domino's pizza business plan pdf

How Domino’s Pizza Reinvented Itself

by Bill Taylor

I spent the last 18 months researching and writing a book on how organizations and leaders can do extraordinary things, even if they operate in pretty ordinary fields. You don’t have to be a programmer in Silicon Valley or a gene splicer in biotech to unleash exciting innovations and create huge value. Instead, you can rethink what it means to be in the retail-banking business, or the industrial-distribution business, or the office-cleaning business. Yet little did I know that some of the most extraordinary innovations I’ve seen would take place in the pizza business.

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Domino's Pizza: Business Model, SWOT Analysis, and Competitors 2024

Inside This Article

In this blog article, we will delve into the business model, SWOT analysis, and key competitors of Domino's Pizza, a leading player in the global pizza delivery industry. We will explore how Domino's has successfully revolutionized the pizza delivery experience through its innovative business model, leveraging technology and efficient operations. Additionally, we will conduct a comprehensive SWOT analysis to evaluate the company's strengths, weaknesses, opportunities, and threats. Finally, we will identify and analyze the major competitors that Domino's will face in the upcoming year, providing insights into the competitive landscape of the industry.

What You Will Learn:

• Who owns Domino's Pizza and the background of the company's ownership.
• The mission statement of Domino's Pizza and how it shapes their business strategies.
• How Domino's Pizza generates revenue and the key factors that contribute to their financial success.
• An explanation of the Domino's Pizza Business Model Canvas and how it helps the company stay competitive in the market.
• The main competitors of Domino's Pizza and an overview of their market share and strategies.
• A comprehensive SWOT analysis of Domino's Pizza, including their strengths, weaknesses, opportunities, and threats in the industry.

Who owns Domino's Pizza?

The ownership structure of domino's pizza.

Domino's Pizza, one of the world's largest pizza delivery chains, operates under a complex ownership structure. Let's delve into the different entities and individuals that own a stake in this iconic brand.

Founding Family - The Monaghan Family

Domino's Pizza was founded in 1960 by Tom Monaghan and his brother James Monaghan. However, Tom Monaghan eventually became the sole owner of the company. He served as the CEO and majority shareholder until 1998 when he sold a significant stake to Bain Capital, a private equity firm.

Bain Capital - Majority Shareholder

Bain Capital, a global investment firm based in Boston, acquired a 93% stake in Domino's Pizza in 1998. This major investment allowed the company to expand its operations and further establish its presence in the global pizza market. Despite owning a majority share, Bain Capital does not have direct involvement in the day-to-day operations of Domino's Pizza.

Public Shareholders

Following Bain Capital's acquisition, Domino's Pizza made an initial public offering (IPO) in 2004 to provide liquidity to its shareholders. As a result, the company's shares became available for purchase on the New York Stock Exchange (NYSE) under the ticker symbol "DPZ." Today, there are numerous institutional and individual investors who own shares of Domino's Pizza through public trading.

Franchisees - The Backbone of the Brand

A significant portion of Domino's Pizza locations is operated by franchisees. These independent business owners enter into franchise agreements with the company to run their own Domino's Pizza outlets. Franchisees contribute to the overall success of the brand by following the company's operational guidelines and leveraging its well-established brand identity.

The Global Presence

Domino's Pizza has a vast international presence, with operations in over 90 countries. In many cases, the company has entered into joint ventures or partnerships with local businesses or investors to establish its presence in foreign markets. These ventures often involve shared ownership, with Domino's Pizza retaining a significant stake in the partnership.

In conclusion, the ownership structure of Domino's Pizza is multifaceted. While Bain Capital holds a majority stake, the Monaghan family, public shareholders, franchisees, and joint venture partners all contribute to the success and growth of this beloved pizza brand.

What is the mission statement of Domino's Pizza?

Introduction.

The mission statement of a company defines its purpose and the goals it aims to achieve. In the case of Domino's Pizza, their mission statement encompasses their commitment to providing high-quality pizza while emphasizing customer satisfaction and innovation in the food delivery industry.

Domino's Pizza's Mission Statement

Domino's mission statement is "to be the best pizza delivery company in the world." This concise statement encapsulates their primary objective of becoming the leading player in the global pizza delivery market. However, their mission statement goes beyond simply delivering pizzas; it also highlights their dedication to offering an exceptional customer experience and continuously improving their products, services, and operations.

Commitment to Quality and Customer Satisfaction

To fulfill their mission, Domino's Pizza places a strong emphasis on quality and customer satisfaction. They strive to ensure that each pizza is made with the highest quality ingredients, using their proprietary dough and sauce recipes. Domino's also places great importance on the speed and accuracy of their deliveries, aiming to consistently exceed customer expectations and provide a seamless ordering experience.

Innovation and Adaptability

Domino's Pizza recognizes the importance of innovation in the competitive food industry. Their mission statement reflects their commitment to being at the forefront of technological advancements, constantly evolving their ordering systems and delivery methods. By embracing emerging technologies, such as mobile apps, voice assistants, and GPS tracking, Domino's aims to enhance the convenience and efficiency of their delivery services.

