Strategic Analysis of Domino's Pizza in UK and International Markets

This report provides a comprehensive strategic analysis of Domino's Pizza, focusing on its operations in the UK and international markets. The report begins with an introduction to organizational strategy and its importance, followed by an examination of the key challenges Domino's faces in the external environment, utilizing PEST analysis to assess political, economic, social, technological, legal, and environmental factors. An internal analysis using SWOT and VIRO frameworks evaluates Domino's strengths, weaknesses, opportunities, and threats, as well as its resources. The competitive environment is assessed using Porter's Five Forces model to understand the competitive rivalry, threat of new entrants, bargaining power of buyers and suppliers, and threat of substitute products. The report concludes by exploring strategic options and directions for future growth, including market penetration, market development, product development, and diversification, using the Ansoff matrix to outline potential strategies for expansion and enhanced market presence. This analysis aims to provide insights into Domino's strategic positioning and potential growth pathways within the competitive fast-food industry.

ORGANISATIONAL
STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Key challenges facing the company in the external environment in the UK?.............................1
Analysis of internal business situation and resources of Domino’s in UK.................................2
Analysis of competitive environment of Dominos in UK as well as in International market.....3
Strategic options and directions could the company pursue for the future growth both in the
UK and international Market.......................................................................................................4
CONCLUSION................................................................................................................................6
REREFENCES................................................................................................................................7

INTRODUCTION
Organizational strategy can be defined as sum of actions that are required to be taken by
the company in order to achieve their long- term goals (Vargas-Hernández and Martínez, 2016).
These actions together help in development of organizational strategic plan. It is extremely
important for organizations to focus on development of organizational strategy in order to
achieve their defied goals and gain competitive advantage. This assignment is based upon report
of strategic situation facing the Domino’s Pizza. This assignment will lay emphasis upon key
challenges facing the company, internal business situation and resources, competitive
environments and strategic options and directions.
MAIN BODY
Key challenges facing the company in the external environment in the UK?
PEST Analysis
Political Factors-
Many countries have regulations for strict pricing which affect the revenue of the
company. Other than this there are some other factors such as protection for intellectual property,
taxation, wages, legislation and laws related to restaurants etc. Company needs to keep the
legislation and regulation of all the 85 countries in mind in order to serve there.
Economic Factors-
These factors are concerned with the rate of inflation, rate of employment, rate of wages
and interest which determines the growth rate of the company in the concerned country. Apart
from this profitability of the company also depends on the exchange rate of the concerned
country. This is an necessary aspect to consider for the company so that investors of the
company do not feel discouraged. There is a positive side that if the rate of employment in the
country is low then company will get the labour at low wages which will help them to maintain
the level of profits.
Social Factors-
These factors are concerned with the cultural differences in the environment which may
affect the business of the company. Company needs to design their strategy of marketing
according to the beliefs, values and attitude of people. Other than that company needs to target
their audience according to the product that means that they need to target it to the premium
product (Pan, Chen and Zhan, 2019).
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Technological Factors-
These factors are concerned with the level of innovation in the market. In order to
upgrade their ways they have even changed the method of taking orders as now consumers can
place orders from their phone on the app with the help of internet and even pay through mobile
which is very convenient.
Legal Factors-
These factors varies in every country and many of the countries don’t have enough
resources to provide protection to intellectual property rights to many companies. This puts the
company at risk as there are many chances that the company can loose its data easily and with
that they will also loose their competitive edge in the market. The company needs to make sure
that the host country has laws for data (Song, Sun and Jin, 2017).
Environmental Factors-
These factors are concerned for the benefit of environment and before taking their
business into the country Dominos needs to check the reaction of people on this issue as this will
help them to know at what amount they need to use eco friendly products. Also the company
must be aware of the policies which are regarding management of waste and for the
environment.
