Domino’s Pizza Business Strategy
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Published: Tue, 06 Jun 2017
Strategic planning is all about where organisation wants to be in a specific time period with allocated budgeting. That is only possible when an organisation has tactical plans of resources, obstacles and the time frames that can break down strategic plan and make it attainable. Organisation needs to have an operational plan of how they want to achieve their strategic plan in consideration with the tactical requirements. Operational plan needs to answer all the management questions of who, when, where, how, what and engage their team in deciding all these factors.
It is very much important for an organisation to have a proper Organizational Audit before making a strategic plan. And as Dominos is in a market segment that changes very often and also entering a new market of Europe which is completely different than the Australasian market, the strategic plan has to be reviewed frequently
New strategy has to be made with the consideration of all stake holders involved in the organisation. As Domino’s strategic plan is to enter a complete new market of Europe and also become more aggressive in the existing market, the strategy will have a major impact on all the current stake holders. Let us have a look at the current stake holders and their influence on the company strategy in terms of what they look for in the organisation.
Major Stake Holders and their influence on the organisation:
Employees: High Pay, Job Security, good working environment, Career development, Training,
Share Holders: interested in high profits, organisation growth for future benefits, their say in the business,
Suppliers: Long term business aspects, regular orders and payments, growth of the organisation leading to more business
Financers: Repayments and interests, regular payments, cash turnover
Customers: Quality and innovative products, low prices, value for money, excellent service,
The Government: Employment, Compliance of government laws and policies, tax payments, contribution to economic growth of the country.
Domino’s Organizational Audit:
Organizational Audit helps organizations to justify their current strategy, understand how they operate, know the effects of their operations on the external environment, realize what their management structure is and how best they can utilize it, plan transformation into a different segment. Below table indicates the points important for Domino’s new Strategic Plan.
Strategic Change Requirement
Existing strategic plan
Going towards the right direction until now and is a good platform for the next strategy
New Strategy will be in line with the existing one as a continuation.
Very strong operations
Will need some changes in order to keep with the time technologically.
Strong management structure
Will require some changes to cop up with the new Franchisee operations.
Working in accordance with the requirements of the external demands of Customers, government, stakeholders,
Will have to consider market environment we are entering in. the Europe Market
Current transition has worked for the markets of India and Singapore
Will be a complete different approach to the European culture, lifestyle of the people and the culture
Dominos Strategic Plan For the next 5 years:
An organization’s strategic planning comprises and considers various factors affecting the process of strategy planning, development, execution and evaluation. Dominos entering Europe market and the company vision is to become number one pizza company in Australasia and Europe in the next 5 years. In order to fulfil their vision, Dominos needs to prepare a strategic plan considering following factors that determines the effectiveness and success of their strategy.
Reviewing Vision Carefully:
In order to fulfil a vision, organisations need to review it carefully and make sure that they develop their vision depending on the market segment they are in and the external environmental effects on their vision. An organisation may change its vision or the time scale of its attainment depending on the circumstances they come across. Review of a vision is vital before making a proper strategic plan. Dominos has reviewed their current position and the growth statistics. Also have considered their launch and success in the Asian market and the time it took to establish the brand there. The vision is carefully developed considering all those aspects and the strength of the human resources the company has.
In order to achieve a vision it needs to be SMART. A poorly established vision without this analysis can be really difficult to attain.
Specific: a vision needs to be specific and well communicated to all levels of management hierarchy. Everyone involved should know what they need to achieve. Dominos vision is to become number one in pizza market and it is well communicated to all.
Measurable: an organisation needs to quantify its objectives leading to attainment of its vision. Dominos has a plan of opening a particular number of stores in France, Belgium and The Netherlands with an estimated customer base and turnover within the next 5 years which will result in its becoming number one.
Achievable: an organisation needs to understand what it is trying to achieve and whether it is achievable. Unrealistic goals can result in an organisation going behind instead of growing towards its vision. Last 5 years growth statistics suggest that the vision in the next 5 years is really attainable.
Realistic: it is very important for an organisation to understand its resources in order to achieve what it is aiming for. It has to consider its human resources, capital, materials and technology to make its vision realistic. Dominos has developed required human resources and capital from their franchisee business expansion and has become technologically sound with their high profile IT department.