Constant Improvement

Domino's understands that maintaining their position as the best pizza delivery company requires continuous improvement. Their mission statement emphasizes their dedication to ongoing innovation, not only in terms of technology but also in product development. Domino's actively seeks customer feedback and uses it to refine their menu offerings and adapt to changing consumer preferences.

Domino's Pizza's mission statement reflects their aspirations to be the leading pizza delivery company globally. By prioritizing quality, customer satisfaction, innovation, and continuous improvement, Domino's aims to provide an exceptional experience to pizza lovers around the world. Their mission statement serves as a guiding principle for their operations, ensuring that they stay focused on their goals and deliver on their promise of being the best in the industry.

How does Domino's Pizza make money?

Pizza sales.

The primary source of revenue for Domino's Pizza is through the sale of its pizzas. With a wide range of pizza options, including classic flavors, specialty pizzas, and customizable options, Domino's caters to a diverse customer base. The company generates revenue by selling pizzas both for dine-in and takeout, as well as through delivery services.

Domino's Pizza has established a strong brand presence and has become synonymous with quick and convenient pizza delivery. This has allowed them to attract a large customer base, resulting in high sales volumes. By consistently providing quality pizzas with fast delivery times, Domino's has been able to maintain a competitive edge in the pizza industry.

Franchise Fees and Royalties

Another significant revenue stream for Domino's Pizza comes from franchise fees and royalties. Domino's operates on a franchise model, allowing individuals to open their own Domino's Pizza stores under the company's brand name. Franchisees pay an initial fee to acquire the rights to operate a Domino's franchise, which contributes to the company's revenue.

In addition to the upfront fee, franchisees also pay ongoing royalties based on a percentage of their sales. This provides a continuous source of income for Domino's Pizza, as franchisees contribute a portion of their revenue to the company. As Domino's continues to expand its franchise network, the number of franchisees paying royalties increases, thereby boosting their overall revenue.

Menu Innovation and Add-Ons

Domino's Pizza continually invests in menu innovation to attract customers and increase sales. They regularly introduce new pizza flavors, crust options, and side dishes to keep their menu fresh and exciting. These menu innovations aim to entice existing customers to try new items and attract new customers who may have different tastes and preferences.

Furthermore, Domino's offers various add-ons and extras that customers can include with their orders, such as drinks, desserts, and sides. These additional items not only increase the average order value but also contribute to the company's revenue. By continually expanding and improving their menu, Domino's Pizza ensures that customers have a wide range of options to choose from, ultimately driving sales.

Digital Platforms and Technology

Domino's Pizza has heavily invested in digital platforms and technology to enhance the customer experience and streamline their operations. The company's online ordering system and mobile app have made it incredibly convenient for customers to place their pizza orders. The user-friendly interfaces, personalized recommendations, and real-time order tracking have significantly contributed to increased sales.

Additionally, Domino's embraces technology in its delivery process. They have implemented GPS tracking systems in their delivery vehicles, allowing customers to monitor the progress of their orders. This transparency and reliability not only improve customer satisfaction but also encourage repeat business.

Moreover, the company has also introduced innovative features like "Domino's AnyWare," which enables customers to place orders via various platforms, including social media, smartwatches, voice assistants, and even car consoles. By embracing technological advancements, Domino's Pizza has gained a competitive edge and further boosted their revenue.

Domino's Pizza Business Model Canvas Explained

The Business Model Canvas is a strategic management tool that helps businesses analyze and visualize their business model. In this blog post, we will explore and explain the different components of Domino's Pizza Business Model Canvas.

Key Partnerships

Domino's Pizza has established key partnerships that are crucial to its success. One of the most important partnerships is with its franchisees. Domino's operates on a franchise model, which allows them to expand rapidly without having to invest heavily in new locations. These franchisees provide the capital, labor, and local expertise needed to run the individual stores.

Additionally, Domino's has partnerships with suppliers to ensure a steady supply of high-quality ingredients. By partnering with suppliers, Domino's can negotiate better prices and maintain consistent quality across its stores.

Key Activities

The key activities of Domino's Pizza revolve around the operation of its pizza delivery business. These activities include:

Food preparation and cooking: Domino's prepares and cooks pizzas and other menu items in its stores. This includes sourcing fresh ingredients, making dough, and ensuring proper food handling and safety measures.

Order taking and processing: Domino's receives orders through various channels, such as phone calls, online platforms, and mobile apps. The company has invested in technology to streamline the order taking and processing process, ensuring efficient and accurate order placement.

Delivery logistics: Domino's has developed sophisticated delivery logistics systems to ensure timely and efficient delivery of pizzas. This includes optimizing routes, managing delivery personnel, and tracking orders in real-time.

