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Hey! Domino's ,

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shin sungsoo

on 4 December 2013

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Transcript of Hey! Domino's ,

Vertical Integration
Papa John's
Twice
Domino's Pizza
Hey! Domino's ,
It's my Recommendation!

1. Intro
2. Company
Description

3. External Analysis
4. Internal Analysis
5. Strategic Choice
6. Conclusion
VS
Hey! Domino's ,
It's my Recommendation!

Oh, Jang-Ho
Shin, Sung-Soo
Yun, Mi-Young
Kim, Dong-Hui
Zhu, Min-Xuan

Technological Change
Demographic Trends
Cultural Trends
Economic Climate
Legal & political Conditions
Specific International Events
General
Environment
Technological Change
Mobile Ordering
Delivery Box System
Quick Delivery Service
Demographic Trends
Population
Obesity Population
Income Level
Cultural Trends
Legal&Political Conditions
Menu Labeling
Work Force
Protect Intellectual Property Rights
Franchise
Privacy & Data Protection
Five
Forces
Threat of Buyers
Threat of Entry
Threat of Rivalry
Threat of Substitute
Threat of Supplier
Sales increased 2.5% than 2010
No Product Differentiation
+
Threat of Entry
=
=Threat of Rivalry
Frozen Pizza
Take-and-Bake Pizza
Made-to-order Pizza
Various types of
Alternative Pizza
Other Fast - Food
Threat of
Substitute
Crop Product
Dairy Product
Meat Product
Crude Oil
Threat of Supplier
No Switching Cost
Stable Customer
Threat of Buyers
Supply Chain
DPZ
PZZA
Manufacturing & Supply Center
Quality Control Center
Distributing
Product
Profit-Sharing Arrangement
Valuable?
Rare
Costly to
Imitate?
Exploited by
Organization?
YES
YES
YES
NO
YES
NO
NO
NO
Temporary
Advantage
Marketing
DPZ
PZZA
LSM(Local Store Marketing)
Sports Marketing
Localization & Globalization
Globalization
Valuable?
Rare
Costly to
Imitate?
Exploited by
Organization?
YES
YES
YES
NO
NO
NO
NO
NO
Temporary
Advantage
Customer Service
DPZ
PZZA
Accessibility
Online Web & Phone Call
Technical
Valuable?
Rare
Costly to
Imitate?
Exploited by
Organization?
YES
YES
YES
NO
NO
NO
NO
NO
Finance
DPZ
PZZA
Debt Financing
Defensive Financing
High Risk Firm
Valuable?
Rare
Costly to
Imitate?
Exploited by
Organization?
YES
YES
YES
NO
YEs
NO
General Risk Firm
M.I.S.
DPZ
PZZA
PULSE
PROFIT system
Computerized
Operating Efficiency
Valuable?
Rare
Costly to
Imitate?
Exploited by
Organization?
YES
YES
YES
NO
YES
NO
YES
NO
Reduce Cost of Labor
Dealer Support
DPZ
PZZA
Four Week Intensive Franchise Develop Program
Basic Management
Valuable?
Rare
Costly to
Imitate?
Exploited by
Organization?
YES
YES
YES
NO
YES
NO
YES
NO

