of charge are as follows:

Good Aspects
Most commonly used by U.S. businesses.
Creates career development opportunities for managers
Allows local control of situations
Leads a competitive climate with in an organization
Allows new business and products to be added easily

Bad Aspects
Costly because it requires an elaborate headquarters driven control system
Each division requires functional specialists
Some duplication of staff, services, facilities, and personnel are needed to coordinate divisional activities.
Managers must be well qualified because the divisional design forces delegation of authority:; better qualified individuals require higher salaries.
Competition between divisions may become so intense that it is dysfunctional and leads to limited sharing of ideas and resources for the common good of the firm.

The title “Chairman” leads one to get a sense of gender bias.
Patrick Doyle is carrying too much, his role should be reduced to just CEO & Director.
Domino’s current Organization Chart is missing diversity, ethnicity, gender, and age in many aspects.
They are lacking positions for Chief Operations Officer, R&D, Human Resources Manager, Chief Technology Officer, and Chief Strategy Officer.
EVP’s of Franchise Relations & Franchise Operations are lacking guidance that can be provided by having a Chief Operation Officer.

External Assessment
Competitive Profile Matrix
Independent pizza operations make up over 40% in sales and over 50% in stores.
Pizza Hut exceeds Domino’s in both sales and stores, with Papa John’s and Little Caesar’s slightly behind Domino’s.
Other chains make up more than 20% of the industry.

Top 50 U.S. Pizzerias
Key Industry Trends
Growth of fast casual outlets such as Chipotle and Panera.
Consumers willing to pay more for gourmet, fresh ingredients.
Artisan Pizzas.
Take-and-Bake options.
Consumers want healthier alternatives.
International menu.
On the go, quick options.

2014 Bad Winter weather in most of the country.
Cheese cost rising, while consumption is rising as well.
Protein markets have been volatile – high grain costs and reduced herd, pork supplies down due to PED virus that has caused an estimated 7-9 million hog deaths.
Affordable Care Act – Employee Health Coverage.
Cost of fuel rising.
Increase use of technological devices, i.e. smart phones, ipads, etc.
Consumers more educated, want better quality for their money.
Global economy and market increases additional opportunity in other countries.
Michelle Obama campaign against obesity.

Key External Factors
Domino’s Opportunities
Consumers willing to pay more for gourmet ingredients.
Trend toward a better product vs a cheaper product on the rise.
Continued growth in cultural awareness throughout the United States.
Consumers more educated, knowlegable about ingredients and selection.
Frozen pizza segment declining.
17%-20% of the U.S. Quick Service Restaurant (QSR) industry sales comes from the QSR restaurant pizza category.
93% of Americans eat at least one slice of pizza per month*
More families eating out, parents looking for healthy options for children.
Increase use of technology provides more availabilty for advertisement and communication with consumer.
Pizza trucks and trailer based wood fire oven operations are on the rise.**

Domino’s Threats
Intense competition from a fragmented number of small competitors.
Changing consumer habits towards healthier food choices.
Increase in labor costs with rising minimum wages and mandatory insurance coverage.
Increase in food costs.
Increase in fuel costs.
Consumer more focused on the experience of dining out.
Loyalty in consumers for their favorite pizza.
Increased “take-and-bake” alternative to a delivery pizza.
Growth in fast casual options such as Chipotle and Panera.
Increased trend in dine in facilities.

External Factor Evaluation Matrix
Marketing Strategy Plan
Porters 5
The five primary activities are processes that are mainly concerned with the production of the products and services to the external customers. These are necessary to the business processes. The activities indicated as support activities are activities that are vital for the development of the appropriate transforming resources. These can be looked as value adding activities, for instance incorporating the use of technology such as being able to place orders by text message add to the convenience Dominos provides and increases the accuracy of order. All these constitute the business processes of the organization.

Current Position
Desired Position
Meet the Competitors:
Strategy Formulation
Boston Consulting Group Matrix
Specific Strategies – Domino’s
Space Matrix
S.W.O.T
Quantitative Strategic Planning Matrix
Internal - External Matrix
Boston Consulting Group Matrix
Redirect Advertising
Partner with Netflix
Improve Word of Mouth “advertising”.
Improve Facebook/social media presence.
Improve customer service by additional training and focus on satisfaction.
Survey at the bottom of receipt.
Encourage employee participation in store satisfaction with customers.
Hire Jeff Dunham to be spokesperson
Make commercial go viral.


“Oh Yes We Can”…….
Recommendations “Oh Yes We Can!”
Strategies to be continued
Refine Domino’s image by changing consumer negative opinions.
Improving quality of pizza, providing gourmet options and healthier ingredients.
Further develop customer relations by improving training and employee involvement.