Analysis of internal business situation and resources of Domino’s in UK
SWOT Analysis
In order to analyse internal business situation of Dominos in UK SWOT analysis model
will be used as it will help in analysing overall strengths, weaknesses, opportunities and threats
of the company in a much better manner.
Strengths: one of their major strength is Strong brand equity. Their strength is supported by great
tasting food product with excellent service and have good value of money which further helps
them to increase their overall sales and profitability (Rathore and Ilavarasan, 2017).
Weaknesses: They product high calorie product with high fat content. Not only this, they are not
even aware of the nutritional content that their food products, they majorly only focus on taste
and quality of their products. Their sales is continuously decreasing in mature market.
Opportunities: Expansion into new market can be one of the main opportunities for them. By
focusing on health consciousness of people they can introduce more healthy products in order to
increase their overall sales and profit.
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Threats: one of the major threats for dominos business in market of UK is presence of
competitors such as: one of the major threats for them is their competitors. They have many
competitors but Pizza hut, Papa Jones, KFC are their main competitor. Their approximately 40
percent of stores are present near their competitors (Rothaermel, 2016). There are various kinds
of substitute products present within the market because of which sales of their products can
decrease. Eating habits of people are changing continuously as people are getting more health
conscious. This can become a threat for them because of which their overall sales can be
affected. Due to economic factors increasing cost of supplies can also become a threat for them.
VIRO Analysis
VIRO is one of the most effective and valuable tools that can be used for analysis of
internal environment and resources of Dominos. It has four main categories: Value, Rarity,
Imitable, and Organisation.
Value: Dominos have brand vale which is also their main strength. It is second largest Pizza
chain that operates in more than 65 countries. Popularity of the brand has helped them to sustain
within the global competitive market.
Rarity: They have their own value chain system and their own strategies which is rate in this
industry (Bhosale and Deo, 2018). They have team up with AT & T network so that they can
quickly deliver orders to their customers with the help of excellent technology.
Imitable: they have their own system which helps in management of resources and production of
the company. Due to this it becomes difficult to imitate Domino’s system. Supply chain of the
system is designed in such a manner that it utilizes all the resources of the company with their
full potential.
Organisation: Dominos utilizes its resources from raw materials to finished goods. They
majority of the times, relies on integrity and honesty of their employees so that they can achieve
excellent results.
Analysis of competitive environment of Dominos in UK as well as in International market
Dominos is a fast food chain that operates globally in more than 85 countries. They have
various competitors who give their business a tough competition. It can also be said that they
operate in a highly competitive environment. Analysis of competitive environment of Dominos
in UK as well as in international market will be done with the help of porters five force model.
Porter’s five force model
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 Threat of new Entrant: Threat of this factor is high as they are facing strong competition
from a range of players especially the one who have new food options or want to start their
business as new entrant within UK business (Messer and Allen III, 2018). New entrant in
international market is also increasing competition for them.
 Bargaining power of Buyers: Threat of this factor is moderate. There are various kinds of
substitute products available in the market and switching cost for customers is also lower
which is a strong force but as dominos continuously bring innovation within their menu,
newness within their products, this helps them to attract more customers and increase loyalty
within their customers because of which threat of this factor reduces.
 Bargaining power of Suppliers: Threat of this factor is also high as their business relies on a
number of third-party suppliers. Some of them are even sole source of an ingredient. It is
important for them to ensure that their suppliers must make a commercial return to stay in
business and reinvest in their operations. If their supplies decide to cease trading or suffers
from some interruption then their business and food production can get impacted.
 Threat of Substitute products: Threat of this factor is moderate as there are many kind of
competitors who provide similar variety of products in similar cost but with slight variation
in taste because of which it becomes a strong force (Vargas-Hernández and Martínez, 2016).
However, their focus on quality food products, continuous various in products threat of this
product decreases.
 Competitive rivalry: Threat of this factor is also high as there are various global food chain
organizations that operate globally and can give a tough competition to Dominos. Some of
them are Pizza Hut, KFC, Papa Jones, McDonalds and many more. They need to
continuously work on introducing new products or services to their customers in order to
gain competitive advantage.
