BM6024 Domino's Pizza: Strategic Analysis and Recommendations

This report provides a comprehensive strategic analysis of Domino's Pizza, addressing key challenges in the UK market, evaluating the company's internal resources through a SWOT analysis, and examining the competitive landscape both domestically and internationally. It utilizes Porter's Five Forces and Bowman's Strategy Clock models to assess the competitive environment and identify strategic options for future growth. The report explores various strategies, including low-price, hybrid, differentiation, and focused differentiation, offering recommendations for Domino's to enhance its market share and profitability. The analysis considers external factors such as government policies, economic conditions, changing consumer preferences, technological advancements, environmental concerns, and legal regulations. It also considers the company's internal strengths and weaknesses related to brand image, product offerings, franchisee management, and operational challenges. The report concludes with strategic recommendations for Domino's Pizza's expansion and sustained success in both the UK and international markets.

Dominos Case study
1

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
1 Key challenges that are faced by company in UK....................................................................3
2 Internal business situation and resources of company in UK...................................................4
3 Competitive environments of Dominos in UK and international market.................................6
4 Strategies option and direction for future growth both in UK and international market..........7
CONCLUSION................................................................................................................................8
REFERENCE..................................................................................................................................8
2

INTRODUCTION
Every company formulate various strategies and plan in order to cover large market share
and earn maximum amount of profitability by satisfying needs, demand of customers.
Organisation strategies helps in facing various challenges of external environment and take
advantages in industry through effective utilisation of available opportunities for growth and
success of firm. This report is about Dominos that operates its business across worldwide to earn
maximum amount of profitability and fulfil needs of customers. The report covers about key
challenges of external environment that are faced by company in UK. Swot Model is used to
analysis internal situation and resources of firm that helps firm in gaining competitive
advantages. It also discuss about competitive position of firm in UK and international market and
strategies option that help company to grow and expand its market share in future.
1 Key challenges that are faced by company in UK
Dominos pizza is one of leading company that operate its function across worldwide to
render qualitative products and services in order to earn maximum amount of profitability.
There are various key challenges that are faced by company in external environment of UK are
as follows:
1. One of the key challenges that are faced by Dominos is ever changing policies of UK
government. Brexit regulation introduce by government has resulted in decreases in sales
volume and market share of firm as most of the people does not have sufficient amount of
money to have qualitative and delicious food of Dominos (Mukherjee and Shaw, 2016).
Therefore company has to formulate effective strategies in order to retain its market share
and customers demand in UK.
2. Due to various policies of government such as Brexit economic of UK is suffering from
situation of recession that means high unemployment rates, interest rates and less
disposable income of customers. So, it had impact on overall investment, profitability and
cost of manufacturing of dominos thus cost of products have increased and people of UK
are less willing to spend on high cost products to satisfy their needs (Joesron and
Nikolaidis, 2019). Therefore poor economic condition, inflation has decreases overall
profitability and sales volume of firm.
3. Now a day’s customers are becoming more and more aware about healthy and organic
food due to development in technologies, continuous spread of various diseases.
3

Dominos make unhealthy foods thus demand of customers have changed in UK, they
want more qualitative and hygiene, organic food for their better health and lifestyles.
Thus, dominos have to introduce healthy and organic food range to meet demand of each
customer and gain competitive advantages in the market.
4. There are various changes in technology and process that are used to deliver products to
customers such as most of organisations have expanded their market share in online.
Therefore Dominos also have to change its operation as per recent trends in technology
which increase cost of company as it have to install new technologies, trained employees
to work in particular manner so that desired result can be get (Biasin and et.al., 2019). So,
continuous development and changes in technology is another key challenge that need to
be overcome by Dominos.
5. Due to increasing pollution and customer awareness regarding harmful impact of
company on environment has forced Dominos to take various steps for satisfaction of
customers’ needs. Company have taken various steps to ensure effective utilisation of
resource with minimum amount of wastages. Therefore it had increase cost to company
as it has to invest capital to protect environment form various threats for health and safety
of people.
6. It is last external factors that impact on company operation such as legal laws that are
made by government of UK such as employment law, discriminative law and health and
safety law (Direction, 2019). Thus, to incorporate all such legal laws company cost of
operation has increased and more time is spends to perform specific task. Therefore,
Dominos follow various laws made by UK government for smooth operation of business
within industry.
2 Internal business situation and resources of company in UK
Availability of physical and human resource, organisational structure and culture are some
of the internal factors that impact on operation of organisation. Dominos had effectively utilised
its internal resources and capabilities to gain competitive advantages in the market and earn
maximum amount of profitability (Groves, 2018). Therefore various internal resources and
capabilities that help Dominos to meet customers demand can be analysed through use of SWOT
Analysis Model. Such as:
4