New Strategies to be started
Focus on development of new growth markets such as increased international selection, kids menu, and food trucks.
Partner with a non-food operation such as Netflix to create a win-win.
Find a spokesperson who can help drive new awareness to a larger market.

Grand Strategy Matrix
Yes We Can" Initiative promotes increased focus on continued improvement of Domino's image and menu selection. Domino's campaign "Oh yes we did" will be changed to "Oh Yes we can!" We will continue to drive consumers to choose our company over our competitors in the following ways: By improved education and training to our valued employees, we will improve customer relations by our can do attitude, with the outcome of increase in word of mouth sales. We will focus on providing not only a positive experience within our stores and with our product, but also a new and exciting experience, with new cutting edge pizza and menu options. We value our customer’s and in turn, want to provide them with healthy selections as well as kid friendly choices for families on the go. Research opportunities within the food truck industry, providing quick, on the go meals in business communities, fairs, etc.

We want to focus on the future and develop a new Domino’s with a new “can do” attitude, partnering with companies, such as Netflix to increase the customer experience when purchasing our product.

At Domino’s, we like to have fun. We also aren’t afraid to laugh at our mistakes and find opportunities to see the humor in life. By adding comedic legend Jeff Dunham as our spokesman, we will increase our exposure in the marketplace.

Increase Target Market
“Pizza Redefined”
Develop more international selection.
Test Markets (Dearborn)
Lunch Combo
Piece of Pizza, Pop, Salad
Look at what they are doing in schools – push to daily menu.
Kids menu?
Lunch truck?
Target business market (use for test market?)
62
ECG
bpm
EPS / EBIT
Domino’s Pizza financial leverage projections for the next several years do not look good.
Sales and EBITDA both increase but the main concern is Financing and Debt.
This relates to the central problem of future projects. As the next few years approach we predict that there will be negative leverage.
Negative leverage states that the cost of borrowing money is greater than the return on the investment.
The true value of a company is the market value of its assets minus the present value of all its liabilities.
Shareholder Equity is viewed on the balance sheet when estimating the worth of a company.
There are several components to Shareholder Equity including Retained Earnings, Current Profit, and funds paid in by Shareholders.
A good but not optimal solution to solve negative shareholder equity would be capital contributions.
Capital contributions are funds that stockholders invest in a corporation beyond what they have paid in shares.
If stockholders lend the corporation money to grow, these funds will appear in the capital contributions and that causes shareholder equity to rise on the balance sheet.
Funds can be paid to shareholders as a return of the shareholders capital invested, or as a dividend paid out of returned earnings or profit.
The recommended solution for negative shareholder equity is to increase Net Profit.
When a company makes a Net Profit, it will appear as an increase in Shareholder Equity.
All profits in a company can be added to the Retained Earnings the following year or paid out as dividends to investors.
Due to the fact Domino's pizza has a negative ROE, and negative Retained Earnings, it’s extremely critical to add to this account.
When a company’s retained earnings grow over time, they are viewed by potential investors as a stronger company than one that distributes all profit immediately to its owners.
Retained earnings help a company have funds to grow and prosper.
If Domino’s Pizza can increase shareholders equity by raising Net Profit, the company will be valued more highly by investors and traders.
There are other ways to increase Shareholders Equity but Net Profit gives the company the most available options.
To raise Net Profit Domino’s should focus on Marketing; they have strong brand equity.

Projected Income
Projected Balance Sheet
The pizza restaurant industry is a highly competitive industry, where consumers are led by not only their pocketbooks but also their desire for a good meal. Domino’s has a highly recognized name, but will need to continue to adapt to the ever changing times and the current trends in the industry. By focusing on customer service and the customer experience, there is opportunity to continue to grow its market share and gain momentum to surpass Pizza Hut. Domino’s has already identified some of its weaknesses’, but will need to strive to retain their current customer growth as well as drive new consumption. They must focus on not only providing a quality product, but keep one step ahead by offering new and exciting products, in new and exciting ways. We believe that the time has come to stop looking at the past and start focusing on the future. In conclusion, Domino’s must focus on promoting positive customer service within its stores and with its menu selections.

Domino's Case Study
Strategy Implementation
Balanced Scorecard
Conclusion - Strategic Plan
LIT Review
Thank You!
We appreciate your attendance and hope you enjoyed sampling our pizza. We look forward to your support in the near future.
Projected Balance
Projected Statement of Cash Flows
Graphed Statement of Cash Flows
Ratios
Capital Budget
Full transcript