|Industry||Food & Beverages|
|Headquarters||Ann Arbor, Michigan, United States|
|Revenues||USD 4.12 Billion, 2020|
|Profit||USD 0.49 Billion, 2021|
|Competitors||Pizza Hut, Starbucks, McDonald’s, Little Caesars|
Headquartered in Michigan, United States, Dominos belongs to the food and beverages sector. It was founded by James Monaghan and Tom Monaghan in 1960. Dominos is considered the largest pizza restaurant chain worldwide due to more than 18,000 stores in more than 90 countries. According to Forbes (2021), it has a market capitalization of $17.76 billion, making it a company with strong brand repute. Today we are performing a SWOT Analysis of the company.
Table of Contents
Domino’s Strengths 2021:
- Global Brand.
Dominos, being a renowned multinational pizza brand, holds a strong brand image not only in the United States but all across the world. According to Forbes (2021), Dominos rank 1756th in the Global 2000 companies owing to its brand image and stable financial position.
Dominios is renowned for bringing updating and innovation in its menu based on the changing customers’ demands. Recently, Dominos added new items to the menu, such as chicken taco pizzas and cheeseburgers. Such a diverse choice of product has attracted a lot of customers; therefore Dominos beat the estimated quarterly revenues of 2021 and its share prices have increased by 12% to $526.29 (Paramasivam, 2021), which is all the time highest.
- Supply Chain Management.
Another key strength of Dominos is its effective supply chain management. Instead of relying on external sources for supply chain activities, Dominios has its own supply chain networks. Dominos is currently operating 21 regional dough production and supply chain centres in the United States, one vegetable processing plan in the US, two thin-crust manufacturing facilities, and five dough production centres in Canada. Moreover, Dominos has received 900 tractors and trailers on the lease (Dominos Pizza Inc, 2020).
- Technological Advancements.
Dominos has adopted technological advancements in its operations by introducing online ordering and delivery services. According to Clifford (2021), more than 75% of orders are placed through digital mediums, and due to COVID-19, this portion has reached 70%. It has also developed a partnership with the autonomous pizza delivery service since 2019 as well as GPS tracking of the orders.
Dominos Weaknesses 2021:
- Lower Income from International Segment.
Dominos has a network of 18,000 stores in more than 90 countries of the world, but it is mainly relying on the income generated from the United States, which holds 94% of the total income. Such over-reliance on one segment can raise serious risks to the company’s future performance, therefore Dominos may need to expand into the international segment.
- Negative Social Media Campaigns.
Dominos faced many negative campaigns on social media, mainly due to the customer’s complaints against the bad services. Its Facebook page was flooded with customers’ bad experiences, as they received the incorrect order. According to McCauley (2017), in New Zealand and Australia, Dominos received complaints, such as uneven pizza slices, missing garlic bread, poor customer services, and order mix-ups. Moreover, in 2019, Dominos was fined £ 10,000 in the United Kingdom, as the metal object was found in one of the customers’ foods (King & Gupwell, 2019).
- Issues in Franchising Model.
Dominos is based on a vast number of franchisees’ models to operate in international markets. Although it allows Dominos to increase its presence, quality control has become a major issue. The franchise owners have full autonomy over the stores, making it difficult for Domino to operate.
Domino’s Opportunities 2021:
- International Expansion.
Dominos has a wide range of opportunities to expand into international markets, other than the United Statements. Domino can open new franchises in other countries to increase its revenue. Currently, Domino is earning 6% of the total sales from an international source, showing that it has a smaller footprint, while its competitor, Pizza Hut, holds a large market share in the international market.
- Market Research.
Domino can perform comprehensive market research to understand the changing market trends and customer preferences, in order to keep up with the customer’s taste. Dominos can add new flavours additives and pizza toppings based on region-specific, which can help Dominos to gain a strong position in the international market.
- Use of Cloud Technology.
Domino can make use of cloud technology to store and retrieve the required data timely for decision making. During the pandemic, the cloud industry has achieved tremendous growth, allowing companies to gain a competitive advantage over others (Mihalec, 2020). Domino will be able to process a vast amount of consumer data on daily basis for marketing purposes, which will ultimately increase the ROI of the business.
- Low Fat Market.
People are now becoming more conscious of their health, which allows Dominos to introduce a health-conscious menu with lower fat for such a huge customer segment. According to Commetric (2019), 41% of the new generation is estimated to pay a premium for sustainably sourced food.
Domino’s Threats 2021:
- Hyper Competition.
Domino’s has a large number of competitors, such as Pizza Hut (YUM) and McDonald’s. Along with offering similar products, these competitors are giving tough competition to the Dominos in terms of profitability, quality, product innovation, marketing, and customer service. Moreover, they are competing agreesively to gain huge market share.
- Compliance Issues.
The Quick-Service Restaurant (QSR) is highly regulated by a variety of regulations, ranging from labor-related laws to environment-related laws. Dominos may face legal challenges in different countries, as they all have a complex structure of laws, including labour standards, tax-related laws, franchising agreements, and so on.
SWOT Analysis of Domino’s Conclusion:
As a whole, Domino is a leading food and beverages brand, currently operating in more than 90 countries of the world. It is considered a global brand with considerable recognition in many countries. It also operates an effective supply chain management in-house to keep a check on the items easily. While Domino has faced various threats, such as legal suits against non-compliance with the specific country’s laws and hyper-competition in the industry. The use of innovation and technological advancements are also the key strengths of the company, allowing them to expand its revenues further. In the pandemic, Dominos has significantly increased its sales in the US due to the online ordering system, but management must look for other international options to expand into the growing market segments.
- Clifford, T., 2021. Domino’s Pizza CEO says phone ordering is near obsolete as digital sales continue to climb. CNBC.
- Commetric, 2019. Fast Food in the Media: The Rise of the Health-Conscious Consumer.
- Dominos Pizza Inc, 2020. Annual Report 2020, Ann Arbor, Michigan: Dominos.
- Forbes, 2021. Domino’s Pizza (DPZ).
- King, L. & Gupwell, K., 2019. Domino’s store fined £10,000 after customer finds metal object in their pizza. Mirror.
- McCauley, D., 2017. Biggest complaints about Domino’s pizza revealed as the fast food giant promises to do better. News.com.au
- Mihalec, M., 2020. Five Reasons More Businesses Are Choosing Cloud. Forbes.
- Paramasivam, P., 2021. Domino’s posts upbeat results as new menu items boost sales. Reuters.