The Macro And Micro Environment Analysis Commerce Essay

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Business can be influenced by many different external stimuli, for example, recession in economy would put a direct effect on any business, moreover, national economy downfall, inflation rates would put and adverse effect on the business too. Besides, what turned out to be an adverse effect for many companies, it became a beneficial point for Domino's pizza, becoming one of the leading and dominant pizza service on earth.

Domino's Pizza results have shown the enough proof that in time of recession their prices and their company remained stable. The trend had totally changed, people who used to eat out were deceased in numbers which shown that people are not willing to make expenditures or maybe they don't have enough to spend.

The CEO of Domino's Pizza was committed to make planning which included a process of obtaining funds which they couldn't get in the past which has been invested on Alternative investment market. Share price of this this company also went up to the top since the company has been established in 1999 and this large group now possess more than 500 sites only in United Kingdom and Ireland, which more plans to open in the future.

'Domino's continue to succeed, even in the current harsh economic conditions, because of domino's unrelenting focus on the quality of domino's pizzas, intense devotion to service and by marketing to domino's customers when and where they want to order. It is this passion that has delivered profit growth of 27.8% to £29.9m (2008: £23.4m) and that will continue to drive domino's business in years to come.

PEST ( Political, Economic, Social and Technological)


Political issues include regulatory frame work operating in judicial system which may affect the business in different ways. There are not many political factors in UK affecting Domino's business. Factors such as laws on business employment, pollution and taxation apply on the organization which it has to follow regarding the rules.


If the county's economy is better so the GDP of the country will be good, this is a green signal for the business as the per capita income of the people will be increased and they will spend more money. In domino's survey domino's came to know that most of the people in the beginning of the months spend more and they visit Domino's very often. When the inflation rate increases the cost of raw material also increases and this leads towards high prices of the products and vice versa.


Domino's is a multinational and it is basically originated from America so the organization is overwhelmed by domino's western culture. There are social forms of society which consist of Upper class, middle class, middle upper class, lower class. Every country has cultural norms, values, beliefs and religion which can affect the organization.


Now a day's technology is improving so as baking and heating ovens will be of new and efficient technology and will provide efficient service. Due to new technology there are new ways of marketing like internet; telemarketing and the organization can advertise their products with much more faster pace. New vehicles will make their service more efficient.

Briefly discuss the industry of sector

The food industry is a complicated and one of the diverse business which operates alongside and provide food to consumers around the world. People who are not considered inside the scope of this industry are those farmers who grow on their land for themselves and survive on it.

The food industry includes:

Laws: which include All laws applicable which govern the food industry whether local, regional, national or international regulations.

Education: This includes academic, vocational and consultancy

Research and development: It would be done with the help of food technology

Financial services insurance, credit

Manufacturing: this would include agrichemicals, seed, farm machinery and supplies, agricultural construction, etc.

Agriculture: raising of crops and livestock, seafood

High level technologies outline prevailing food production. In this many areas are included. Agricultural machinery, human labour has been almost practically eliminated by use of tractor in the field. Biotechnologies are bringing change, in such areas as agrochemicals, plant breeding and food processing.

Key success factors

The critical success factors are related to domino's broad areas, customer's preference for pizza

as a food item.

Its ability to prepare a pizza within a short time, to deliver it within 30 minutes of recording the order, and the store location.

Since Domino's business model is based on home delivery, the speed of preparing the pizza and delivering it are the critical success factors.

International strategies (Competitive analysis)

SWOT Analysis:

Every organization has its strengths, weaknesses, opportunities and threats. So, the

SWOT analysis for Domino's is as under:


Domino's is the market leader in providing different products of pizzas as there are no competitors in this sector. There good image makes the organization more strong. Domino's is providing good taste, quality products with qualified staff, good atmosphere and hygienic environment. They are specialized in pizzas. Motivation level of staff is very high which make the organization more prosperous. They are ISO (International Standard Organization) certified. They have enough resources for operating different activities of the organization. They are providing free home delivery service. They have created monopoly in this sector. Domino's can market too many different segments that other pizza chains cannot. For example, Domino's can market to families much easier than Domino's or Little Caesar's.

Domino's weaknesses:

The fact that Domino's does have a restaurant to run is also a weakness. Domino's has higher overhead costs Obviously, Domino's is not the low cost producer. They rely on their quality pizza and good service to account for their higher prices. They are providing less range of products comparatively with high prices. They are more focused on western taste instead of Eastern.

Very few outlets have dine-in facilities

The menu is limited and pricey, and there are very few budget items on the menu.


