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In case study the topic is pizza wars which happen in India in 1996 when Pizza Hut & Dominos come in India. Until that there is no M.N.C. company in Pizza industry in India. So each company wants to make more profit and its right in India. For this each company launch new product and new skims for took over the second company. So pizza hut relied on its USP of dining experience , and Domino’s USP was 30 minute delivery frame. For customer satisfaction both company change their recipes according to Indian culture. And Domino’s also made a toll free telephone service. Both the company started in India with only one outlet but Domino’s had 101 outlets in April 2001. And Pizza hut also start with only one outlet but it had 19 outlets in 2001.
Domino’s entered in India with an franchise agreement with Vam Bhatia and open its first outlet in Delhi. Pizza Hut also opens its first outlet in Delhi.
At that time Indian wants very low price products but both of these company make costly products but very soon they relished it and make according to customers choice. By competition they gave many discounts and customers enjoy it. Then Domino’s become more popular than Pizza Hut so Pizza Hut start following Domino’s and make Spicy Paneer and Chicken Tikka. It opens a pure vegetarian restaurant at Ahmadabad. For attract people it make a 12″ Pizza Rs 265 and Domino’s decrease price and offered a large Pizza of Rs 129/-. After this sales of Domino’s pizza was increase.
HISTORY OF DOMINO’S:-
Domino’s Pizza, Inc. (NYSE: DPZ) is an international pizza delivery corporation headquartered in Ann Arbor, Michigan, United States. estlistid in 1960, Domino’s is the second-largest pizza chain in the United States. Now it has nearly 8500 corporate and franchised stores in 70 international markets and all 45 U.S. states. Domino’s Pizza was sold to Bain Capital in 1998. Domino’s menu features pizza, pasta, oven-baked sandwiches, wings, boneless chicken, salads, breadsticks, cheese sticks, and a variety of dessert items.
In 1960, Tom and his brother, James, purchased a small pizza store in, Michigan. The deal was secured by a US$75 down payment. In 1965, the first Domino’s Pizza franchise store opened in Ypsilanti. The company logo was originally planned to add a new dot with the addition of every new store. By 1978, the franchise opened its 200th store. In 1975, Domino’s faced a lawsuit by Amstar Corporation, maker of Domino Sugar, alleging trademark infringement and unfair competition. On May 2, 1980, a federal appeals court found in favor of Domino’s Pizza.
In a 2009 survey of consumer taste preferences among national chains, Domino’s was last – tied with Chuck E. Cheese’s. In December that year, Domino’s announced plans to entirely reinvent its pizza. It began a self-flogging ad campaign in which consumers were filmed criticizing the pizza’s quality and chefs were shown developing the new product. The new pizza was introduced that same month, and the following year, Domino’s 50th anniversary, the company acquired J. Patrick Doyle as its new CEO experienced a historic 14.3% quarterly gain. The success was described by Doyle as one of the largest quarterly same-store sales jumps ever recorded by a major fast-food chain.
Domino’s tapped into a market trend toward bite-size foods with spicy Buffalo Chicken Kickers, as an alternative to Buffalo wings. The breaded, baked, white-meat fillets, similar to chicken tenders, are packaged in a custom-designed box with two types of sauce to “heat up” and “cool down” the chicken.
In August 2003, Domino’s announced its first new pizza since January 2004, the Philly Cheese Steak Pizza. The product launch also marked the beginning of a partnership with the National Cattlemen’s Beef Association. Domino’s continued its move toward specialty pizzas in 2006, with the introduction of its “Brooklyn Style Pizza”, featuring a thinner crust, cornmeal baked in to add crispness, and larger slices that could be folded in the style of traditional New York-style pizza.
In 2008, Domino’s once again branched out into non-pizza fare, offering oven-baked sandwiches in four styles. Early marketing for the sandwiches made varied references to its competition, such as offering free sandwiches to customers named “Jared,” a reference to Subway’s spokesman of the same name.
The company introduced its American Legends line of specialty pizzas in 2009, featuring 40% more cheese than the company’s regular pizzas, along with a greater variety of toppings. That same year, Domino’s began selling its Bread Bowl Pasta entree, a lightly seasoned bread bowl baked with pasta inside, and Lava Crunch Cake dessert. Domino’s promoted the item by flying in 1,000 cakes to deliver at Hofstadter Bluffs Visitor Center.
HISTORY OF PIZZA HUT:-
Pizza Hut entered India in 1996, and opened its first restaurant in Delhi. It has maintained an impressive growth rate of over40 per cent per annum. Pizza Hut now has about 100 restaurants; and employed nearly 4,000 people by end of 2004. It has invested about US$ 25 million in India; this is over and above investments made by franchisees. Its Brands Inc is the owner of the Pizza Hut chain worldwide. A Fortune 300 company, Yum! Brands own Kentucky Fried Chicken, Pizza Hut, Taco Bell, A&W and Long John Silver’s restaurants worldwide. Yum! Generated more than US$ 25.9 billion in worldwide sales in the year 2003-04, and has more than35,000 restaurants in over 100 countries.
Market share in INDIA:
Pizza Hut is believed to have close to 50 per cent market share of the organized pizza-retailing segment market share in India.
According to an survey of Financial Express, the market size of the pizza segment is around US$ 87 million and currently growing at the rate of 15 per cent to17 per cent per annum. According to Pizza Hut sources, most of their outlets are financially successful encouraging further expansion. In India, the average investment for each outlet is US$ 275,000-335,000 and is borne by the franchisee.
Factors for Success
Offering value food, Employing economies of scale, Pizza Hut has made its offerings more affordable. Its delivery offer of US$ 4.4 for four personal pan pizzas has been very successful. They have recently introduced a range of vegetarian personal pan pizzas for US$ 1.1. Most Pizza Hut restaurants are located in the metros and smaller metros. Pizza Hut is consolidating its position by opening more restaurants in the metros where it already has a presence as well as opening outlets in new markets.
Moving beyond metros According to company sources, Pizza Hut is moving beyond the metros and foraying into 12 to 13 new markets including Trichy, Nagpur, Bhubaneswar, Thiruvananthapuram and Pondicherry to increase penetration. Aggressive marketing and tie-ups with local and popular brands.
Pizza Hut has increased its visibility by launching a well-received TV campaign aimed at the young crowd. It has formed partnerships with recognized brands such as Nestle and Pepsi. Developing the local supply chain. The local supply chain for Pizza Hut was developed by Yum! And currently 95 per cent of the ingredients they use are locally produced. They now import very few specialty items like pepperoni. Leveraging the India Advantage International brand with an Indian heart Pizza Hut is one of the first international pizza chains with purely vegetarian dine-ins at Chow patty (Mumbai), Ahmadabad and Surat, which also serve Jain menus. Pizza Hut has even opened two all-vegetarian restaurants in the western state of Gujarat to cater to the Jain religious community.
Because their members prefer not to eat at places where meat is served. Offering more than the international menu International food chains typically offer only a few localized products in other parts of the world. However, Pizza Hut’s local menu is as large as the international one. According to Pizza Hut, the Indian food heritage is very rich, and hence Indians like local flavors. The Tandoori range of pizzas. Indigenous sourcing of raw materials Pizza Hut has reduced costs through indigenous sourcing of raw material. It has tied up with a local company Dynamics Dairy Industries Ltd (DDIL) for sourcing mozzarella cheese.
What Management Concept(s) or Issues are highlighted in this case?
Ans. In this case
Why did the company face these issues?
Could the resolution of these issues be done in a different manner?
What do you learn from this case?
4. Are you aware of any other company that may have faced similar issues? How did that company resolve those issues?
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