Key Resources

Domino's Pizza relies on several key resources to support its business model:

Human resources: Domino's relies on a skilled workforce to operate its stores, prepare and cook pizzas, take orders, and deliver them to customers. The company invests in training and development to ensure the quality and consistency of its services.

Technology infrastructure: Domino's has invested in technology infrastructure to support its online ordering and delivery systems. This includes mobile apps, website platforms, and backend systems to manage orders, track deliveries, and analyze customer data.

Brand reputation: Domino's has built a strong brand reputation over the years, known for its fast and reliable pizza delivery. This brand reputation is a valuable resource that attracts customers and differentiates Domino's from its competitors.

Value Proposition

Domino's Pizza offers several value propositions to its customers:

Convenience: Domino's offers a convenient and hassle-free way to order and receive pizzas. With multiple ordering options and efficient delivery systems, customers can enjoy freshly made pizzas delivered to their doorsteps.

Speed: Domino's is known for its "30 minutes or less" delivery guarantee, emphasizing its commitment to fast and timely service.

Quality and consistency: Domino's focuses on maintaining consistent quality across its stores. Customers can expect the same taste and quality of pizzas regardless of the location.

Customer Segments

Domino's Pizza targets a wide range of customer segments, including:

Busy professionals: Customers who are short on time and prefer the convenience of ordering food for delivery or takeout.

Families: Domino's appeals to families looking for a quick and easy meal option that can satisfy everyone's taste buds.

Students: Domino's often targets students who are looking for affordable and quick meal options.

By analyzing the different components of Domino's Pizza Business Model Canvas, it becomes clear how the company has successfully positioned itself in the highly competitive pizza delivery market. Through key partnerships, efficient key activities, and valuable resources, Domino's continues to deliver on its value propositions and cater to a diverse range of customer segments.

Which companies are the competitors of Domino's Pizza?

Major competitors.

Domino's Pizza faces stiff competition from several major players in the pizza delivery industry. These companies have established a strong presence and continue to challenge Domino's for market share.

Pizza Hut, an American restaurant chain and international franchise, is one of Domino's biggest competitors. With over 18,000 locations worldwide, Pizza Hut offers a wide variety of pizzas, pastas, wings, and other side dishes. Known for its dine-in experience, Pizza Hut has a loyal customer base and a diverse menu that appeals to a broad range of tastes.

Papa John's

Papa John's is another significant competitor in the pizza delivery market. Operating over 5,000 stores globally, Papa John's is known for its emphasis on quality ingredients and its signature garlic sauce. With a focus on customer satisfaction and innovative marketing campaigns, Papa John's has successfully positioned itself as a formidable rival to Domino's.

Little Caesars

Little Caesars, a global pizza chain, is renowned for its affordable and convenient "Hot-N-Ready" pizzas. With over 6,000 locations worldwide, Little Caesars offers customers the option to pick up a hot pizza without having to wait for it to be prepared. This unique business model and competitive pricing make Little Caesars a popular choice for those seeking quick and budget-friendly pizza options.

PizzaExpress

While primarily based in the United Kingdom, PizzaExpress has expanded its reach internationally, making it a significant competitor to Domino's Pizza. Known for its stylish and contemporary restaurants, PizzaExpress offers a diverse menu featuring both classic and innovative pizza options. With a strong focus on quality and customer experience, PizzaExpress continues to attract a loyal following.

Local and Regional Competitors

In addition to these major players, Domino's Pizza also faces competition from a multitude of local and regional pizza chains. These smaller establishments often have a loyal customer base built on their unique recipes, local flavors, and personalized service. While they may not have the same global presence as the major competitors, these local and regional pizza chains can still pose a threat to Domino's in their respective markets.

Overall, Domino's Pizza operates in a highly competitive industry, facing formidable rivals both at a global and local level. The company's ability to innovate, offer competitive pricing, and provide a seamless customer experience will be crucial in maintaining its position as a leader in the pizza delivery market.

Domino's Pizza SWOT Analysis

• Strong brand recognition and global presence: Domino's Pizza is one of the most well-known and recognized pizza delivery brands worldwide. With over 17,000 stores in more than 90 countries, it has established a strong global presence, which gives it an edge over its competitors.
• Efficient delivery system: Domino's has developed a highly efficient delivery system, allowing them to deliver pizzas to customers' doorsteps within a short time frame. This gives the company a competitive advantage, as customers value quick and reliable delivery.
• Technological innovation: Domino's has been at the forefront of technological innovation in the pizza delivery industry. The company's online ordering system, mobile app, and tracking feature have made it easy and convenient for customers to place orders and track their delivery status.
• Diverse menu options: Domino's offers a wide range of menu options, including various crusts, toppings, and side dishes. This allows the company to cater to different customer preferences and dietary restrictions, increasing its customer base.
• Strong franchise network: Domino's operates through both company-owned stores and franchisees. Its franchise network is well-established and robust, enabling the company to expand rapidly and efficiently.
• Quality perception: Despite its global success, Domino's has faced criticism regarding the quality of its pizza. Some customers perceive the taste and ingredients as being of lower quality compared to other pizza chains. This perception could impact customer loyalty and retention.
• Reliance on third-party delivery services: While Domino's has its own delivery system, it also relies on third-party delivery services in certain locations. This dependence on external services may result in potential service inconsistencies and quality control issues.
• Limited menu customization: While Domino's does offer a diverse menu, some customers may desire more customization options. Compared to certain competitors, the company may have limitations in terms of allowing customers to create their own unique pizza combinations.

