Domino's Pizza - Strategies to Tackle Global Economic Slowdown
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Case Code: BSTR334 Case Length: 17 Pages Period: 2007-2009 Pub Date: 2009 Teaching Note: Not Available |
Price: Rs.300 Organization: Domino's Pizza Inc. Industry: Food and Beverages Countries: US Themes: Business Environment |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Domino's Master Franchise Model
Industry analysts believed that Domino's master franchise model was one of the reasons for its success in international markets in light of the global economic slowdown in 2008...
How Domino's International Bucked the Trend
The strong performance of Domino's international master franchises in the midst of the global economic slowdown was a widely debated topic among analysts. While some analysts believed that the recession had helped the growth of these chains due to the 'trading down factor' of people preferring to eat at home rather than dine out at expensive restaurants, others believed it was a combination of aggressive marketing and the franchise model that had helped the company buck the trend...
Promotional and Advertisement Campaigns
The pizza delivery business had traditionally been promotion driven. Coupons and discounts were offered by all pizza delivery chains to woo customers. Since its inception, Domino's had been known for its unique promotions that included fast delivery and innovations to cater to a varied palette...
The '30 Minutes' Promise
In the year 1973, Domino's began a guarantee scheme that its pizzas would be delivered in 30 minutes or less of ordering failing which the customer would receive the pizza free...
Use of Technology
At DPG, online sales accounted for over 70 percent of its total sales in 2008. DPG planned to further exploit the increasing potential of the online medium as one of the promotional and distributional channels in the downturn, "This is the 10th year we have had an e-commerce platform. We were the first to it back in 1999. We do a number of different activities online to increase sales but there are other things we will be launching this year."...
Domino's US - Experiencing the Downturn
While Domino's was successful in international markets, the company experienced a slowdown on the domestic front. In the US, in 2008, the pizza industry was witnessing a slowdown due to recession in the economy. As a result, a significant number of people remain unemployed while others had to suffer pay cuts...
Future Outlook
Domino's forecast flat same store sales for domestic and international markets combined in the fiscal year 2009.
The company reported that it was not sure whether the increase in sales in international markets would be sustainable due to the adverse foreign currency movements that would impact the royalties from franchises...
Exhibits
Exhibit I: Domino's Store Count and Growth in Number of Stores (2008)
Exhibit II: Annual Same Store Sales Growth and Annual Global Retail Sales Growth (2008)
Exhibit III: Domino's Selected Financial Data (2005-08)
Exhibit IV: Domino's Stock Price Chart (May 2008 - May 2009)
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