Dominos Case Analysis Essay

3718 Words Nov 26th, 2012 15 Pages
Strategic Profile and Case Analysis Purpose Dominoes was found in 1960 and headquartered in Ann Arbor, Michigan. Domino’s Pizza Inc. is the market leader in the United States pizza delivery and second largest pizza company in the world based on number of units. The company offers a wide variety of pizza products as well as pasta, bread sticks, boneless chicken and wings, desserts and soft drinks. As of the beginning of this year, 2012, Domino’s had 394 company-owned stores and 4,513 franchised Domino’s units in the U.S. and 4,835 franchised stores internationally. Domino’s strategy is to use its superior supply-chain to provide its franchises with lost cost inputs so the franchises may focus on sales and service. Through the online …show more content…
Threat of new entrants | ●Economies of Scale: The saturation of the pizza industry is a huge limiter of how much an advantage can be attained by economies of scale.●Product Differentiation: Differentiation is a necessary expense in the pizza industry but it is not difficult to overcome so we can say it is not a significant barrier to market entry.●Capital requirements will dominate the formation of new, national competitors, but is not a significant barrier to private startups.●Cost Disadvantages: The extreme saturation and similarity in product offering make convenient locations essential for quick service restaurants large and small. This is a significant barrier to entry.●Distribution Channels: Speedy and reliable channels are essential among all firms in the industry, they are not necessarily difficult for new comers to attain. Due to the lack of any of the barriers to entry being so significant, we feel the threat of new entrants is high. | Power of suppliers | The bargaining power of suppliers shapes the restaurant industry by determining the food commodity costs. Restaurant operators usually negotiate on their purchases through future contracts; however instability in food goods costs can constrain the power to price their products. Suppliers for Domino’s pizza have low bargaining power, due to the high volume of

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