Opportunities

• Expansion into emerging markets: Domino's has the opportunity to expand its presence in emerging markets where the demand for pizza delivery is growing. By adapting its menu and marketing strategies to suit local preferences, the company can tap into new customer segments and increase its market share.
• Health-conscious menu options: With increasing consumer awareness about health and wellness, Domino's can seize the opportunity to introduce more nutritious menu options. By offering healthier ingredients, gluten-free crusts, or vegan alternatives, the company can attract health-conscious customers and differentiate itself from competitors.
• Delivery partnerships with other businesses: Domino's can explore partnerships with other businesses to expand its delivery services beyond pizza. Collaborations with grocery stores, pharmacies, or convenience stores can create additional revenue streams and increase customer convenience.
• Intense competition: The pizza delivery industry is highly competitive, with numerous established chains and local pizzerias vying for market share. Competitors that offer unique menu options or lower prices could pose a threat to Domino's market position.
• Changing consumer preferences: Consumer preferences are constantly evolving, and there is a growing demand for healthier food options, plant-based alternatives, and ethnic cuisines. If Domino's fails to adapt to these changing preferences, it may lose customers to competitors that cater to these demands.
• Economic downturns: During economic downturns, consumers may cut back on discretionary spending, including ordering delivery food. A decline in consumer purchasing power could impact Domino's sales and profitability.
• Food safety concerns: Any publicized incidents related to food safety issues can significantly damage a restaurant brand's reputation. Domino's needs to maintain strict quality control measures to avoid any potential food safety incidents that could undermine customer trust and loyalty.

Key Takeaways

• Domino's Pizza is owned by a publicly traded company called Domino's Pizza Inc.
• The mission statement of Domino's Pizza is to be the best pizza delivery company in the world.
• Domino's Pizza primarily makes money through the sale of pizza and other food items, both for delivery and carryout.
• The Domino's Pizza business model canvas outlines key aspects such as customer segments, value propositions, channels, customer relationships, revenue streams, key activities, key resources, and key partnerships.
• Competitors of Domino's Pizza include other major pizza chains such as Pizza Hut, Papa John's, and Little Caesars.
• A SWOT analysis of Domino's Pizza reveals its strengths, weaknesses, opportunities, and threats, highlighting factors such as its strong brand, global presence, online ordering system, competition, and potential risks in the industry.

In conclusion, Domino's Pizza is owned by its shareholders, who are individuals and institutional investors. The company's mission statement is to be the best pizza delivery company in the world by exceeding customer expectations. Domino's makes money primarily through the sale of its pizzas and other food items, both through dine-in and delivery services. Their business model canvas is well-defined, with key elements such as customer segments, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure all contributing to their success. However, they face tough competition from companies like Pizza Hut, Papa John's, and Little Caesars. Conducting a SWOT analysis, we can see that Domino's has strengths such as their strong brand, global presence, and efficient delivery system. However, they also face weaknesses such as limited menu options and dependency on delivery services. Opportunities for growth lie in expanding their international presence and introducing new menu items, while threats include changing consumer preferences and intense competition. Overall, Domino's Pizza is a successful and well-established player in the pizza industry, continuously striving to improve and adapt to meet customer needs.

What is the weakness of the Dominos pizza?

While Dominos Pizza is a popular pizza chain, it does have some weaknesses. Here are a few:

Quality perception: Dominos has struggled with a perception of lower quality compared to some of its competitors. In the past, its pizza was criticized for being tasteless and lacking in quality ingredients.

Limited menu: Dominos primarily focuses on pizza offerings and has a relatively limited menu compared to some other pizza chains. This may limit its appeal to customers looking for a wider range of options or variety.

Delivery-centric model: While delivery is a significant strength for Dominos, it also means that customers who prefer dining in or takeout options may not find it as appealing.

Regional preferences: Dominos' standardized menu and recipes may not cater to specific regional tastes and preferences, limiting its appeal in certain areas where local pizza options are preferred.

Competition: The pizza industry is highly competitive, with numerous national and local pizza chains, as well as independent pizzerias. Dominos faces competition from other popular brands such as Pizza Hut, Papa John's, and local competitors, which can impact its market share and growth potential.

What are the strengths of Domino's Pizza?

Some of the strengths of Domino's Pizza include:

Strong brand recognition: Domino's Pizza is a well-established and recognizable brand globally, which gives it a competitive edge in the pizza industry.