Time Bound: a vision has to have a time scale that can give positive direction to all activities involved. 5 years is a realistic time period for Dominos considering its current market place and growth.
In order to have a proper strategic planning, an organisation has to understand its own internal strengths and weaknesses as well as the external threats and opportunities. It should also consider
Strengths: superior product range and quality, excellent services, online training for staff, higher technology with internet and iphone ordering, strong leadership and management team, strong marketing,
Weaknesses: some untrained staff, lacking presence in the entire market, franchisee and corporate business variations, poor perception by customers due to competitor marketing.
Threats: Direct competitors like leading Pizza companies like Pizza Hut, Hell Pizza, U.S Pizzas and also indirect competitors like major food outlets of McDonalds, KFC, Burger King and small fish and chips stores
Opportunities: Larger consumer market with a huge business potential. Untouched pizza market to cover and grow like Europe and all of Asia, more business from the existing market going to competitors.
Political Factors: Political factors are very important in making a strategic plan for a particular market. Government policies play a vital role in the growth of an organisation due to its priorities towards supporting a business. European Union policies determine the kind of goods and services Dominos can provide and the effects of its operations on the health and safety of its economy and the lifestyle of the community.
Economical Factors: Economic factors play a vital role in an organization’s operations and growth in a particular market. Economic stability, taxation in European Union, Inflation, Exchange Rates, interest rates are all important as they all will affect Domino’s operations. Inflation may result in higher wages and the same time higher interest rates can be a hesitation for investment by future franchisees.
Social Factors: Socio cultural factors play a vital role in preparing proper product range and services. European culture and lifestyle completely differs from Dominos existing Australasian market. That determines the kind of products to be established and the way to present them to the community.
Technological Factors: Development and use of technology in a particular market determines the marketing and product development plans for an organisation. As Dominos operations and marketing require the same technology available worldwide, technological factors are the easiest achievable objectives for strategic planning in Europe.
Environmental Factors: Environmental factors are very important in determining the products, pricing, service and growth of an organisation. Climate change can result into higher food prices and poor services and operations. European weather is good for a pizza business according to the research and statistics. Environmental awareness can still create some restrictions in terms of operations and procedures.
Legal Factors: profitability and growth of a business depends on the legal environment it operates in. Wage regulations and taxation laws in Europe are different than the ones in Australasia determining dominos franchisee business policies and also the human resources and capital management.
Establish and execute strategic objectives:
After all considerations of realistic vision, stake holder’s influence, Business and market analysis, organisation needs to develop and select various strategic options. All chosen options look considerable but only a few can be realistic depending on the issues and obstacles an organization is going to tackle in a particular market. This is the reason the decision makers should consider SMART analysis as mentioned earlier for their objectives. One of the Dominos strategic objectives is to open 50 pizza stores in the first 2 years in France, Belgium and Netherlands with the turnover objective of 75million Euros a year and ultimately a minimum of 200 stores across these 3 countries in the following 3 years with the market share of more than 30% which will make Dominos number 1 pizza company in Europe.
A proper deployment plan is very much important to achieve strategic objectives. Poor implementation can result in an organization undermining its own potential and strategies. Developed objectives can only be achieved if they are executed and monitored properly.
An organization should be completely aware of the resources it requires to establish a new strategy. Entering into a new market requires resource management from the scratch. Developed strategies should be assigned to key personals with specific resources rather than using wide range of resources with no key personal appointed. Following are the resources important for Dominos for its strategic planning process in European market.
Human capital & Market Research
Production & Logistics
Constant review of a deployed strategy on timely basis is an important key factor in the success of a long term strategic plan. Progress of the strategy during the given time period can determine the deviations required for the attainment of the vision. First year monitoring of Dominos strategic planning in European market will determine the success of the long term vision. One of the Dominos developed strategies is to open 50 stores in the first 2 years in France, Belgium and The Netherlands with an estimated turnover of 100 million Euros a year and ultimately total of 200 pizza stores across these three countries in the following 3 years with a market share of 30% which will make Dominos number one pizza company in Europe within a period of 5 years.
A good strategic plan determines where an organization is heading and whether it is in the right direction. it gives an indication of an organization fulfilling its vision In the determined time period. That will have a positive impact on its stake holders which can again result in a better stake holder faith in organization’s growth and position in the market.
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