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Dominos Pizza Case Solution

Solution Id Length Case Author Case Publisher
2877 1477 Words (7 Pages) David E. Bell, Phillip Andrews, Mary Shelman Harvard Business School : 512004
This solution includes: A Word File A Word File

Domino’s Pizza company developed an effective supply chain system, emphasizing national distribution, standardization in terms of quality and a centralized procurement setup. The ingredient consistency ensured by the company helped the franchisees of Domino to concentrate and invest in providing good customer service. The company’s actions to incorporate technology in business operations streamlined its inventory management as well as order processing. For international expansion, master franchise models are used by the company where the menus are modified according to the regional taste and preferences while also ensuring brand consistency. In order to manage the fluctuating commodity prices, the company worked and maintained close relationships with their leading suppliers and conducted risk assessments to address the mitigation plans. Despite the volatile prices, Dominos flourished because of its network system that ensured reliable deliveries and consistent quality while maintaining a strong relationship with its wide network of franchises. Overall, the company’s success in the highly competitive pizza industry can be attributed to its strategies that revolve around developing an effective supply chain system and risk mitigation.

Following questions are answered in this case study solution

  1. Use capital IQ (or any source for company financials including the 10K) to determine how profitable is Dominos. Who would you compare Dominos to?

  2. What is the Dominos value chain…who are their suppliers and who are their customers?

  3. Explain how Dominos adds value for its customers?

  4. Are Dominos investments “preemptive”?

Case Analysis for Dominos Pizza Case Solution

1. Use capital IQ (or any source for company financials, including the 10K) to determine how profitable Dominos is. Who would you compare Dominos to?

Based on the insights gained from various authentic sources, Dominos depicted mixed performance. Talking about their global retail sales growth, the company exhibited a growth rate of approximately 5.1%, excluding the closer of the Russian market, which indicates that Dominos successfully experienced positive expansion despite all the challenges it faced. Apart from this, during the third quarter of 2023, Dominos experienced a sudden decline of 0.6% in the same store-sale while, internationally, 3.3% of growth was seen in the same store-sale. This shows that the company might have struggled more in the domestic market. Based on the findings, it can be concluded that Dominos shows areas of strength in international markets. 

The profitability of the company can also be assessed through financial metrics like its profit margins, operating incomes as well as through its net incomes. Dominos experienced a decrease of $41.2 million as compared to 2022. This was the result of lower revenues generated through its supply chain. The income from operations significantly increased by $13 million when compared with 2022. This might be due to the higher royalty revenues from franchises. Talking about the net income, it increased by $47.2 million when compared to the previous year- 2022. 

For comparison, Domino can be compared with the major players in the fast-food industry, which might include food chains like Papa John's or Pizza Hut. Comparing their financial aspects with that of Domino will provide better insights into the profitability of Domino in the competitive industry. 

2. What is the Domino's value chain…who are their suppliers, and who are their customers?

Domino's value chain encompasses various activities that it goes through to deliver its products to the end consumers. The value chain of Dominos begins with the procurement of their essential ingredients, like dough, cheese, pepperonis etc., from leading suppliers by partnering with them. After the procurement, the next stage involves centralized dough production and its distribution along with other ingredients to the franchises using tractor-trailers. In the next step, Domino ensures that their menu and quality show consistency across various franchises. They also provide support to their franchises in order to help them with store operation management and customer service. This is mainly done through systems like pulse point-of-sale.

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