Efficient delivery system: Domino's has developed a highly efficient delivery system, including their famous "30 minutes or free" guarantee, which has helped them establish a reputation for quick and reliable delivery.

Diverse menu options: Domino's offers a wide variety of pizzas, including different crusts, toppings, and sauces, catering to a diverse range of customer preferences. They also offer other menu items like pasta, chicken wings, and desserts, enhancing customer satisfaction and loyalty.

Advanced technology integration: Domino's has embraced technology, including online ordering platforms, mobile apps, and advanced tracking systems, which enhances the customer experience and convenience.

Global presence and franchising model: Domino's operates in over 85 countries and has a strong franchise model, allowing them to expand rapidly and tap into different markets worldwide.

Continuous innovation: Domino's has a reputation for continuously introducing new products and innovative marketing strategies. For example, they were one of the first pizza chains to offer online ordering and trackable delivery, which helped them stay ahead of competitors.

Strong customer service: Domino's has focused on improving its customer service over the years, with initiatives like the "Domino's Tracker" and customer feedback systems. This commitment to customer satisfaction contributes to customer loyalty and positive brand perception.

What are the opportunities of Domino's Pizza?

There are several opportunities for Domino's Pizza:

Growing demand for pizza: Pizza is a popular and widely consumed food worldwide, which presents a significant growth opportunity for Domino's Pizza. As more people seek convenient and affordable food options, the demand for pizza delivery and takeout services continues to increase.

Expansion into new markets: Domino's Pizza has the opportunity to expand its operations into new markets, both domestically and internationally. By entering new countries and regions, the company can tap into untapped customer bases and increase its global presence.

Technological advancements: Domino's has embraced technology, allowing customers to order online, through mobile apps, or via voice assistants. The company can further leverage technology to enhance customer experience, such as implementing delivery drones or autonomous vehicles, and exploring new digital platforms for ordering and delivery.

Menu innovation: Domino's can capitalize on new trends and preferences by continuously innovating its menu. By introducing new flavors, ingredients, and dietary options, the company can attract a wider customer base and cater to changing consumer preferences.

Delivery service improvements: Domino's Pizza can focus on improving its delivery service by investing in logistics, streamlining operations, and reducing delivery times. Enhancing the efficiency and speed of delivery can help differentiate the brand and increase customer satisfaction.

Strategic partnerships: The company can explore partnerships with other food and beverage brands or technology companies to enhance its offerings. Collaborations with popular brands or leveraging emerging technologies can provide new avenues for growth and customer engagement.

Expansion into other food categories: While pizza is the core product of Domino's, the company can diversify its offerings by expanding into other food categories. This could include adding new items like salads, sandwiches, or desserts to cater to a wider range of customer preferences.

Focus on sustainability: With growing consumer awareness about sustainability and environmental impact, there is an opportunity for Domino's to prioritize sustainability initiatives. This includes using eco-friendly packaging, sourcing organic and locally produced ingredients, and implementing energy-efficient practices to attract environmentally conscious customers.

What is a threat to Dominos?

There are several potential threats to Domino's Pizza. Some of these include:

Intense competition: Domino's faces competition from other major pizza chains like Pizza Hut, Papa John's, and Little Caesars. The intense competition can lead to a struggle for market share and potentially impact Domino's sales and growth.

Changing consumer preferences: Consumer preferences and eating habits can change over time. If there is a shift towards healthier eating or a decline in demand for fast food, it could impact Domino's sales and profitability.

Delivery service alternatives: The rise of third-party delivery services like Uber Eats, Grubhub, and DoorDash provides customers with alternative options for food delivery. If customers prefer ordering from these platforms rather than directly from Domino's, it can impact the company's delivery business.

Negative publicity or food safety concerns: Any incidents related to food safety or negative publicity can significantly damage a company's reputation and affect consumer confidence. This can lead to a decline in sales and customer loyalty.

Economic downturn: During an economic downturn, people may cut back on discretionary spending, including dining out or ordering delivery. This can impact Domino's sales and profitability.

Rising ingredient and labor costs: Increases in ingredient costs or labor wages can put pressure on Domino's profitability. If the company is unable to pass these costs onto customers through price increases, it can impact its bottom line.

It's important to note that these threats may vary in significance and impact over time, and Domino's management continuously works to address and mitigate them.

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Domino’s pizza: delivering a superior business model.

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MIAMI, FL - APRIL 14: A sign in front of a Domino's Pizza April 14, 2004 in Miami, Florida. ... [+] Domino's Pizza is looking to raise $300 million in the stock market by listing on the New York Stock exchange. The Michigan-based firm already has a London stock market listing for its UK subsidiary. According to media reports, the funds raised may be used to pay off debts. The 44-year-old firm now has 7,400 outlets in more than 50 countries. The firm is reporting that pizza sales are up 5.8% in 2003. (Photo by Joe Raedle/Getty Images)

This company saw large market share gains throughout the pandemic and is positioned for years of more profit growth, but its stock has fallen 30% year to date and is trading at pre-pandemic levels. The company is mischaracterized as a restaurant chain when it is really more of a supply chain operator and consumer marketing firm. Domino’s (DPZ) is this week’s Long Idea.