Strength: There are various strength of Dominos that help it to gain competitive advantages and
fulfil requirement of each customers in order to earn maximum profitability. Therefore various
strength of Dominos are as follows:
Brand image: Dominos is one of the leading companies in the world having strong brand image
to provide qualitative products and services to customers (Bentoand and Simeth, 2018). Dominos
is well known for providing qualitative products and timely delivery of services to its customers
therefore it is recognised as one of the most recognized consumer brand of world.
Products and services: Dominos offer standardise and qualitative products at various franchisee
stores in order to retain large number of customers within company. It continuously introduce
new products varieties so that unsatisfied needs of customers can be meet at the same time
delivery of products within limited time helps in growth and expansion of business.
Weakness: There are some of the weakness of dominos that hinder in growth and expansion of
enterprise in the industry such as:
Franchisee related issue: There are various issues that are faced by domino while managing its
franchisees that have resulted in closure down of some of the stores. Dominos is unable to
manage various franchisee stores operating in different countries which have also impacted on
brand image of organisation.
Operation difficult: Despite of innovation in franchises Model firm is not able to manage its
business operation thus it find difficult to manage quality of products and resolve various issue
faced by stores.
Opportunity: Domino manager continuously analysis and monitor external environment in
order to effectively utilise available opportunities in order to gain competitive advantages.
Therefore identification of opportunity within time limited has contributed in growth of
enterprise in the market. Various opportunities for Domino in UK market are as follows:
Redesign of menu: Company by resigning its food menu can cater needs of people that are
highly concerned about their health and wellness (Parnell and Brady, 2019). Dominos has
opportunity to expand its market share by introducing healthy, organic and less calories food in
food menu so that customer can be provide better and qualitative experience.
5

Market Expansion: There are various location of UK in which company have not expand its
market operation so firm has opportunity to grow and expand its market in order to earn more
profit margin. Use of online sites, social media platform is another opportunity for firm to
expand its business operation across UK.
Threats: Company is facing some of the threat in industry that needs to be removed for long
term growth and success of organisation.
Increasing Competition: It can be stated that increasing competition and entrance of new
competitors in the industry of UK is threat on long term growth and survival of dominos so it had
to innovative its products to get competitive advantages.
3 Competitive environments of Dominos in UK and international market
Dominos operate its function in competitive market that has large number of companies with
wide varieties of products and services to satisfy needs of customers. Company has to faced lot
of competition in UK as well as in international market due to presence of competitors such as
Pizza Hut, US pizza. Therefore porter model can be used to identify competitive positioning of
dominos in UK and international market.
Existing rivalry: There are large number of competitors in UK and international market such as
Pizza Hut, Us pizza or companies that delivery quick services to customers. Number of
competitors of Dominos are increasing day by day with new and innovative ideas (Coffie, 2018).
Therefore level of competition is high but it is able to gain competitive advantages through
continuously changing its products and technologies as per demand of customers.
Power of consumers: Taste and preference of customers are ever changing and there are large
number of customer with different culture, tradition and preference so it is difficult to satisfy
each needs. At the same time there are number of companies with wide varieties of products so
customers in UK and international market have more power to impact on operation of firm.
Power of suppliers: Dominos have its operation worldwide with strong brand image so it can
easily attract numerous suppliers to provide qualitative products at reasonable rates. Therefore it
can be stated that power of supplier is low that helps Dominos to get qualitative products and
services at reasonable rates to satisfy needs of customers.
6

