Dominos Pizza

    Dominos Pizza SWOT & PESTLE

    • Report

    • ID: 535492
    • 20 Pages
    • April 2023
    • Region: North America
    Report Menu

    About Dominos Pizza

    Founded in 1960 by Monaghan brothers Tom and James, when they purchased an old restaurant in Ypsilanti, Michigan, United States, it was initially named DomiNick’s. The company operates a network of franchise owned Domino’s pizza stores across the globe that has both delivery and carryout business segments. In 1983, Domino’s opened its first international store in Winnipeg, Canada. It has grown into a global enterprise with over 17,600 stores in more than 90 markets as of 2023. In 2004, Domino's Pizza, Inc. became a publicly traded company at New York Stock Exchange (NYSE). With prime focus on pizza delivery, the company’s business model feeds on quality food at competitive price, with easy ordering access and efficient service aided by technology innovations. Domino's sells 3 million pizzas on an average, globally. Initially, Domino’s only offered two sizes of pizza and one drink for around 30 years. It now offers varying crust types and sizes along with a long list of side orders, desserts and beverages. Their pizza toppings vary according to country and culture and often feature regional specialty items.

The USP of Domino’s Pizza lies in it being the world leader in global QSR pizza, with 15% market share in global QSR pizza market. It has surpassed its largest competitor Pizza Hut with highest global retail sales. Its mission statement reads ‘To be number one’.

    Business Sector

    Restaurants

    Operating Geography

    United States, North America, Global

    Revenue

    US$ 4.418 billion – FY ended 30th June 2022 (YoY growth of 1.78%)

    US$ 4.357 billion – FY ended 30th June 2021

    SWOT

    SWOT Matrix for Dominos Pizza

    Strength

    Weakness
    1. Strong franchise business model
    2. Strong brand name in the QSR industry
    3. Continuous product innovation led to company’s growth
    4. Established technological innovation and capability
    5. Developed operational efficiencies over the years
    1. Short term contracts with suppliers
    2. Failure of business in Italy
    3. Subject to a number of fines for business practices

    Opportunity

    Threat
    1. Strong growth in Quick-Service Restaurant (QSR) pizza category
    2. Cut delivery times by adding more locations
    3. Geographic expansion by scaling store count
    4. Expanding into new concept store
    1. Covid 19 pandemic adversely affecting the financial conditions
    2. Labor shortage and increase in other costs are shaving off profits
    3. Product contamination or food tampering poses a great threat to the business
    4. Increase in food costs due to inflation

    Detailed SWOT Analysis of Dominos Pizza

    The detailed SWOT analysis for Dominos Pizza is presented below:

    Strength

    1. Strong Franchise Business Model: Domino’s runs on a 100% Franchise model Internationally and 95% in the United States. The stores outside the U.S. are operated by master franchises with distribution rights for the entire region or country. With strong unit level economics, franchise profitability is at the center of everything they do. Over the years they have developed a cost-efficient store model with moderate capital requirements. Their focus is on the carry out and delivery business rather than the dine-in experience, thus making the stores generally smaller and less expensive to build. This combined with strong sales volume has led to strong store-level economies of scale, making Domino’s an attractive business opportunity across the globe. Same store sales increased by 3.5% in 2021 in the U.S. stores and increased by 11.7% in 2021 in international stores. They have strong International Franchise partners like Jubilant FoodWorks Limited, Domino’s Pizza Group PLC and Alsea SAB de CV that operate over 1000 stores in South Asia, UK and Mexico respectively. The franchise model has produced strong and consistent earnings for Domino’s through royalty payments.

    The remaining points in this section are available in the 'Complete Report' on purchase.

    Weakness

    This section is available only in the 'Complete Report' on purchase.

    Opportunity

    This section is available only in the 'Complete Report' on purchase.

    Threat

    1. Labor shortage and increase in other costs are shaving off profits: Increase in labor shortages at the stores and supply chain centers leads to increase in costs as employees have to work overtime to meet the demands which leads to increase in wages. The company is grappling with a driver shortage and has been reluctant to use third-party delivery options. This could affect the efficiency of the company and result in negative impact on services and customer experiences. And usually when the costs are beyond the company’s control, they tend to increase their menu prices to offset these costs but this high price strategy will lead to decrease in demand, sales and profitability.

    The remaining points in this section are available in the 'Complete Report' on purchase.

    PESTLE

    PESTLE Matrix for Dominos Pizza

    Political

    Economic
    1. Increasing political lobbying expenditure
    2. Impact of Brexit on the European business
    1. Adverse global economic conditions
    2. Impact of fluctuations in exchange rate on bottom-line

    Social

    Technological
    1. Consumer focus on food safety
    2. Delivery takes a hit as Americans cook more at home
    1. Adaptation of new technology and alternate delivery methods
    2. Leveraging digital and social media marketing
    3. Cyber-attack may impact the operations of the company

    Legal

    ENVIRONMENTAL
    1. Risk of Litigation in the QSR Industry
    2. Complying with government regulations and requirements
    1. Reducing the carbon footprint
    2. Deployment of electric vehicles for delivery to promote sustainability

    Detailed PESTLE Analysis of Dominos Pizza

    The detailed PESTLE analysis for Dominos Pizza is presented below:

    POLITICAL

    1. Increasing Political lobbying expenditure: Lobbying refers to swaying the government decisions to protect individual or a groups interest. Lobbying has become an inevitable part of the US political system. Companies in the industry often retain lobbying firms to push their case to the government. In the past decade the restaurant industry has witnessed a hike in total lobbying expenditures. Domino’s Pizza has also been increasing its lobbying expenditure given the increasing health consciousness and health activists wanting to implement ban on “unhealthy” food. Political contributions ensure that the interests of their stakeholders are protected during formulation of new laws. According to opensecrets.org, for year 2021 and 2022 Domino’s through its subsidiary Domino’s National Advertising Fund spent $280,000 and $140,000 on lobbying respectively.

    The remaining points in this section are available in the 'Complete Report' on purchase.

    ECONOMIC

    This section is available only in the 'Complete Report' on purchase.

    SOCIAL

    This section is available only in the 'Complete Report' on purchase.

    TECHNOLOGICAL

    This section is available only in the 'Complete Report' on purchase.

    LEGAL

    This section is available only in the 'Complete Report' on purchase.

    ENVIRONMENTAL

    This section is available only in the 'Complete Report' on purchase.

    Table of Contents

    • Company Overview
      • 1.1 About the Company
      • 1.2 Business Sector
      • 1.3 Operating Geography
      • 1.4 Revenue
    • SWOT Analysis
      • 2.1 SWOT Table/ SWOT Matrix
      • 2.2 SWOT Overview
      • 2.3 Detailed SWOT Analysis
      • 2.4 Strength, Weakness, Opportunity and Threat
    • PESTLE Analysis
      • 3.1 PESTLE Table/ PESTLE Matrix
      • 3.2 PESTLE Overview
      • 3.3 Detailed PESTLE Analysis
      • 3.4 Political, Economic, Social, Technological, Legal and Environmental
    • Appendix
      • 4.1 Major Competitors
      • 4.2 Business Sectors / Diversification
      • 4.3 References used to prepare this reports
    • Conclusion
      • 5.1 Closing thoughts
      • 5.2 Methodology used to prepare this report
      • 5.3 Copyrights and Disclaimer

      References and Copyright

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