Main Company
Domino's Pizza Inc.(DPZ)
Match Company
Papa John's International(PZZA)
Main Company
Match Company
WHY?
Clear Similarity on Business Strategy
Domino's
Papa John's
VS
Domino's
Papa John's
No Dine-In
Cost Leadership
No Dine-In
And The Pizza Industry is
The Most Dynamic Industry
Business Level Strategy of
Cost Leadership
Parity
Domino's Pizza
Cost Leadership
Cost-Efficient Store Model
Focused Menu
Internal Dough Manufacturing
& Supply Chain System
No Dine- In
Domino's Pizza
Business Level Strategy of
Domino's Pizza
Implemetation of
Cost Leadershp
Supply Chain Management
Regional Dough Manufacturing and
Supply Center in U.S
of DPZ Revenues Comes
from Supply Chain
Each regional Supply Chain Center serves
300 stores(On AVG)
of Supply for Nine Products are coverd
16
56%
300
90%
16
56%
300
90%
Twice
a Week Delivery
Business Level Strategy of
Papa John's
Cost Leadership
Cost-Efficient Store Model
Quality Control Center(Q.C.C)
No Dine- In
Domino's Pizza
Corporate Level Strategy of
Domino's Pizza
Vertical Integration
Strategic Alliance
Dough Manufacturing and Supply Centers
16
16
99%
stores.
99%
Cover
with
Single
Cheese Supplier
Single
Domino's Pizza
Corporate Level Strategy of
Domino's Pizza
Implementation
of
Corporate Level Strategy
Organizational Structure
World Resource Center
Supply Chain Center
Store
Maximizing Franchise Networks
50% Profit Refund
No Regional Concentration
Organizational Structure
Maximizing Franchise Networks
Papa John's
Corporate Level Strategy of
Papa John's
Vertical
Integration
Quality Control Center(Q.C.C)
full-service regional Production &
Distribution Center
Once
per
Two
Week
9
9
Once
Two
Corporate Level Strategy of two Company
Evaluation
John Schnatter and partner Bob Ehringer begin selling pizza out of a converted broom closet of Mick's Lounge in Jeffersonville, Indiana.
1984
1986
Franchising of Papa John's begins.
1985
Company headquarters are shifted to Louisville, Kentucky
1989
Papa John's goes public, raising about $12 million through an initial public offering
1993
The Thousand Papa John's is opened
1996
Schnatter opens the first Papa John's restaurant in a retail space next to the bar.
International expansion begins with opening of units in Mexico and Puerto Rico.
1998
1999
Company opens the 2,000th Papa John's restaurant; the U.K. pizza chain Perfect Pizza Holdings, Ltd. is acquired; Papa John's moves into third place among U.S. pizza chains.
2005
Nigel Travis is hired as president and CEO, with Schnatter remaining chairman.
Vertical Integration
To avoid the threat of Supplier
To reduce input Costs
To standardize Product Quality
To Relieve store manager's efforts
Opportunities in Pizza Industry
Fragmented Industry
Major Opportunity
Consolidation
Organize Cooperative Association
Merge & Acquisition
Overview
Domino's Pizza
Domino's Pizza
Second-Largest Pizza Chain
10,255 Stores
70 Countries
10,255
70
Second
1960
1983
Domino's Pizza sets out to conquer the world
1965
1990
Domino's Pizza International open its 2,000th store outside the U.S.A and celebrate 40 years Birthday.
2000
2007
Tom Monaghan rename his company "Domino's Pizza, Inc."
Mission Statement
Domino's Pizza
Domino's Pizza
" To be the BEST Pizza Delivery Company in the World "
Total Revenue
$ 1,678
million
$ 1,678
Overview
Third-Largest Pizza Chain
4,163 Stores
32 Countries
4,163
32
Third
Total Revenue
$ 1,342
million
$ 1,342
Papa John's
Papa John's
Papa John's
Papa John's
Mission Statement
"Better Ingredient, Better Pizza"
Monaghan brothers buy "Domi-Nicks", a pizza home delivery store located in Michigan
Domino's Pizza signed
its 1,000th Franchise.
Domino's rolls out
online and mobile ordering
Path of inflowing Pizza in America
Cultural Input
How People Enjoy!
Parity
Temporary
Advantage
Parity
Parity
sustainable
Advantage
Parity
Sustained
Advantage
Parity
DPZ
PZZA
