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In order to avoid the high manpower turnover that comes with delivery jobs, TelePizza has provided opportunities to move up the ladder for entry level employees with incentives. In order to cope with a high employee replacement, TelePizza instead sought to upgrade both its entry-level employees and the responsibilities they handled. Together with performance measurement systems (couponing system), employees could be evaluated.
• After sales service forms a very important part of TelePizza’s management philosophy. As an example, employees at TelePizza thank every tenth customer who visited their store for their order and also provide special discounts and schemes to customers who have not ordered a pizza for the past 6 months. TelePizza came up with new methods to satisfy customers. Furthermore, employees got trained on acting in customers favour. • By replacing the word “pizza” with “TelePizza”, TelePizza sought to build the brand strongly in the mind of the customer. TelePizza also builds up a distinct identity in the customers’ mind by consistent clothes and mopeds. Focus is also given to on-time delivery and customer service, wchih further contributes to the brand. Furthermore TelePizza sells non-pizza items as well. As part of promotions, TelePizza offers economical prices and special offers in the form of coupons. In order to attract children, which are generally the ones asking for the pizza, TelePizza offers membership at a “Magic Club”, which involves free videotapes of magic tricks with the necessary gadgets to perform these tricks for club members with increases in pizza orders.. In order to further promote awareness among children, TelePizza continuously invites kindergarten and elementary school children to their stores for a tour, pizzas and photographs. All of these efforts led to a brand awareness of almost 100%. •The acquisition of Pizza World in May 1997, which was the third largest pizza joint in Spain at that time further contributed to growth. TelePizza was also careful to not destroy the brand of Pizza World as it was aware that the target market for Pizza World differed from that of TelePizza though the company brought in the same practices followed at TelePizza to maintain a sense of uniformity in operations. •Through franchising, TelePizza has been able to expand its market more rapidly and it also gave store managers the opportunity to run these franchises. •To maintain predictable quality,TelePizza are centrally producing their dough in Spain and buy the other ingredients from two or three manufacturers in order to ensure consistent quality and taste. Apart from the new and appropriate management concept, market features were in favour of TP, because the pizza delivery market in Spain was fairly underdeveloped. Telepizza has an almost obsessive commitment to growth. At the moment, they have three options for growth: expansion within the domestic pizza market, international expansion or introducing new concepts like TeleGrill. • Domestic Expansion: Telepizza has seen a 20% growth p.a. during the last few years and is optimistic about an ongoing growth in comparison …show more content…
For making sure to keep the share price at its current level, it is important that TelePizza meet its forecasts though they have been able to achieve the same by setting more conservative forecasts and then outperforming them continuously leading to higher valuations. However, considering the above points, if the forecasts are not beaten or at least met, share price will decline heavily. As per analyst’s estimates, EPS for TelePizza is expected to rise rapidly at more than 100% from 1997 to 1999E. Neither the fast food companies nor the high growth Spanish companies are aiming for such a high growth, which makes the forecasts seem a bit more unrealistic. The exhibit shows that these companies have either come up with a conservative growth or are stagnating. Though TelePizza has been able to set itself apart from all its competitors by offering new services, it is important to note that share price is being driven by projection of all the future expectations. This implies that if the actual results fall short of the demanding forecasts, share price will fall. This could happen in the scenario that people could be fed up of eating pizzas, which may enable a switchover to other foods such as burgers at McDonalds, which makes the successful diversification of TelePizza into TeleGrill and TeleOriental (eventually) a critical
• After sales service forms a very important part of TelePizza’s management philosophy. As an example, employees at TelePizza thank every tenth customer who visited their store for their order and also provide special discounts and schemes to customers who have not ordered a pizza for the past 6 months. TelePizza came up with new methods to satisfy customers. Furthermore, employees got trained on acting in customers favour. • By replacing the word “pizza” with “TelePizza”, TelePizza sought to build the brand strongly in the mind of the customer. TelePizza also builds up a distinct identity in the customers’ mind by consistent clothes and mopeds. Focus is also given to on-time delivery and customer service, wchih further contributes to the brand. Furthermore TelePizza sells non-pizza items as well. As part of promotions, TelePizza offers economical prices and special offers in the form of coupons. In order to attract children, which are generally the ones asking for the pizza, TelePizza offers membership at a “Magic Club”, which involves free videotapes of magic tricks with the necessary gadgets to perform these tricks for club members with increases in pizza orders.. In order to further promote awareness among children, TelePizza continuously invites kindergarten and elementary school children to their stores for a tour, pizzas and photographs. All of these efforts led to a brand awareness of almost 100%. •The acquisition of Pizza World in May 1997, which was the third largest pizza joint in Spain at that time further contributed to growth. TelePizza was also careful to not destroy the brand of Pizza World as it was aware that the target market for Pizza World differed from that of TelePizza though the company brought in the same practices followed at TelePizza to maintain a sense of uniformity in operations. •Through franchising, TelePizza has been able to expand its market more rapidly and it also gave store managers the opportunity to run these franchises. •To maintain predictable quality,TelePizza are centrally producing their dough in Spain and buy the other ingredients from two or three manufacturers in order to ensure consistent quality and taste. Apart from the new and appropriate management concept, market features were in favour of TP, because the pizza delivery market in Spain was fairly underdeveloped. Telepizza has an almost obsessive commitment to growth. At the moment, they have three options for growth: expansion within the domestic pizza market, international expansion or introducing new concepts like TeleGrill. • Domestic Expansion: Telepizza has seen a 20% growth p.a. during the last few years and is optimistic about an ongoing growth in comparison …show more content…
For making sure to keep the share price at its current level, it is important that TelePizza meet its forecasts though they have been able to achieve the same by setting more conservative forecasts and then outperforming them continuously leading to higher valuations. However, considering the above points, if the forecasts are not beaten or at least met, share price will decline heavily. As per analyst’s estimates, EPS for TelePizza is expected to rise rapidly at more than 100% from 1997 to 1999E. Neither the fast food companies nor the high growth Spanish companies are aiming for such a high growth, which makes the forecasts seem a bit more unrealistic. The exhibit shows that these companies have either come up with a conservative growth or are stagnating. Though TelePizza has been able to set itself apart from all its competitors by offering new services, it is important to note that share price is being driven by projection of all the future expectations. This implies that if the actual results fall short of the demanding forecasts, share price will fall. This could happen in the scenario that people could be fed up of eating pizzas, which may enable a switchover to other foods such as burgers at McDonalds, which makes the successful diversification of TelePizza into TeleGrill and TeleOriental (eventually) a critical