Domino’s stock presents quality risk/reward given the company’s:

• position as the world’s largest pizza chain
• consistent market share gains
• efficiencies from its integrated delivery system that third parties cannot replicate
• ability to overcome current labor shortages over the long term
• superior profitability to peers
• valuation implies the company’s profits will permanently fall 10% from current levels

Cheapest PEBV Ratio Since 2013

Like many companies that grew sales during the pandemic, Domino’s Pizza’s stock price soared ~50% above pre-pandemic levels. Then, as traders unwound their pandemic trades, the stock has tumbled 30% year-to-date and now trades below its price-to-economic book value (PEBV) ratio (0.9) for just the second time since 2013. See Figure 1.

A PEBV ratio of 0.9 means the stock is priced for profits to immediately fall and permanently stay 10% below 2021 levels, which as I’ll show below, is highly unlikely. For more details about the upside embedded in Domino’s stock price, see the scenarios analyzed using my reverse discounted cash flow (DCF) model in the valuation section.

Figure 1: Stock Price and Economic Book Value per Share: 2013 – Current

DPZ Price to EBV

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Proven International Force

Domino’s has more than 18,800 locations in 90 different markets around the world. Domino’s U.S. and international retail sales have each grown by 10% compounded annually over the past 10 years. Per Figure 2, Domino’s international segment accounted for 51% of its global retail sales in 2021.

Global reach exposes the company to geopolitical risks but a wide geographic dispersal limits exposure to individual countries outside the United States. For example, Domino’s risk from rising tension between China and the international community is limited as just 5% of its international stores are in China.

Figure 2: International and U.S. Retail Sales: 2021

DPZ Sales Mix

Franchise Model Drives Store Count Growth

Domino’s is thought of as a restaurant chain, but the company owns just 2% of its stores. The company generates revenue from franchise royalties and its supply chain operations in the United States. Dominos is more of a supply chain operator and consumer marketing firm than it is a restaurant chain.

This franchise model is beneficial to investors because it enables the company to efficiently manage its capital while having the flexibility to pursue strong growth opportunities. For potential franchisees, the company offers a streamlined operating model, national marketing campaigns, and a cash-on-cash return of investment in three years or less.

Clearly the opportunity is attractive to franchisees globally because the international market has been the main driver of store growth. Per Figure 3, Domino’s grew its store count from 11,629 in 2014 to 18,848 in 2021.

Figure 3: International and U.S. Store Count: 2014 – 2021

DPZ Store Count

Continued growth in the global Quick Service Restaurant (QSR) market will support Domino’s global retail sales growth. Research and Markets expects the global QSR market to grow at a 4.9% CAGR from 2022 – 2027.

Domino’s continues to see opportunities for profitable store growth. The company believes the U.S. market has the potential to grow to 8,000 stores, compared to 6,560 at the end of 2021, and its top 14 international markets could add an additional 10,000 stores, which would nearly double its international store count.

Taking Control from Start to Finish

A key contributor to Domino’s success as a franchisor is the control exerted over its product quality and customer experience, from end-to-end. Here’s how the company maintains that control:

• Supply chain: Supply chain operations provide quality-assured ingredients at competitive costs, freeing time for franchisees to manage other parts of the business. For example, Domino’s delivers mixed dough to stores, saving operators a time-consuming preparation step.
• Franchisee selection: Over 95% of the company’s U.S. franchisees started as drivers or in-store employees. The company requires franchisees to have extensive Domino’s and management experience. By being selective, Domino’s protects its brand with franchisees who understand its business model and culture.
• Delivery: Domino’s operates an efficient delivery system that ensures customers gets a hot, quality product delivered in a timely fashion.

By taking ownership over the entire process, Domino’s eliminates cost inefficiencies and maintains a consistent quality level across its entire business.

Digital Business Enhances Customer Experience and Profitability

Domino’s digital capabilities enrich the customer experience by offering quick and easy ordering options, a rewards program, exclusive digital-only deals, and a voice ordering application. Digital orders create more customer engagement, ensure a more consistent customer experience, and drive higher sales against lower costs. Domino’s carryout tickets that are ordered online are 25% higher than those ordered over the phone, and are less labor-intensive, which is helpful in a tight labor market.

Domino’s digital capabilities paid off when customers relied upon ecommerce channels during the pandemic. Per Figure 4, retail sales generated through Domino’s digital channel rose from 60% of total sales in 2017 to 75% in 2021. For comparison, McDonald’s systemwide sales from digital channels in 2021 were ~25% of systemwide sales in its top 6 markets.