Prep Pizza School
People Soft Program
Focused on Product
Valuable?
Rare
Costly to
Imitate?
Exploited by
Organization?
YES
YES
YES
NO
YEs
NO
No
NO
Focused on Management
Temporary
Advantage
Parity
Human Resources
Conclusion
External Analysis
Internal Analysis
Strategic Choice
Strategic Choice
Recommendation
Threat of Entry
Threat of Rivalry
Threat of Substitutes
Threat of Supplies
Threat of Buyers
High
High
High
High
Normal
Resources&Capabilities
Competitive Implications
Logistics
Marketing
Customer Service
Dealer Support
Finance
MIS
Human Resource
Temporary Advantage
Temporary Advantage
Temporary Advantage
Sustained Advantage
Sustained Advantage
Sustained Advantage
Temporary Advantage
Business-Level
Corporate-Level
Cost Leadership
Logistics
Enhance Relationship with Franchisees
Outsourcing
Marketing
Brand Loyalty
Global Marketing
Customer
Service
Enhance Online Ordering
Develop Rewarding Policies
M.I.S.
Reduce Cost!
Protect Information
Finance
No more Debt
Maintain Stable Profitability
Dealer
Support
Online Support
H&R
Develop systemic personal management sytem
Unemployment Rate
Food Sales Growth
Economic Climates
Domino's Pizza
Domino's Pizza
Business Level Strategy of two Company
Evaluation
Domino's Pizza
Domino's Pizza
Papa John's
Papa John's
Cost Leadership
However,
DPZ and PZZA have Different Scale of Vertical Integration
The Number of
Dough Manufacturing Facilities
Cycle of
Supply Delivery
16
9
Twice in
A Week
Once in
Two Weeks
Papa John's
Papa John's
Domino's Pizza
Domino's Pizza
Corporate Level Strategy of two Company
Evaluation
DPZ and PZZA have Different Scale of Vertical Integration
Different Scale of Investment
Domino's Pizza
Domino's Pizza
Debt Financing
Aggressive Investment
Papa John's
Papa John's
Healthy Financing
Stable Running
Corporate Level Strategy of two Company
Evaluation
Debt Ratio
ROA
3.79
0.584
41.81%
15.24%
Domino's Pizza
Domino's Pizza
Papa John's
Papa John's
>
>
High Risk Taking
High Profits Making
Stable
Running
Recommendation
Domino's Pizza
Domino's Pizza
Enhance Risk Managing Capabilities
Maintain Stable Supply Arrangement
Corporate Level Strategy
In Cost Efficient Store Model
In Cost Efficient Store Model
First-Mover
Follower
Follower
First-Mover
Recommendation
Domino's Pizza
Domino's Pizza
Business Level Strategy
Find and Develop
Find and Develop
Another Cost-Leadership Method
EX) Reduce Delivery Cost
Domino's Pizza
Business Level Strategy of
Domino's Pizza
Implemetation of
Cost Leadershp
Cost-Efficient Store Model
No Dine-in!
Focused on
Delivery & Carry-Out
No Dine-in!
Delivery & Carry-Out
Reference
YEs
NO
Sustained
Advantage
Domino’s Pizza Inc. (NYSE: DPZ),April 16, 2012
A Project Report On Human Resource of Domino’s Pizza , 2011
How Papa John’s implemented career succession planning with People soft, Lena J. Weiner, 2013
Pizza Franchise Industry Report 2010,2010
86p, USDA Agricultural Projections to 2022, Feb, 2013
9p, Domino’s Pizza 10-K Report, Dec, 2012
Companies and markets, Dec, 2012
Convenience Store Decisions, Oct, 2013
Valuable
ROE
-8.83%
31.4%
31.53%
DPZ

Industry
PZZA
Valuabe
ROE
-8.83%
31.4%
31.53%
DPZ
Industry
PZZA
Because DPZ has negatgive(-) Exquity
-> Implementing Debt Financing
Valueable
But! Financial srength is Impoving
Valuable
ROA
ROC
Pretax Margin
DP
Z
23.45%
48.15%
10.79%
Industry
15.10%
22.33%
9.90%
P
ZZ
A
14.88%
23.23%
7.33%
And Profitability is Increasing!
Valuable
From 2008 To Nov, 2013
X 16
Stock Price of DPZ
Rarity
Current Ratio
DPZ
1.2
Industry
1.1
PZZA
0.93
-Fast Inventory Turnover
-Short Receivable Collection
Costly to Imitate
Debt Financing
Total Debt to Asset :
326.39%
(Papa John's : 20.13%)
very High Risk
Organizational Exploitation
DPZ
Financial Reporting
PZZA
Financial Reporting
Effective
: Timely Decision
Not Effective
: Potential of Information Deficiency
(Material Weakness)
Full transcript