Comprehensive Strategic Analysis of Domino's Pizza: A Business Report

This report provides a comprehensive strategic analysis of Domino's Pizza, examining its external and internal environments. The analysis begins with a PESTEL analysis, evaluating the political, economic, social, technological, environmental, and legal factors impacting Domino's global operations. Following this, a Porter's Five Forces analysis assesses the competitive dynamics within the pizza industry, including the threat of new entrants, the threat of substitutes, the bargaining power of suppliers and buyers, and the intensity of industry rivalry. Finally, a value chain analysis evaluates Domino's internal activities, including infrastructure, human resource management, technology development, and procurement. The report highlights key strategic challenges and opportunities for Domino's, such as adapting to changing consumer preferences, managing competition, and leveraging technology. The report concludes by offering insights into how Domino's can maintain its competitive advantage and achieve sustainable growth in the fast-food industry.

Running head: CONTEMPORARY STRATEGIC MANAGEMENT
Contemporary Strategic Management
Name of the student
Name of the university
Author note

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Pestel analysis:
Political environment As discussed in the case study, Domino’s pizza
is having their branches in more than 65
countries around the world. Thus, one of the
key political challenges that they will face is
the diversified political scenario in different
countries. This is due to the fact that, different
countries are having different approaches
towards the business operation of Domino’s
pizza. Moreover, with the change in the
political scenario in any particular countries,
they have to adhere with the change in the
regulations also.
Economic environment Economic scenario for Domino’s pizza is
comparatively favorable due to their gradual
increase in sales. It is being stated in the case
study that, non-organic food market is
increasing at the rate of 2 percent in the
American market. Though, the rate is quite
lower compared to the organic food, but still
the market is increasing. However, in the
global market, changing customer preferences
towards the organic and healthier options is

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putting economical pressure on them.
Moreover, with having huge number of
competitors in the market, the market
opportunity for Domino’s pizza in the global
scenario is showing depreciating trend.
Social environment As discussed earlier, rate of increase in the
market share of organic foods is more
compared to the conventional foods. This is
due to the fact that, consumers now a days are
more health conscious and are more aware
about the ill benefits of the fast foods. In the
case, it is being given that obesity level among
the people is increasing at alarming rate and
thus it is having negative implications for fast
foods chains such as Domino’s pizza. Thus, it
one of the key strategic challenges for them to
attract new customers in this social scenario.
With the increase in the health awareness
among the potential consumers around the
world, it will be beneficial for Dominos to
introduce healthier products in the market.
Technological environment In the current business scenario, technology
plays an important role in enhancing the

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competitive advantages of the organization.
Moreover, the sector of fast food, where
Dominos is currently operating is more
depended on technology. Accordingly, they
have also introduced newer technologies in
reducing the time of product delivery to the
customers. In addition, they have also
introduced the facility of online ordering
system and applications for iphone users to
enable them to order from anywhere. However,
with the rapid change in the technology in the
current market scenario, it is important for
them to initiate more technologies in order to
enhance the customer convenience and to stay
ahead in the competition.
Environmental factor Environment is one of the key areas, which is
being given much concentration in the recent
time. Accordingly, contemporary business
organizations are also initiating various
measures in order to curb the impact of their
operation on the environment. One of the
potential measures for Domino’s pizza will be
the use of recycled materials for packaging.

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This will help them to reduce the wastage
being generated from the packaging. In
addition, it will help them to enhance their
reputation and goodwill in the market.
Legal environment With the increase in the customer awareness
regarding the ill impacts of the fast food,
various legislations are also being introduced
by the regulatory bodies in order to curb the
consumption. Thus, Domino’s pizza will have
to adhere with the newly introduced
legislations in different countries. Moreover,
the legislations are different and diversified in
different countries, which will pose challenge
for them. it is important for them to initiate the
introduction of healthier products in the
market, which will adhere to the latest food
legislations.

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Porter five force:
Threat of entry The threat of entry for Domino’s pizza is low due to the high
saturation level in this industry. This is due to the fact that already
there are hug competition in this sector with the presence of
various global brands around the world. Thus, there is less chance
and potentiality for the new entrants in the market, which is
restricting them in entering in this sector. Moreover, investment is
huge in entering in this sector due to the reason that, majority of
the existing organizations in this sector is operating on global
scenario. Thus, it is one of the key barriers for the new entrants to
enter in this industry. Another barrier for the new entrant is the
similar type of product offerings in the market. Domino’s pizza
along with their competitors is offering similar products in the
market. Thus, it will be difficult for them to gain market share by
offering similar products without having any brand value. Thus,
Domino’s pizza is having less threat of new entrants in the market.
However, there will always be the chance of entering of new
organizations that can compete with the existing ones.
Threat of substitutes As discussed earlier, the sector where Domino’s pizza is operating
is highly competitive in nature with the presence of various
competitors in the market. According to the data being given in the
case, in the pizza market of United States of America, there are
various competitors of Domino’s pizza such as Pizza Hut, Papa

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John’s and some other distant competitors such as KFC and Taco
Bell are having more or less similar markets share with having
neck to neck competition. Thus, the rate of competition for
Domino’s pizza is high in the global market also. In accordance to
that, threat of substitute for them is also very high due to the
similar offerings being offered by all the competitors in the
market. In addition, with the increase in the competition in the
market, the switching cost for the customers is also increasing.
Thus, the threat of substitute for Domino’s pizza is high. Due to
the increase in competition in the market, the prices of the
products are more market determined in order to attract more
customers. Thus, Domino’s pizza is having the barrier to charge
price according to them.
Bargaining power of
suppliers
The bargaining power of the suppliers for Domino’s pizza is low
due to the presence of more number of suppliers in the market.
According to the information being given in the case, the key
ingredient for Domino’s pizza is the dough being used in the pizza.
Moreover, it is also being stated in the case that, Dominos is
having own manufacturing and supply chain to produce the dough.
Thus, they are less depended on the external suppliers for sourcing
of the raw materials. In addition, for the sourcing of the external
raw materials, there are various suppliers being available in the
market. Thus, it is helpful for Domino’s pizza to have more

