SOE09401 - Strategic Management in a Global Context

Running Head: STRATEGIC MANAGEMENT IN A GLOBAL CONTEXT 0
(student name)
Strategic
Management In A
Global Context

STRATEGIC MANAGEMENT IN A GLOBAL CONTEXT 1
Contents
Domino’s Pizza: a case study in organizational evolution..............................................................2
Q1. Porter’s five-force model..........................................................................................................2
1. Competition within the industry...........................................................................................2
2. New potential entrants into the industry...............................................................................3
3. Power of customers...............................................................................................................3
4. Power of suppliers................................................................................................................4
5. Substitute’s products threat...................................................................................................4
Q2. Value chain analysis.................................................................................................................5
Value chain activities...................................................................................................................5
Value chain linkages: core competencies....................................................................................8
VRIN criteria...............................................................................................................................9
Q3. Organizational culture.............................................................................................................10
Q4. Domino’s Ansoff’s matrix......................................................................................................14
Recommendation for future growth options..............................................................................15
Conclusion.....................................................................................................................................17
References......................................................................................................................................19

STRATEGIC MANAGEMENT IN A GLOBAL CONTEXT 2
Domino’s Pizza: a case study in organizational evolution
Q1. Porter’s five-force model
This is a business analysis model that will evaluate the attractiveness of the industry in which
an organization is operating. This model was explained initially in Michael Porter’s book in
1980. The industry structure of an organization and its corporate strategy is analyzed with the
help of five forces that are undeniable and play an important role in shaping every industry and
market worldwide[ CITATION Man14 \l 1033 ]. In the case of Domino’s pizza, the pizza
industry will be analyzed, based on the following five forces:
1. Competition within the industry
Three major competitors of Domino’s are Pizza Hut, Papa John’s, and Little Caesar Pizza.
Pizza Hut- it is one of the most prominent competitors of Domino’s. Dominos’ is
number one in US delivery section but the top company in the pizza segment is Pizza
Hut. The company is older than Dominos but has targeted 95 countries with 13,000
stores. It majorly focuses on various Pizza, which is ready to eat, where the customer
can customize the toppings option as per their local culture and taste. Moreover, the
company is focusing over more competitive priced items in the menu, and likes to be
known for “pizza pasta and wings brand”[ CITATION Por14 \l 1033 ]
Papa John’s – considering pizza delivery segment, this company ranked at third
position after pizza hut and Domino’s. John Schnatter established the company in
1984. It has targeted more than 32 countries in 52 states, with more than 3,646
restaurants owned and franchises. This company operates within six segments, which

STRATEGIC MANAGEMENT IN A GLOBAL CONTEXT 3
are Domestic commissaries, domestic restaurant, domestic franchises, variable
interest entities, international operation, and various other business units.
Little Caesar’s – this in the pizza industry stands out to be at the fourth position. A
family-owned enterprise franchises and owned 2600 units in the United States and 11
various nations. The major positioning of the company is opening up stores in strip
malls and is considered as the fastest growing restaurant chain in the United States in
2009. The company was popular for two for one Pizza, this marketing campaign
initiated in 1971, however, in 1975 became an everlasting fixture[ CITATION
Bet17 \l 1033 ].
2. New potential entrants into the industry
Another force that influences the market of the pizza industry is new firms that are entering
into the market. They are affected and do affect the organization and its strategy. The strategy
that Domino’s follow to tackle this force is economies of scale, which will help the firm in
lowering the fixed cost of each unit produced. Through innovation in services and products, was
another strategy to handle this force. For example, new flavors, additional products, capture a
new market, use of advanced technology like a mobile application. New entrants are less
comfortable while entering into such a dynamic industry, where already global leaders have
maximum market shares and goodwill. It was significantly reducing the opportunity for
extraordinary revenues or profits for new entrants, which eventually discourage new players over
the industry[ CITATION Dob14 \l 1033 ].
3. Power of customers
Buyers bargaining power, in another force that affects Domino’s strategy and sale. The
customer would like to pay a minimum price for the best quality product. This is something that

STRATEGIC MANAGEMENT IN A GLOBAL CONTEXT 4
creates pressure on Domino’s, as the switching cost for the customer is nil. To tackle this,
Domino’s strategies to build a large customer base, which will help the company in two ways,
first to diminish the threat of customer bargaining power and second is to gain the opportunity to
streamline its production process and sales. Moreover, this threat was reduced by constant
innovative product development, because customers expect a discount on stable products and if
the company is introducing new products without any discount, it was acceptable by the buyers.
New products will be helpful in reducing the existing consumer defection to its
competitors[ CITATION Gau18 \l 1033 ].
4. Power of suppliers
A company is accruing raw material from various sources that are different suppliers. This
can make supplier in a dominant position, which can hamper the profit margin of Domino’s. To
reduce this threat, the strategies used by the company were creating an efficient supply chain,
which includes various suppliers, exploring new designs with different material, even if the
prices increase of some raw material then the organization can go for another alternative
material[ CITATION Zha151 \l 1033 ].
5. Substitute’s products threat
Substitute products are something that can be replaced by one product and fulfill the needs of
the customer. This is one of the major concern while strategizing. The major substitute of
Domino’s is McDonald’s or KFC, which is offering a burger and is able to fulfill the similar
need of consumers as Domino’s. To handle this situation, the strategies made by Domino’s are
becoming service oriented instead of just focusing over product, the company tries to understand
the customer’s core needs instead of concerning on what customer is purchasing. This threat can
be reduced by increasing the switching cost for customers[ CITATION Por141 \l 1033 ].

STRATEGIC MANAGEMENT IN A GLOBAL CONTEXT 5
Q2. Value chain analysis
Value chain activities
(Source: [ CITATION Sma18 \l 1033 ]
Value chain analysis, as shown in figure 1 is a particular set of activities conducted by a
company that initiated from procuring raw material, process converting into final goods, and
finally, reach to end consumers[ CITATION Puc16 \l 1033 ]. Domino’s has its unique value
chain bifurcated into two parts that are primary activities and support activities.
Primary activities:
Inbound logistics- this activity includes purchasing raw material like dough, sauce,
cheese, spaghetti, fruits and vegetable, salt and pepper. These products too, have varieties
like ranges of sauce that are the regular, white, and sweet sauce. It is the strength for
domino’s, as the firm maintains a minimum of four days of stock, they have small cold