Value Chain Analysis of Domino's Pizza Company

Management accounting

Table of Contents
Introduction......................................................................................................................................4
Question 1........................................................................................................................................4
a) Value chain concept.................................................................................................................4
b) i)Mission and vision of the company......................................................................................5
b) ii)Competitive Strategy...........................................................................................................5
b) iii)Value Chain Model For Dominos Company......................................................................6
b) iv) Value Adding Process........................................................................................................8
b) v) Conclusion..........................................................................................................................9
Question 2......................................................................................................................................10
a)Estimated Allocation Rates For Fixed and Variable Overhead for current period................10
b) Total Overhead Cost allocated to Job 20 in October.............................................................10
c) Total Cost of Job 20...............................................................................................................10
d) Amount of Fixed and Variable overhead allocated to jobs in October.................................11
Question 3......................................................................................................................................12
a)Identification of Cost Pool......................................................................................................12
b)Determination of cost driver for each cost pool.....................................................................13
c) Allocation rates of each cost pool and cost driver.................................................................14
Conclusion.....................................................................................................................................14

INTRODUCTION
In the present competitive scenario, it is essential for the companies to analyze the internal and
external environment along with buying behavior of consumers by which they can cope up with
the competition. With this aspect, value chain analysis is one of the most important tools by
which company can identify their internal capabilities. The present study shows several aspects
related to the value chain analysis of Domino’s Pizza Company. It is one of the leading
companies in the international market. Further, the study revolves around the allocation of the
cost method. In this study, the allocation of cost by the job costing method and activity based
costing method is also described. In the job costing system, the cost is allocated on the basis of
an individual unit of the output. Further, in the activity based costing, the overhead cost is
allocated on the basis of activity of the company.
QUESTION 1
a) Value chain concept
In the rapidly changing environment, high-quality product is offered by the organizations for
achieving enduring competitiveness. For achieving the objectives, the company has to match and
further go beyond its competitors and should discover the need of the customer and strategise to
fulfil their expectations (Mudambi, and Puck, 2016).
Value chain analysis is a procedure in which company recognize its supportive and important
activities which adds value to its final product and further, examine such activities to decrease
cost or else add to differentiation (da Silva et al. 2017).
The strategic tool of value chain analysis is used to examine the internal activities of the
company. Its major aim is to identify the most valuable activity of the firm and which can be
improved to provide a competitive advantage (Ivanov, 2017). The organized sight of companies
is suggested by the value chain analysis however it steps are included in the process of
transformation by means of outputs and inputs for every different stage (Ou-Yang et al.,2018).
The concept of value chain analysis is majorly based on the fiscal principle of advantage. When
there are more productive advantages in comparison to competitors in that case companies are

served outstandingly well. At the same time, companies are supposed to ask themselves how
they can deliver the best value to their clientele. There are various ways in which Value chain
management brings various benefits, like the improved flow of products and material, the
faultless flow of information, and the improved flow of finances (Loving, 2019).
B) i) Mission and vision of the company
The present study is related to Domino’s Pizza Company. It was established in the year 1960, as
American Pizza Restaurant Chain. Headquarter of the company is situated in the United States.
The company holds the seventh position with respect to a number of locations across the world
of their their fast food restaurant chain.
The major aim of the company is to become the world’s best pizza delivery company. Except
this, they made efforts to develop their workers and cater their customers to achieve greater
benefits. In Mexico, they want to maintain high standards of a global chain of pizza delivery.
They want to provide the best experience to the customers in addition to outstanding customer
services (Khakzad, 2015).
Revised Mission Statement: the focus of the organization is to uphold outstanding brand loyalty
and well-organized customer service, throughout remarkable franchisees, and ground-breaking/
competent delivery, while satisfying and rising employees within a fun ambience (Khakzad et
al., 2016). It has been analyzed from the past experience that Domino's the first choice for pizza
around the world. They are focusing on being the best pizza operator with skilled talent. They
want to be number one in people as well as pizza. They don’t want to be ordinary are working to
be exceptional (Bevilacqua et al., 2018).
b) Ii) Competitive Strategy
It is important for an organization to have operational plans to compete in the market as well as
to achieve its strategic plans in consideration with its planned requirement. Before making the
strategic plans, it is essential for an organization to have an accurate organizational audit
(Landucci et al. 2018). Market segment of dominos is kept on changing like it enterers in the
market of Europe which is different from the market of Australia, and there is no similarity in