Domino’s Pizza

Group 6

Mani Shankar- 1902084

Kulkarni Onkar – 1902116
Mannat Pal– 1902131
Manne Lakshmi Sowmya- 1902132
 In 1960, brothers Tom and James Monaghan
borrowed $500 to purchase the Dominick’s pizza
store in Ypsilanti, Michigan. After just a year in
the pizza business, James traded his interest in
the business to Tom for a Volkswagen Beetle.

Awarded its first franchise license in 1967 and

About the first franchised store was opened in Ypsilanti.

Domino’s

First international franchise license was granted

in 1983 in Canada. By 1983, they already had
1000 store in operations.
Domino’s was the first to utilize the belt-driven pizza
oven and an innovative “Spoodle” to put sauce on a
pizza.

Was the first to use corrugated cardboard pizza boxes

and took it a step further when they developed the
“Heat Wave” electrical delivery bag to keep pizza hot
during transit.

Monaghan sold 93% of the company to Bain Capital for

almost $1 Billion.

By July 2011, Domino’s had grown to 9,436 company

owned and franchised stores in US and other countries
making it the second largest pizza company in the
world.
Innovation
s Belt Driven Pizza: Which had one temperature
setting and a conveyor belt that moved
items through the oven resulting in consistent
and effortless baking.

Spoodle: Cross between spoon and ladle to help

reduce the time it took to sauce the pizza
Continued
… Pizza Screens: Replaced wooden and stainless
steel pizza cooking trays with pizza screens that
allowed for more even baking.

Corrugated Cardboard pizza box: To make sure

the pizza arrived hot for the customers
Continued
… Heat Wave Electrical deliver bag: To keep pizza
hot during Transit.

The Make Line Station: Assembly line for pizza to

support speedy pizza making
 Franchise Models
Domino’s US Franchise Structure Domino’s International Franchise Model
 Developed a cost-effective business model  A Master franchisee is granted with exclusive
with low capital requirement, a focused rights for a country.
menu of affordable pizza and an interior
specially designed to support delivery and  The master franchisee can sub-franchise the
carryout brand.
 Average investment $150,000 - $250,000.  Brand protection through safety audits and
(Relatively low in QSR Segment) enforcement of a supplier approval
 Domino’s franchisee was granted a specified  process.
delivery radius.  Allowed for special toppings and pizza
 Delivery radius based on ability to delivery designed to meet local tastes and food
in 10 minutes or less. customs.
 The franchisee agreement is for 10 years  Master franchisee terms last for 10-20 years.
which can be extend.  In 2011, 45% of Domino’s international
 Average franchisee owned 3-4 stores. stores were operated by 4
master franchisees.
 Stores were small, approximately 1,200 to
1,500 sq. ft.
 Rigorous standards for its franchises (operate for one year
before granting franchise).

Domino’s also restricted franchisees from pursuing active,

outside business endeavours so as to align their interests with
How does brands.

Domino’s
supply chain Each franchisee had discretion over the prices charged to its
customers.
services
model
Domino’s provided virtually all of the company’s 4,900 US stores
support its with over 240 individual products.
brand and its
overall 99% of franchisee owners chose to be customers of the
strategy? Domino’s supply chain.

This ensured economies of scale and lower costs and to tightly

control quality.
Offering Pulse point-of-sale computer system which apart from assisting in everyday operations,
had a forecasting software that allowed store managers and owners to track inventory and
sales.

Each supply chain centre (SCC) served about 300 stores located within a one-day delivery
radius.

Domino’s guaranteed delivery within 48 hours of when the order was placed, and the company
regularly achieved an on-time delivery performance rate of 95%, with the majority of orders
delivered within 24 hours.

Store owners could buy capital items such as ovens, coolers , pizza preparation areas, counters
and fixtures, signage, and other large equipment as well as re-use items including delivery
bags, uniforms, small wares and promotional materials.

Profit sharing with those franchisees which opt for Domino’s supply chain.

Assisted franchisees during disasters.

  Vision is to make it as easy as possible for franchisees
and store managers to run their stores.
 This system allow store managers to focus on store
operations and customer service rather than worrying
about raw materials.
Does  Pulse POS computer system easy information flow within
Domino’s the store and with the SCC.
supply chain  Raw-materials always available at low-cost.
services  Raw materials can be replenished mostly within 24 hours.
model  Provided belt-driven oven on which all of the items can be
provide a prepared.
competitive  Profit sharing of SCC’s profit encouraged the franchisee
owners to make Domino’s as their sole supplier.
advantage?
How?  Assistance during natural calamities like during Hurricane
Katrina.
 SCC enables to leverage strong supplier relationships to
achieve the cost benefits of scale and ensure rigorous
quality standards.
  Franchisee owners might feel too much bounded by
Do you see any Domino’s conditions.
major flaws in  Internationally, “master franchisee” model might
Domino’s reduce Domino’s leverage during negotiations as
current supply these franchisees might become too much powerful.
chain services
model? How  Domino’s present supply chain model is tested in only
might you one country i.e US and might fail in other countries.
change it or  Less flow of process innovation and other ideas from
make franchisees to Domino’s.
improvements?
  Yes but for good.
 Case 1 – An employee at a Domino’s store in North
Carolina made a video that showed food being
prepared in an unsanitary manner and posted it
online via YouTube.
 Case 2 – Domino’s learnt that when it comes to taste,
a major consumer survey ranked Domino’s pizza
products last among national brands. Yet, Domino’s
ranked higher than any other pizza chain for overall
Has customer satisfaction.
Domino’s  The video was ultimately found to be an hoax and
Domino’s second incident as a major opportunity to
gone too far improve on its weakness and gain market share from
with rivals.
transparenc  Just two days before the beginning of the company’s
anniversary year, Domino’s launched a bold and
y? transparent national ad campaign that openly
acknowledged problems with the taste of Domino’s
pizza. This was followed by a review of “New
Offerings”.
 This “new and inspired” pizza campaign had a direct
impact on the domestic sales posting an historic
14.3% same-store sales growth over 2010 and 30%
increase in order volume..
Should Domino’s attempt to expand
its supply chain internationally?

 We strongly agree that Domino’s should introduce and expand its

supply chain internationally, especially to a huge country that has
huge populations such as UK, China, India, Canada, Australia etc.
 Although its franchise model for international is different from the
US structure, it doesn’t become a barrier to Domino’s to expand
its supply chain system.
 Domino’s had identified many markets where the number of
stores could be increased significantly internationally.
  Seniors Leaders meets every month to discuss
the commodity market outlook and how-to
manager purchasing and supplier relationships.
 Company extended the menu and tried to
increase the taste.
Recommendations  Launched many national advertisements to show how
they reinvented their entire business model.
 Made use of technology such as Online Pizza
Tracker, online ordering, iPhone application etc.
Thank you