Case Study Papa Johns

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Papa John’s faces a few key strategic challenges. Firstly, Papa John’s faces strategic challenges based on its pricing model. Papa John’s pizza items are currently higher priced than its main competitors, Domino’s, Pizza Hut, and Little Caesar’s (Madhani, 2016). Value-minded customers may decide to purchase pizzas at competitors if they feel the competitor offers a similar product at a cheaper price. In an industry where products are similar and are difficult to substantially differentiate, such as the retail pizza industry, customers can be price sensitive. Gordon, Goldfarb, & Yang (2013) report that price sensitivity typically rises in periods of economic downturn. During an economic downturn, Papa John’s may face increased pressure to lower …show more content…
Papa John’s has fewer retail locations than all three of its main competitors, Pizza Hut, Domino’s, and Little Caesars (Madhani, 2016). Papa John’s leadership team will need to decide whether they want to add additional locations to gain market share, or whether they want to strategically open locations to gain increased profitability. Opening new locations in areas that are oversaturated with national chain competitors or local pizza restaurants may not be the best decision going forward. During the 2008 financial crisis, Papa John’s closed many locations due to poor performance (Parnell, 2014). Over expanding could place Papa John’s in a situation where they are again faced with closing stores in the future. Local market research will be important to any decisions Papa John’s makes in the expansion area. Franchising has been a tool that Papa John’s has used extensively to expand and grow over time. However, franchising does not come without risks to the national brand. For instance, one Papa John’s franchise owner featured a local advertisement on September 11th that was deemed insensitive by many in the public (Wave 3 News, 2016). Franchising takes away a portion of corporate control and can ultimately damage a brand if not managed …show more content…
R., Goldfarb, A., & Yang, L. (2013). Does Price Elasticity Vary with Economic Growth? A Cross-Category Analysis. Journal of Marketing Research (JMR), 50(1), 4-23.

Just, D. R., Sığırcı, Ö., & Wansink, B. (2014). Lower Buffet Prices Lead to Less Taste Satisfaction. Journal of Sensory Studies, 29(5), 362-370. doi:10.1111/joss.12117

Madhani, A. (2016, January 30). Papa John 's tries new tack to challenge Pizza Hut, Domino 's for pizza supremacy. USA Today. Retrieved October 2, 2016, from http://www.usatoday.com/story/money/2016/01/29/papa-johns-tries-new-tack-challenge-pizza-hut-dominos-pizza-supremacy/79488352/

Parnell, J. A. (2014). Strategic management: Theory and practice (4th ed.). Los Angeles: SAGE.

WAVE 3 News. (2016, September 12). Papa John 's apologizes for 'extremely insensitive ' promotion. Retrieved October 1, 2016, from

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