Name :Anam Shoaib

Reg # L1F11MBAE2058

Section (H)

Assignment # 1

Serial #

Date of Submission: November 7, 2013

Summary Rethinking Domino's Expansion Plan

This case study is about pavan bhatia’s expansion plan for domino’s in india (1999). He planned to make domino’s largest food chain in india but faced many problems. The board members felt that pavan bhatia’s was not performed well during his 18-months tenure was not upto the mark and he had initiated an expansion strategy that was reckless and not properly thought out. However many other felt that board is not considering the possible long term benefit of pavan bhatia’s strategy pavan bhatia opened domino's outlets in small towns and cities. Where pizza consumption was very low. Because prices are unacceptable due to low footfalls and lower volumes, hari bhartia planned to shut down domino's outlets not only in some small cities but also a delivery outlet in the wealthy gujranwala town in north delhi. One of the two outlets in ludihiana was also planned to be shut down. This case gives an overview of domino's over-ambitious expansion plan. It discusses in detail, how domino's, under pavan bhatia, expanded quickly to make domino's the biggest fast food chain in india. The case focuses on what was the negative impacts of this expansion plan. It reflects light on various factors like the new strategy of hari bhartia, after the exit of pavan bhatia the failure of governance in domino's and how hari bhartia, allowed the ceo to pursue the expansion plan despite warnings from within and analysing these factors that there are huge gap between projection and actual sales stress on company owned outlets for expansion huge infrastructure cost transportation cost location of outlets operation cost pricing nationwide advertising campaign

Swot analysis

Strenght

They have huge investment They have good brand name

Weakness

Management is not strong Lack of critical thinking Less profits

Opportunity

They have accessibility in many areas Efficiency and Effectiveness

Threat

They are facing losses Huge competition

Problem statement

They have these problems 1. expansion strategy to ambitious, 2. huge gap between projection and actual sales, 3. stress on company owned outlets for expansion, 4. huge infrastructure cost 5. transportation cost 6. location of outlets 7. operation cost 8. pricing nationwide advertising campaign

Developing alternatives

Movement from company owned outlets to franchisee owned outlets extensive research before

launch in new areas spread out the expansion plan over a few years advertising in areas where

services are present sound top level management

Evalution of alternatives

Advantages Disadvantages

1. Movement from company owned outlets to franchisee owned outlets.

More capital More managers Help in decision

making

Loss of ownership

2. Extensive research before launch in new

areas

Able to know customer needs and react accordingly increase profits

Huge time and finance is required

3. Spread out the expansion plan over a

few years

Helps them to know the need and react accordingly

4. Advertising in areas where services are

present

Increase profitibility Increase cost

5. Sound top level management

Help in decision making

Selection of best alternatives

According to me best alternatives are spread out the expansion plan over a few years and sound top level management

Implementation

They should divide their plan into segments and then start targeting these segments according to customer needs the top level management should make strategies that helps in increasing profits

Conclusion

This case study provides a lesson that while developing a strategy management should research more and must know the pros and cons of what they are doing they must know how to deal with different situations

Recommedations

The management should spread the plan to several years They should know the demand and affordability of their customers They should not launch their outlets in the areas in which demad is less and cost is more They should shrink their plan and invest only in the areas where demand is more and cost

is less

References

www.slideshare.net/kinnar32/dominos-case-10204097

http://www.thecasecentre.org/educators/products/view?id=21422

Rethinking Domino’s Expansion plan:

Summary:

Domino’s enter in India in 1996. Domino’s pizza India Ltd. was the Indian franchisee of domino’s pizza Inc. pavan Bhatia’s expansion plan for domino in India was in1999.Pavan Bhatia took over as the CEO of Domino's He plan to make domino’s largest food chain in India. He used strategy to open outletsat corporate offices and in small towns and in cities. Pizza consumption in these places was very low. But the cost per meal was too high. Analysts felt that even those willing toopt for the product found the price unacceptable. Due to low number of consumer visiting an outlet Hari Bhatia planned to shut down domino’s outlet in small town and also in wealthy towns. This case shows the poor governance and wrong decisions of management and how these decisions effect and create problems like large gap projection and actual sales stress on company owned outlets for expansion more transportation cost , outlets are at the place where demand is less and more operating cost nationwide advertising campaign is very expensive.