Domino's Pizza Incorporation

The second-largest pizza chain in America is Domino's Pizza Incorporation. The corporation currently operates more than 9,000 corporate and franchise locations across more than 60 international markets, including all 50 states in the United States. The organization has become stronger since its inception. Domino's Pizza Inc. applied for a license in 1967 and opened its first location in Ypsilanti (Shaw, 2010 p 27). Despite the initial suggestion to change the company's logo by adding a dot to each new store, the notion was quickly forgotten as a result of the company's rapid expansion. Nonetheless, it is significant to acknowledge now that the organization had faced a major problem in its initial stages, which threatened to affect the company's development and its existence. Amstar Corporation filed a suit in 1975, which was Domino Sugar's marker at that time. In their complaint, the company argued that Domino's Inc. had infringed and violated its trademark and consequently started unfair competition towards their organization (Backhaus and Sabel, 2007). The five years legal battle ended in 1980 in favor of Domino's Incorporation. The aim of this paper is to discuss the biggest problem facing Domino's and to highlight one minor problem as well. Recommendations will be made in regards to solving these problems, and finally, the paper will provide the best solution to the major issue discussed.
The Main Issue for Domino's and its Origin
The biggest problem for Domino's is that the company has experienced a recurrent decrease in the sales at their stores. During the recent years, there has been a decline in revenues, and this drop can negatively influence the organization's profits and brand image. A section of these losses resulted from the decreasing number of most franchises which were initiated in 2008.Reports revealed that business at the stores had dropped to almost 40% in two years (Sheehan, 2014). Additionally, a rise in minimum wage contributed to the small profit. Jubilant FoodWorks, a franchise of Domino's Pizza Inc. in India recently closed down eight stores. The organization also suddenly cut the guidance of opening stores in almost 50 stores compared to nearly 130 stores in approximately three years. This call was adopted in consideration of the losses experienced while operating some stores. Besides, operational costs experienced a sharp increase. Closing down of stores was anticipated to assist Domino's to combine losses and improve total profitability. The management at Jubilant FoodWorks reported that the company had strengthened their cost optimization drive within all functions of the business (Thareja and Sharma, 2011).Additionally; the company's strategy was being sharpened to grow back the business. Shareholders do not welcome a high decrease in profits. Domino's competitors include Macdonald, Pizza hut, and many other fast food chains. The market for fast food in India is believed to improve come 2020 because of the change in demography and consumer behavior.
Recently, it was reported that the company's net profit was below guidance and the reason given was its rollout within franchises in France. There was also an expected slowdown in the growth of sales. The management revealed that business in France experienced troubles for six months in regards to online orders and the range of value that failed to match with the French. The company had tried to solve input problems with abbreviations in French to slang so that customers would visit their site to learn that services were not available to them. In spite of the problems in France, reports from Europe indicated that the company would record the highest growth in the market for the following 18 months. However, Domino's projected a decrease in sales in six months and a reduced profit as well. The report came as the company planned to lift wages for workers as it proceeds to negotiate a fresh agreement with the Coalition of retail employees (Thareja and Sharma, 2011).
In New Zealand and Australia, Domino's biggest drop in sales was attributed to a decrease in orders made by telephone and inadequate advertising of changes in phone contacts. Economic analysts felt that forecasts by Domino's were the cause for the plunge in share prices. According to them, increasing labor costs and easing sales growth could contribute to lower profitability in businesses. Consequently, the attractiveness of the business model would reduce (Sheehan, 2014).
A Minor issue facing Domino's and its Origin
In 2009, before Domino's presence in the social media, the company found itself plunged in a viral attack during which a video of two workers at a franchise in Conover N.C was uploaded on YouTube. The video showed the two employees mishandling a sandwich before sending it on delivery. Apparently, the video immediately went viral and, the company was immediately send into a whole crisis in the media, something that was never expected. The mistakes were made. However, Domino's launched a strategy of communication, which prevented the ruin of the brand. The outcome of this crisis seemed like a miracle, especially because during then, the business was yet to launch their social media strategy or platform (Hemphill, 2013 p 496).
Solutions to Domino's Issues
Domino's should strategize to seize the emerging opportunities in the looming economies (Thareja and Sharma, 2011). Domino's stores in India and China account for less than 2% of their entire stores. The stores should be increased in number to reach over 20% in three years for the company to reach its expansion strategy (Sheehan, 2014).
