Case Study on Papa Johns

International, Inc
 History
1984 John Schnatter and partner Bob Ehringer begin selling pizza out of a
converted broom closet of Micks Lounge in Jeffersonville, Indiana
1985 Schnatter opens the first Papa Johns restaurant in a retail space next
to the bar.
1986 Franchising of Papa Johns begins.
1989 Company headquarters are shifted to Louisville, Kentucky.
1993 Papa Johns goes public, raising about $12 million through an initial
public offering (IPO).
1996 The thousandth Papa Johns is opened.
1998 International expansion begins with opening of units in Mexico and
Puerto Rico. Company opens the 2,000th Papa Johns restaurant; the U.K.
pizza
1999 chain Perfect Pizza Holdings, Ltd. is acquired; Papa Johns moves
into third place among U.S. pizza chains.
2005 Nigel Travis is hired as president and CEO, with Schnatter
remaining chairman.
 Business Segments

Papa Johns had five major reportable segments of its

business:

I. Domestic restaurants.

II. Domestic commissaries.

III. Domestic Franchises.

IV. International operations.

V. Variable interest entities.

 The Central Commissary
An important part of Papa Johns Strategy revolved around the
central commissary.
It allowed to exercise control over the quality and consistency
of the products.
The system not only reduced labour costs and reduced waste
because the dough was premeasured, but it maintained control
over the consistency of the product.
This system let Papa Johns to open more stores because it
didnt require the purchase of additional expensive equipment
for each store.
 Technology, Menu enhancements, and
company growth
Long strived to be on the cutting edge of the use of technology.

Introduction of online ordering in 2011.

First Pizza company to offer online ordering.

Papa Johns also started text message ordering.

Used Internet and mobile technologies to make increase

awareness among potential customers through promotions and
order pizza virtually from anywhere
Its use of Innovative marketing, product offerings and industry-
leading technology as major advantage over its competitors.
 Key elements of Strategy
Papa Johns outlines its company strategy in one
annual report as follows: Our goal is to build the
strongest brand loyalty of all the pizzerias
internationally.
The key elements are as follow:
High quality Menu Offerings
Efficient Operating System
Commitment to team member training and
development.
Marketing
Strong Franchise System
Cost Management:
Leasing building space provide the flexibility to move
locations quickly
Leased the trailers used to distribute ingredients

Partnered with a third-party entity formed by franchisee,

BIBO Commodities, Inc. To reduce cheese price volatility

Operational Support systems:

Created Operation Support Service and Training (OSST) for
training & development of team members
Printing company for high-quality service
Community Affairs:
Sport team sponsorships

College scholarships ($5 million)

National FFA, Cerebbral Palsy K.I.D.S Center,

Children Miracle Network

Marketing Partnerships:
Coca-Cola (sole supplier in Papa Johns store)

Endorsement

Blockbuster Video (30-day trial of free Blockbuster

 Five Force Analysis
Threat of New entrants
It is easy for new pizza parlor or pizza business to set
up
Threat of Rivalry
Small differences in terms of product amongst rival
business. Each claim to have better products but
customers perceiption is various
Threat of Substitutes
Pizza is not a staple food. It is easy for customers
choose other food
 Threat of Suppliers
Our biggest concern is the supply & volatility of
cheese price but this has been mitigated through
the creation of procurement center & hedging
Threat of Buyers
The firm does not have a highly differentiated
product, customers can choose different pizza
restaurant
Determine the industry
SWOT Analysis
Papa Johns Internal Analysis
VRIO Analysis
Value
High quality pizza with fresh
ingredients (proven with Pizza
Hut lawsuit)
Rarity
The high quality resources are
not rare and can be found
easily since flour, dough,
cheese, and other spices and
ingredients are common even
in the supermarket.
Commissary system is
common among restaurant
industry because it is part of
food service system.
Temporary Competitive Advantage
Imitability
Lots of Papa John
competitor tried to copy
however they ended up
doing price war instead of
quality war with Papa
John.
Organization
Organizational structure
available to support owned
& franchised stores both
domestic & international
Papa John Looking Forward

Opening 200- 4,000 stores

6,000-7,000
300 stores in 5 year
worldwide
per year from 2007
Ensure
steady
Reduce stream of
company-run revenue
stores despite
difficult
environment
 How the firm plan to bring about?

Papa Johns sets-out

these strategy to
achieve its goals
(stated previously)
Thank You