Strategic options and directions could the company pursue for the future growth both in the UK
and international Market
It has been analyzed from the case study that Dominos Pizza is now laying special emphasis on
the market of United Kingdom and Ireland. In order to grow they can make use of various
initiatives and strategies so that their profitability increases and also they are been able to attract
large range of consumers towards them. This will assist them in attracting more consumers and
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also it will be useful for Dominos Pizza to increase their sales as well as revenue. The company
can make use of Ansoff matrix for the growth.
Market penetration: In this company will be involved in developing new products and services
for the existing market that is UK and Ireland. This will assist them in establishing their market
in new areas and will also help their business in growing. It has also been analyzed that to
develop the products which has been used by them Dominos Pizza has made their own app.
Consumer can be involved in giving feedback through this app. This will assist firm in achieving
their goals and objectives. It also been analyzed that dominos pizza is also working on their
digital capabilities so that they can drive sales and also establish their market in new areas which
is United Kingdom and Ireland.
Market Development: In this the market can be developed by Dominos Pizza by providing high
quality of products and services at lower price to consumers. It has also been analyzed that they
can also provide low cost products and services to the new consumers so that trust can be gain by
them. This will help them in building relationship with consumers that will be useful in growing
and also achieving their goals and objectives. They are also been involved in developing the
market by brand initiative. Consumers intend to purchase the products which have high brand
value. This has assisted firm in growing and achieving their goals and objectives (Saeed, Sattar,
and Ferguson, 2020).
Product Development: In this Dominos pizza will be involved in developing new products and
services in new market according to needs and demands of consumers. They have been involved
in selling the hot and delicious food to United Kingdom and Ireland’s consumers and also the
food is been prepared in within 25 minutes. The company is making sure that high quality of
pizza and other food product is been supplied to consumers. They are supplying the food
products according to taste and preference of consumers (Rathore and Ilavarasan, 2017).
Diversification: Dominos Pizza in order to grow is been involved in diversifying the market so
that competitive advantage is been gained by them. In this they are also been thinking or
bringing more new and innovative services. They are making use of different channels of
marketing in order to attract more consumers towards them. This has assisted firm in growing.
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CONCLUSION
From the above studies it has been concluded that Dominos has established their market
in many countries and has a very large customer base. The industry they are serving in is very
competitive and in order to survive in the market they need to bring constant upgrade to their
methods and new recipes so that they serve at the same position without their profits getting
affected.
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REREFENCES
Books and Journals
Bhosale, P. and Deo, S., 2018. An examination of the inventory management system at
Dominos.
Messer, K.D. and Allen III, W.L., 2018. The science of strategic conservation: protecting more
with less. Cambridge University Press.
Pan, W., Chen, L. and Zhan, W., 2019. PESTEL analysis of construction productivity
enhancement strategies: A case study of three economies. Journal of Management in
Engineering, 35(1), p.05018013.
Rathore, A.K. and Ilavarasan, P.V., 2017, February. Social media analytics for new product
development: Case of a pizza. In 2017 International Conference on Advances in
Mechanical, Industrial, Automation and Management Systems (AMIAMS) (pp. 213-
219). IEEE.
Rothaermel, F.T., 2016. Strategic management: concepts (Vol. 2). McGraw-Hill Education.
Saeed, A., Sattar, S. and Ferguson, A., 2020. Automatic pizza cutting machine.
Song, J., Sun, Y. and Jin, L., 2017. PESTEL analysis of the development of the waste-to-energy
incineration industry in China. Renewable and Sustainable Energy Reviews, 80, pp.276-
289.
Vargas-Hernández, J.G. and Martínez, M.Á.P., 2016. Mergers and Acquisitions Strategies for
Market Penetration in New Countries: The Case of Alsea Group. Regional Science
Inquiry. 8(2). pp.55-64.
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