Secondly, the company should concentrate entirely on the loyalty of customers by demanding quality and making sure that every store makes the best deliveries. Cembalo (2015 p 335) asserts that these regulations on quality should be followed strictly for any excellent outcomes to be obtained. The two suggestions are determined by the fact that there is a steady growth of competition in the industry of fast foods.
Thirdly, the company should think about using their brilliant advertising skills to concentrate on all competitors or players within the market rather than only considering one competitor like Subways. Focusing on a single opponent can result in serious repercussions to the organization mainly where recognized businesses such as Macdonald may invent enterprising strategies that can influence the company's general growth and stability (Hemphill, 2013 p 499).
Fourth, the company should upgrade their creative action plans that they have embraced their internet marketing and selling. Domino's competitors like Pizza Hut achieved better based on online rewards in spite of investing similar amounts of money in the segment of online services. The present working company hybrid is expected to be franchised at 70% while the stores under ownership amount to 30%.The percentage should be regulated to decrease working costs by raising the number of licensed businesses to almost 85% so that the total operational costs can reduce (Řežáb, 2012).
The best solution to addressing the recurrent decrease in sales is to improve the company's brand image. Domino's should concentrate on upgrading its brand image, which is part of its strengths. Re-branding can be successful through constant reinforcing and strengthen their brand within the market. One key element that requires being cautiously considered by the organization is the very dynamic socio-cultural transformation or the evolving lifestyles of the US people as well as across the world. Their products should demonstrate these transformations if the company is to continue successfully. Companies such as MacDonald Incorporation focus on the happening changes in culture after which they train their workers to satisfy the demands of new lifestyles (Tallman, et al 2017).
In connection with the above recommendation, Domino's Incorporation should concentrate on making online sales and take advantage of this impact to re-establish the company's in-store dining programs to run parallel with online sales. Internet usage in today's world is increasing rapidly, and the rise in the company's online sales that have been observed can only be improved by carefully watching the in-store dining programs (Cembalo, 2015).
Lastly, Domino's should examine existing options in their consumer churn or mix. The business should decrease the size in order maintain its competitiveness and recognize its objectives and strategies as well. Success needs a particular path, which is distinctly founded on the high points and focus on the company's opportunities (Řežáb, 2012). These recommendations provided reflect on the existing opportunities and strengths, and they are meant to overcome the issues faced by the enterprise.
Conclusion
Evidently, Domino's Pizza Incorporation, which is among the largest pizza chains in America, has been in existence for long. The company boasts of a strong brand image as one of its biggest strengths. Additionally, Domino's history is good in spite of critism on their products and a few lawsuits. The company's strategies of advertisement have grown to be quite efficient and have performed to improve the competitiveness of the enterprise. Nonetheless, the company is faced a recurrent decrease in sales, a position that might place the company's future to dire rest. The transformation in the sociocultural environment that is persistent in today's world need the business to conduct swift changes and constant observation of people's lifestyles in various regions of the globe, especially when they operate. The competition level in the industry of fast food is becoming stronger every day and preserving loyal customers is the best strategy for the success of any business.




















References
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Cembalo, L., Lombardi, A., Pascucci, S., Dentoni, D., Migliore, G., Verneau, F. and Schifani, G. (2015). "Rationally Local": Consumer Participation in Alternative Food Chains. Agribusiness, 31(3), pp.330-352.
Hemphill, T. (2013). The Global Food Industry and "Creative Capitalism": The Partners in Food Solutions Sustainable Business Model. Business and Society Review, 118(4), pp.489-511.
Řežáb, J. (2012). Social Media Marketing and Brands' Social Marketing Behavior. Central European Business Review, 1(1), p.49.
Shaw, M. (2010). Pizza perfect. New Scientist, 205(2746), p.27.
Sheehan, N. (2014). Pizza, Pizza, Pizza: A Competitive Strategy Exercise. Organization Management Journal, 11(1), pp.40-46.
Tallman, S., Luo, Y. and Buckley, P. (2017). Business Models in Global Competition. Global Strategy Journal.
Thareja, P. and Sharma, A. (2011). Leaning Pizza to Value Production for Competence (Visualizing Value in Pizza to Profit). SSRN Electronic Journal.