Domino’s pizza

Group 7, Section B

Name PGDM No

Anand S 14016

Nikita Lalwani 14089

Rohit Shettar 14124

Rony Francis 14126

Tony Sebastian 14171

Submitted to: Prof. Rajendra Todalbagi

Overview

In 1960, brothers Tom and James Monaghan purchased Dominick’s pizza store in

Ypsilanti, Michigan which was later renamed to Domino’s.

Domino’s first International Franchise was granted in 1983 for a store in

Winnipeg, Manitoba, Cannada.

Domino’s is the world’s second largest pizza company and the largest pizza

delivery quick-serve restaurant chain.

Domino’s uses the franchisee model.

In US, there are 1150 franchisees that collectively own and operate 4475 store.

Domino’s US Franchise Structure

Developed a cost-effective business model with low capital requirement, a

focused menu of affordable pizza and an interior specially designed to

support delivery and carryout

Average investment $150,000 - $250,000. (Relatively low in QSR Segment)

Domino’s franchisee was granted a specified delivery radius.

Delivery radius based on ability to delivery in 10 minutes or less.

The franchisee agreement is for 10 years which can be extend.

Average franchisee owned 3-4 stores.

Stores were small, approximately 1,200 to 1,500 sq. ft.

Domino’s International Franchise Model

A Master franchisee is granted with exclusive rights for a country.

The master franchisee can sub-franchise the brand.

Brand protection through safety audits and enforcement of a supplier approval

process.

Allowed for special toppings and pizza designed to meet local tastes and food

customs.

Master franchisee terms last for 10-20 years.

In 2011, 45% of Domino’s international stores were operated by 4 master

franchisees.

Innovations

Belt Driven Pizza: Which had one temperature

setting and a conveyor belt that moved items

through the oven resulting in consistent and

effortless baking.

Spoodle: Cross between spoon and ladle to help

reduce the time it took to sauce the pizza

Continued…

Pizza Screens: Replaced wooden and stainless

steel pizza cooking trays with pizza screens that

allowed for more even baking.

Corrugated Cardboard pizza box: To make sure

the pizza arrived hot for the customers

Continued…

Heat Wave Electrical deliver bag: To keep pizza

hot during Transit.

The Make Line Station: Assembly line for pizza to

support speedy pizza making

How A Domino’s outlet Works

Order Placement

Assembly Line

Cooking

Packing

Sales-Delivery/collection

Domino’s US Supply Chain System

1. Facilities

Supply chain consist of 19 facilities: 16 were regional dough manufacturing and supplychain centres, an Equipment and supply distribution centre, a Fresh produce facilityand a pressed product plant.

2. Inventory

Raw materials consist of more than 240 individual products. Some of the them (dough)are produced according to forecast. Others are stored in the warehouse and arebeing replenished from time to time.

3. Transportation

Domino’s use 200 leased tractor-trailers to supply the raw materials to the various stores.Usually delivered in the night to minimize disruptions and to ensure on-time delivery.

Cont.

4. Information

The company uses Pulse point-of-sale computer system. it includes aforecasting software that allowed store managers and owners to track

inventory and sales to customers.

5. Sourcing

The purchasing is centralised. It is sourced from authorised dealers and Farmers.

Dough manufacturing is vertically integrated.

6. Pricing

Similar to other Pizza companies. The price is almost same in most of the

companies. Uses various tools to reduce the cost so as to increase profit.

Domino’s International Supply Chain

Flow of supply chain

Stores placed the orders for supplies via Pulse by 5 p.m.

SCCs manufactured at 5 a.m. using internal forecast

Domino’s fleet of 200 leased tractor-trailers were loaded and rolled out of SCCs between 9 p.m. and 10 p.m.

Deliveries were made in middle of the night to minimize disruptions to store operations

Major Problems faced by the company

Uncertainty regarding the raw material prices like that of corn, wheat etc.

Surveys show that taste of Domino’s Pizza was not good.

Diners opted for less expensive frozen offerings instead of pizza due to recession.

Managing the increasing variety of ingredients and packaging.

Threat to its brand reputation due to a video posted in YouTube about the unsanitary

preparation method.

Rise in global commodity prices like wheat, dairy products, chicken etc.

US pizza market was highly competitive.

Recommendations

Seniors Leaders meets every month to discuss the commodity market

outlook and how to manager purchasing and supplier relationships.

Company extended the menu and tried to increase the taste.

Launched many national advertisements to show how they reinvented their

entire business model.

Made use of technology such as Online Pizza Tracker, online ordering,

iPhone application etc.