Figure 4: U.S. Digital Retail Sales as a Percent of Total U.S. Retail Sales: 2017 – 2021

DPZ Digital Sales As Of Total

Equipped to Navigate Pandemic Disruption

Domino’s large digital presence, integrated supply chain, robust delivery service, and carry out capabilities made the company ideally situated to strengthen its market position during the COVID-19 pandemic. While weaker competitors struggled to reach customers during the pandemic, Domino’s market share soared from 1.6% of the global quick service restaurant (QSR) market in 2019 to 2.2% in 2021.

Far from being a recent anomaly, Domino’s strong business model was taking market share long before the pandemic. Per Figure 5, Domino’s grew its share of the global QSR market from 1.1% in 2012 to 1.6% in 2019. A strong business model positioned the company to benefit when other businesses were retreating. This is ground won that Domino’s will not likely give back post-pandemic.

Figure 5: Share of Global QSR Market: 2012 – 2021

DPZ Market Share

Industry-Leading Profitability

Domino’s business model not only generates impressive top-line growth, but it also industry-leading invested capital turns and return on invested capital (ROIC). At 59%, Domino’s trailing-twelve-month (TTM) ROIC is 1.6x its closest competitor. See Figure 6.

The company’s high ROIC isn’t just the result of a one-time pandemic boost either. The company’s 5-year average ROIC is actually slightly higher at 60%. Looking at the entire S&P 500 reveals that only four companies have a higher 5-year average ROIC than Domino’s.

Figure 6: Domino’s Profitability Vs. Peers: TTM

DPZ DuPont Analysis

Steady Economic Earnings Growth

Domino’s continues to create shareholder value as it expands its business. The company has generated positive economic earnings every year since going public in 2004. More recently, Domino’s economic earnings grew from $151 million in 2011 to $627 million in 2021.

Figure 7: Economic Earnings Since 2011

DPZ Economic Earnings

Healthier Eating Is Not a Big Risk

The company’s operation is specifically configured to the mass production of quality pizza, which limits direct competition from most other QSRs. However, such dependence on one product means the company’s success is also tied to the popularity of pizza.

The rise of health consciousness poses a threat to the industry that serves loads of highly caloric carbs, fats, and processed meats. A change in dietary habits toward healthier options could pose a long-term headwind for the industry and its largest supplier. However, this threat is not likely to keep the pizza market from growing. Despite an ever-increasing array of diet and healthy eating options, the American QSR pizza market grew from $35.9 billion in 2016 to $40.6 billion in 2021.

Furthermore, Domino’s experience with innovation means that it can offer better-for-you options, such as gluten-free crust, should consumer preferences shift away from traditionally made pizza.

Rising Costs Could Hurt Margins But Drive More Market Share Gains

Management noted in its 4Q21 earnings call that it expects Domino’s U.S. stores to see up to a 10% increase in its food supply costs. These rising costs will have an immediate impact on stores’ profitability. The company will also feel the negative effects of rising costs as a decline in store profitability will have a “trickle-up” effect on the franchisor. Stores may be forced to promote higher margin items to offset the impact of rising costs, reduce operating hours, or less aggressively acquire staff members which could lead to lower retail sales.

Staffing shortages which will likely continue to be a headwind to store count growth and running sales promotions. The company is more cautious about offering promotions that drive more traffic amidst the present challenges. Stores may not be able to keep up with more business while maintaining quality standards, and Domino’s is hesitant to actively acquire more customers, who may have a less than ideal experience with understaffed stores.

However, all other QSR operators face these same challenges. Domino’s extensive store network, supply chain efficiencies and best-in-class ROIC provide it with strong advantages that will likely drive more market share gains as they did during COVID.

Delivery Service: Long-Term Advantage but Short-Term Problem

The current labor shortage is directly impacting Domino’s ability to execute operations that are heavily dependent on delivery service. A lack of delivery drivers has led some stores to reduce operating hours as the company struggles to provide the delivery capacity to meet demand. The company is leaning on its digital channel and carryout business to assist with navigating these challenges by offering more incentives.

Over the long term, Domino’s delivery capabilities are a major competitive advantage for the company, which I expect will continue to drive more growth, despite current capacity constraints.

Uber Eats and Door Dash Reduce Domino’s Delivery Advantage

I have long argued that third-party delivery services such as Uber Eats (UBER) and DoorDash (DASH) operate broken business models that will fail in the long run, but they still pose a threat to Domino’s in the short-term. DoorDash’s rapid market share gains in the U.S. food delivery market have slowed Domino’s ability to acquire new customers.

The third-party food delivery market has grown remarkably over the past two years. However, leading names in the market - such as DoorDash – achieved their growth unprofitably, which means those market share gains are not sustainable. Eventually, third-party delivery services will need to either increase fees or exit the market. Either way, Domino’s integrated delivery service will be ready to take back lost market share.

Domino’s also offers more ways to fulfill customer orders beyond traditional at-home delivery. Domino’s Pizza’s contactless pickup, which guarantees orders will be placed in the vehicle within two minutes of arrival, and delivery hotspots, offer customers the convenience of multiple fulfillment options.