Threats of new entrance: Food industry is one of the fast growing industries so many
individual are planning to invest their money in order to earn large amount of profitability (Foss,
Foss and Klein, 2018). But Dominos in order to retain its market positioning in international and
UK market has use standardise method, patent, copyright its technologies and products so that
new competitors find difficult to expand its operation.
Threat of substitute products: It can be stated that threat of substitute products is medium as
most of small companies tries to imitate products and services of firm. Therefore Dominos
through patent, copyright and differentiating its products in terms of quality able to gain
competitive market position in international and UK market.
4 Strategies option and direction for future growth both in UK and international market
There are various strategies option that can be used by Dominos in order to grow and
expand its market share in both UK and international market. Company have different strategies
option that can be adopted by Dominos to capture huge market area and earn maximum amount
of profitability (Alsolamy, 2019). Strategies option and direction of dominos can be understood
through use of Bowman’s strategy clock model such as:
Low price and low added value: It is strategy where firm offer low qualitative products at low
price so this strategy is not adopted by Dominos as it have strong brand image to provide
qualitative and valuable products.
Low price: It can be used by Dominos to cover large market area in future as in it firm plans to
bring economic of scale in order to provide valued products and services at reasonable rates.
Such strategy helps company to gain competitive advantages in UK as well as in international
market.
Hybrid: Dominos by continuous innovating its products and services such as introducing
organic and less calories food products or differentiating from other competitors at lower price
can helps in retaining competitive positioning in international and UK market (Groves, 2018).
Differentiate: It is the recent strategy that is used by Dominos to promote it products and service
to large number of customers. Company manufacture highly differentiates standard and
qualitative products to retain customer satisfaction and loyalty for long term growth of firm.
7

Focused differentiation: Another strategy that can be adopted by Dominos is focused
differentiation which state that company manufacture qualitative products for target group of
customers (Parnell and Brady, 2019). Therefore, dominos can manufacture organic and delicious
food for kids and adults to increase its sales volume and market share in international and UK
market.
Risky high margin: Such strategy should not be used by company as high price is charged for
low valued products thus it will reduce market share and brand image of firm.
Monopoly: Dominos cannot charge monopoly price as there are large number of competitors
with wide varieties of products to satisfy needs of customers.
Loss of market share: Dominos ensure that it offer qualitative, standardise products to
customers at reasonable cost or as per value of products in order to retain its market share in UK
and international market for future growth.
CONCLUSION
From the above report it can be concluded that there are different key challenges of external
environment that are faced by Dominos while operating its function in UK and international
market. Strong brand image and customer loyalty contributed in growth and sustainability of
firm within industry. At the company can use various strategies and direction to get competitive
advantages in future for long term growth of enterprise.
8

REFERENCE
Book and journals
Alsolamy, M. Q., 2019. Exploring the Relationship between Entrepreneurial Orientation,
Innovative Capability and Social enterprises Competitive Positioning: Evidence on
Social Enterprises in Saudi Arabia. Global Journal of Economics and Business–
Vol, 7(3). p.336.
Bento, C. L. and Simeth, M., 2018. Can You Know Too Much to Learn: The Relationship
Between Internal Research Capabilities and External Knowledge for Innovation.
Biasin, M adn et.al., 2019. Macro Asset Allocation with Social Impact
Investments. Sustainability, 11(11). p.3140.
Coffie, S., 2018. Positioning strategies for branding services in an emerging economy. Journal of
Strategic Marketing, pp.1-15.
Direction, S., 2019. Competitive advantage through networking: Understanding how internal
capabilities promote change using relationship building.
Foss, K., Foss, N. J. and Klein, P.G., 2018. Uncovering the hidden transaction costs of market
power: A property rights approach to strategic positioning. Managerial and Decision
Economics, 39(3). pp.306-319.
Groves, K. S., 2018, July. Succession management capabilities: planning for the inevitable
transition of executive talent. In Academy of Management Proceedings (Vol. 2018, No.
1, p. 15773). Briarcliff Manor, NY 10510: Academy of Management.
Joesron, T. S. and Nikolaidis, A., 2019. Macro-and Microeconomics and Social Marketing.
In Integrated Community-Managed Development (pp. 139-151). Springer, Cham.
Mukherjee, S. and Shaw, R., 2016. Big data–concepts, applications, challenges and future
scope. International Journal of Advanced Research in Computer and Communication
Engineering, 5(2). pp.66-74.
Parnell, J. and Brady, M., 2019. Capabilities, strategies and firm performance in the United
Kingdom. Journal of Strategy and Management.
9