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options in selecting the suppliers along with having low switching
cost. This is due to the reason that, choosing a supplier over
another will involve less or no cost for them. Moreover, the
majority of the suppliers generate their revenue from supplying to
the large restaurants such as Domino’s pizza. Hence, they are also
depended on these restaurants and will not have upper hand in the
process.
Bargaining power of
buyers
As discussed in the earlier section, Domino’s pizza is having huge
number of competition in the market. Thus, this provides more
options for the end customers to choose their restaurants. As
discussed in the given case, there are numerous competitors being
present in the market with having similar rate of market share.
This denotes that, loyal customers are less in this sector rather they
are open to all the competitors being available in the market.
Moreover, the switching cost is also less for the customers due to
the fact they are having more options in their doorstep. Thus, the
buyers are having the upper hand in choosing their restaurants and
the force of bargaining power of buyers for Domino’s pizza is
high. Due to this fact, Dominos have to follow the market
determined price for their product portfolio in order to attract more
customers and to compete in the market.
Industry rivalry With the presence of huge number of competitors in the market,
the rivalry in the industry is more. Moreover, in the case study it is

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being discussed that, the growth in the conventional food market is
less compared to the market growth of the organic foods.
However, as discussed earlier, the pizza industry is already being
saturated with the presence of huge number of competitors. Thus,
the current scenario is showing that the growth of the competitors
in this sector is more compared to the growth of the new
customers. Moreover, due to the presence of global competitors in
this sector, majority of regions are being covered with having the
high level of market penetration of the organizations. Thus, there
is less chance of increase in the new customer base for this
industry. Due to this factor, rivalry in this sector is increasing with
the initiation of different promotional activities by the competitors
in order to retain the existing customers. Thus, this force is high
for Domino’s pizza. However, as discussed in the given case,
Dominos is also initiating various technologies and other
promotional and loyalty schemes for the existing customers in
order to enhance the level of satisfaction level of the customers.
Moreover, the leadership roles in this organization are being
managed effectively, which promotes the emergence of
innovation. Thus, it helps them to enhance the productivity and
effectiveness of the employees along with gaining competitive
advantages in the market. Moreover, as discussed in the given
case, Dominos is having competency in delivering pizza to their

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customers in less time than their competitors. Thus, this type of
competitive advantage will help them to stay ahead in the
competition along with effectively retaining the existing
customers.
Value chain analysis:
Support activities
Infrastructure As discussed in the given case, Dominos is having second highest
number of stores in the United States after Pizza hut. They are
having 4474 franchise stores and 454 company owned stores in
United States along with 4422 franchise stores around the world.
Thus, they are having huge number of stores around the world,
which helps them to cover the target market effectively along
with enhancing the market presence.
Human resource
management
As discussed in the case study, Dominos is having an
participative style of leadership in their organization, which helps
them to motivate the employees to generate innovative and out of
the box ideas. Moreover, it is also been discussed that, employee
feedback mechanism is being effectively initiated in the
organization in order to gather opinions and suggestion from
them. According to their leadership approach, various employee
engagement programs are being initiated such as “lunch with
Dave”. This helps them to create favorable environment in the

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organization along with creating mutual understanding between
the employees and the upper level management. Moreover, it is
also been stated in the case that, their strategic approach of their
leadership style is to adapt the leadership approach according to
the individual characteristics. This helps them to meet the
requirement of all the employees and to generate competitive
advantages by effectively managing them. Employees are being
given training in order to equip them to deal with the negative
situation.
Technology development In terms of technology development, food and beverage sectors
are going through rapid changes. One of the key changes is the
social media marketing. Major brands are involving social media
marketing in order to enhance their brand visibility along with
determining the change in the taste and preference pattern of the
customers. Dominos is also having initiated effective plan of
social media marketing, which involves more than 1.2 million
Facebook fans and more than 20000 followers on Twitter. Thus,
with this number of followers in the social media, Dominos will
have the opportunity to market their newly introduce their newly
introduced products and gathering feedback from the customers.
Procurement Dominos is having effective and efficient supply chain
management in order to procure raw materials. In the case study,
it is stated that, Dominos is having their own manufacturing

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facility for their dough. This is due to the reason that, the dough
of the pizza is the most important ingredient for Dominos. Thus,
in order to enhance the quality of the pizza, Dominos is having
their own manufacturing facility to maintain the quality of the
dough. Moreover, due to the fact of having own manufacturing
facilities, Dominos is being able to reduce the cost of supply
chain management by preventing the cost of intermediaries.
Primary activities
Inbound logistics Inbound logistics of Dominos include sourcing the raw materials
that have to be bought from the third party vendors. This includes
the dough, which are being sourced from their manufacturing
facilities. In addition, vegetable items such as mushroom, onion,
tomatoes, olives and other items along with the non vegetarian
items such as chicken, pork and meat balls are being sourced from
the third party vendors.
Operations In the given case, it is being stated that, the pizza being offered by
Dominos are being made according to the taste and preference
pattern of the target customers. This is due to the reason that,
Dominos is having their business presence in different locations
across the world. Accordingly, they have changed the taste of
their pizza to attract the customers. In addition, customization is
also been available for the customers, which enable them to have
the pizza according to the preferences. Thus, the strategic