New markets can be explored and new opportunities they can gain. Domino's can come up with the new products considering the Eastern taste of the people as like McDonalds. Diversification of new products can increase their market share. They can reduce their prices because of more Domino's.


Domino's number one threats are from their competitors. Currently, their closest competitor is pizza hut who is working to open their branch rapidly. Domino's main competitive advantage over Pizza hut is their lower price but the difference is not too big.

Evaluate domino's company strategies with other different companies:

Dominos has achieve significant achievement over its life and expanded all over the world but this make it unable to mange to develop its local markets efficiently because of this rapid expansion. Traditionally dominos has maintain high quality throughout its life but in this crises of finance its difficult for dominos to compete on prices with low cost manufacturers.


The status of Domino's has been as a private company, After making benchmarks with competitors, it has been observed that the level of sales for many years has been the same, which is a big achievement and is financial indicator that the organisation is towards growth and success in the retail business. It seems like good news for company.

Speaking of bad news, the growth at which the competitors were going it was faster as compared to that of Domino's. It was actually giving up market share. At the same time, Domino's were celebrating internal celebrations of the fact that against our own internal matrix Domino's were doing well. Domino's did not only have to consider the past achievements and results in benchmarking but also it needed to take a look around at competitors, and on many occasions, Domino's require to realize what their outcomes are and initiate to grip ourselves responsible for that particular level of functioning.


Upon successful establishment of a business, masses think that there is no room of improvement any more, but things change either towards betterment or worseness. The minute companies become satisfied and pathetic in a minute when they go down.

Organisation business plan:

A business's plan is the way of decisions and conducts made by the business to accomplish its goals. A business has a diversity of goals and objectives. In order to achieve business goals businesses should make sure that they organize their business in most efficient and effective manner; in achieving those objectives different plans are made. In the same way, Domino's has laid down many objectives which will help achieve the targets. Internal and external changes in the environment have made Domino's to reconsider the past strategies. The PEST and SWOT analysis illustrate the changes in environment. After rethinking all the factors Domino's has taken decision upon establishment of business plan, called functional plans

These plans have been designed to make improvement in the operation efficiency of a business. All business organizations take on plans at practical level as once the practical objectives are accomplished; business objectives turn out to be easy. In order to make the practical strategy well organized, Domino's has made coordination among all its department.

Porter's Five Forces analysis of market structure:

We will understand market for new product of domino's with help of porter's five forces model.

Porter's Five Forces analysis of market structure

Porter five forces model used to analyse the competitive structure of the industry in which an organization is based and therefore porter five forces help in understanding the industry in which organization operate and its overall attractiveness or otherwise.

The porter present its model in 1980 where it describe the forces that can affect the activities and decision of an organization.

Domino's pizza is operating in the food industry where there are number of factors which it must take into account in order to device an effective strategy to gain competitive advantage and higher profitability.

The five forces model of porter include following forces.

the threat of new entry

power of customers

competitive position of competitors

power of suppliers

threat from substitute.

The likelihood of new entry

The entry of player in the market affect the competitive position of domino's and therefore this force is great threat for dominos as there is not much barriers to prevent the entry of new player.

This threat in general depend on following factors

This threat is significant for dominos because the cost of opening a pizza shop not too high and therefore every day new restaurant are opening which are causing more competition and price war between existing players and new player and therefore ultimately the profitability of a company is affected by these actions.

The bargaining power possess by the buyers.

Domino's is operating in the food industry where there are many customers who are very small and have direct connection with each other as they are separate and geographically dispersed and therefore have in theory very little bargaining power and which means domin's can increase the prices and profitability with less threat of being these action causing decline in the sales revenue.

The negotiation power which suppliers hold is higher.

Domino's case this doesn't apply because dominos's is big firm and therefore have establish relationship with suppliers most of them are not big enough than domino itself.

The competitive position of rivals:

This measures the degree of competition between existing firms. The higher the degree of rivalry the more difficult it is for existing firms to generate high profits.

Domino's is operating in a industry where competition is natural and inherited and therefore this force is very important.

The substitute threat.

This measures the ease with which buyers can switch to another product that does the same thing e.g. aluminium cans rather than glass or plastic bottles. The ease of switching depends on what costs would be involved (e.g. transferring all your data to a new database system and retraining staff could be expensive) and how similar customers perceive the alternatives to be.

Analysis marking:

A critical factor in Pizza Hut's success has been a menu that has constantly evolved and expanded to cater to the changing needs and specific preferences of customers in different parts of the world. In having understood the pulse of the customers, Pizza Hut has clearly established itself as a brand with a Britain heart and Domino's need to learn that.

GE marking and shell marking:

By bringing new ideas into work, Domino's sales had gone up by introducing new pizzas for example Metero. Second one to mention would be Rugby theme Scrummy, alongside the new ways in which orders are made. Orders are not only taken via phones but also online, cell phone texts. This type of ordering has gone up in a significant way. Environment of outside is very dynamic and is rapidly changing, everything which is outside the boundary of the business would be counted as an external source.

International market approach:

Domino's concept is focused on outstanding people on a task to become the greatest pizza delivery company on earth. The commitment is to bring joy, energy and value to customers by making a delivery of pizza on time. Because the aim of the company is not only to provide services on their outlets in fact reaching out to customers on single call and by way of quickest delivery be at their door step.

Customer should have many options to choose from the menu. Variety of different combination would give an edge. Customer should have the feeling that he is getting the finest offer whereas company making sure that it is earning to its extra potentials. Menu cards show that different types of pizzas have different prices on them; family size pizza can be one example of this. The extreme profit is made in meat items which is again with different combinations and verities is combined together to make an individual pizza.

As soon as customer is on the table or an order has been made from outside, not only reasonable price is charged but also on some occasions discount coupons are provided to customers so that not only they can have their delicious food in a fine environment but also have some inducement to buy from Dominos. Hence, consumers are compelled to uphold trust towards Domino's.

Endurance, shaping relationships and making use of change in condition

Over long period of time, Domino's has grown and brought a wide range of products to the table which gave Domino's an additive advantage over its competitors, which included internationally famous pizzas for instance, Italian pizza, pan pizza and stuffed crust. In the menu offers the option of a complete meal.

Besides, Dominos are nowhere behind their competitor Pizza Hut in bringing in home tradition. Domino's have a firm belief in their slogan that Think global act local.

How the firm should make an entry into the market:

Domino's market entry strategy focus on extensive advertisement and one example of which shown when domino sponsor Britain got talent but advertisement is not the only way dominos enter into any particular market but the maintaining of quality make itself able to launch in any market because of its strong brand name.

Domino's Pizza could manage to cover the market by providing Pizza with a quick home delivery system. Dominos not only captures walking customers but also makes advertising on various media to capture wider areas so that more market is covered.

Progress plan:

Pizza hut is defined generally as a family deal. The reason behind it is they don't approach their customers in a direct way. They focus entire proportion at the other hand their rivals focus a certain demographical area. However pizza hut aims at a wide range of population. By successfully doing this, they achieve their targets in a profitable manner.

They are faced by many rivals in the industry due to which they have to do almost everything to stay in the market because their competitors are on every high street. Pizza hut not only makes a commitment to provide best food but also considers the prize to which it should be delivered, making it as reasonable as possible.

They try to give something extra in their commitment, i.e. in their food they give unique variety of stuff crust which brings customers to their doors every now and then. Their menus also have vegetarian pizzas with salad and past bar which is not offered by many restaurants. This is one of those ideas which could attract more customers.

Thereby the maintenance of quality and high brand through customer make dominos able to save significant amount on future promotion though domino's expansion plan focus on the opening new stores and franchises and also on the promoting itself in new market area which were previously not addressed properly.

Likely development in next 10 to 20 years:

Top management level of Dominos is unable to grasp the key idea which could bring change growth and innovation. They couldn`t get the whole process from which an organisation goes through which starts from birth and taken to a level of growth and maturity eventually reaching at a level of decline. This process is simply unavoidable.

In the initial stage of growth, capital expenditures are made with very little or no return. It's only through crunching operational incompetence and ineffectiveness, obtaining and or inclining market share that companies regain their initial capital expenditures

Dominos stayed at position of S-Curve where maximum return are being gained without taking account of the fact that decline of profits are probable. Only time can tell whether they have team and leadership development which will finally decide whether they will incline or decline.

Reasonable suggestions for enhancement and advancement in overall scenario.

•Bring new things in the way Pizzas are made.

•Concentrate on areas where the outlets are situated.

•Take the quality of pizza the upper level.

•Maintain good environment in outlets.

•Should concentrate more on marketing itself confidently.


Domino's Pizza regularly innovates the way its product goes with the likings of its customers and in feedback getting customer's satisfaction. The slogan of this company which illustrates its aim is that Think Global and act local. Hence, every now and again Domino's Pizza has been suiting its products with delicious touch for consumers. Moreover, giving quality food at reasonable price has been one of the earliest mottos. Steps have been taken such as Fun Meal and Pizza Mania to popularize it more among consumers.