Over the long term, Domino’s is looking to create autonomous delivery solutions. The company’s partnership with Nuro enabled it to test autonomous pizza delivery vehicles in Houston in 2021. These automated delivery systems would make Domino’s highly efficient business model even more efficient.

DPZ Has 83% Upside If Consensus Is Correct

Domino’s stock is priced for profits to fall from current levels despite its history of growth, superior profitability, industry-leading market share, and numerous growth opportunities. Below I use my reverse discounted cash flow (DCF) model to analyze two future cash flow scenarios to highlight the upside in Domino’s current stock price.

DCF Scenario 1: to Justify the Current Stock Price of $390/share.

If I assume Domino’s:

• NOPAT margin falls to 13% (10-year average vs. 15% in 2021) in 2022 through 2031 and
• revenue grows at just a 1% CAGR (vs. 2022 – 2024 consensus estimate CAGR of 7%) from 2022 – 2031, then

the stock is worth $390/share today – equal to the current stock price. In this scenario , Domino’s earns $610 million in NOPAT in 2031, which is 8% below 2021.

DCF Scenario 2: Shares Are Worth $712+.

• NOPAT margin falls to 14.6% (five-year average) from 2022 through 2031, and
• revenue grows at consensus estimates of 7% in 2022, 8% in 2023, and 7% in 2024, and
• revenue grows at a 3.5% CAGR from 2025 – 2031 (below its 10-year revenue CAGR of 10% from 2011 – 2021), then

the stock is worth $712/share today – an 83% upside to the current price. In this scenario, Domino’s NOPAT grows just 4% compounded annually for the next decade, less than one-third of the company’s 15% NOPAT CAGR from 2011 – 2021, and below Research and Markets’ estimated 4.9% CAGR of the global QSR market from 2022 – 2027. Should Domino’s NOPAT grow in line with historical growth rates or even the global QSR market expectations, the stock has even more upside.

Figure 8 compares Domino’s historical NOPAT to its implied NOPAT in each of the above DCF scenarios.

Figure 8: Domino’s Historical and Implied NOPAT: DCF Valuation Scenarios

DPZ Valuation Scenarios

Sustainable Competitive Advantages Will Drive Shareholder Value Creation

I think the moat around Domino’s business will enable it to continue to generate higher NOPAT than the current market valuation implies. Factors building Domino’s moat include:

• strong brand awareness
• large digital business that increases revenue and decreases labor costs
• superior supply chain efficiency
• integrated delivery service that third party providers cannot replicate
• superior profitability

What Noise Traders Miss With Domino’s

These days, fewer investors focus on finding quality capital allocators with shareholder friendly corporate governance. Instead, due to the proliferation of noise traders, the focus is on short-term technical trading trends while more reliable fundamental research is overlooked. Here’s a quick summary of what noise traders are missing:

• Domino’s is better positioned to manage the labor shortage
• Research and Markets expects the global QSR market to grow at a 4.9% CAGR through 2027
• valuation implies 83% upside if the company grows at consensus estimates

Earnings Beats or Alleviation of Labor Constraints Would Be Welcome News

According to Zacks, Domino’s has beat earnings estimates in eight of the past 12 quarters. Doing so again could send shares higher.

Should Domino’s manage the challenging labor environment better than expected, revenue and profits could soar and send its stock price with them.

Dividends and Share Repurchases Could Provide 6.0% Yield

Domino’s has increased its quarterly dividend in every year since 2012. Since 2017, Domino’s has paid $544 million (4% of current market cap) in cumulative dividends. The firm’s current dividend, when annualized, provides a 1.1% yield.

Domino’s also returns capital to shareholders through share repurchases. From 2017 to 2021, the firm repurchased $4.0 billion (28% of current market cap) worth of stock. The firm has $704 million remaining on its current repurchase authorization. If the company uses its remaining repurchase authorization in 2022, the buybacks will provide an annual yield of 4.9% at its current market cap.

Executive Compensation Plan Needs Improvement

No matter the macro environment, investors should look for companies with executive compensation plans that directly align executives’ interests with shareholders’ interests. Quality corporate governance holds executives accountable to shareholders by incentivizing them to allocate capital prudently.

Domino’s compensates executives with salaries, cash bonuses, and long-term equity awards. Domino’s performance stock units (PSUs) are tied to adjusted total segment income and its global retail sales targets.

Instead of adjusted total segment income or global retail sales, I recommend tying executive compensation to ROIC, which evaluates a company’s true return on the total amount of capital invested and ensures that executives’ interests are aligned with those of shareholders. There is a strong correlation between improving ROIC and increasing shareholder value.

Despite room for improvement in compensation structure, Domino’s executives have delivered shareholder value. Domino’s has grown economic earnings from $270 million in 2016 to $627 million in 2021.

Insider Trading and Short Interest Trends

Over the past 12 months, insiders have bought 14 thousand shares and sold 133 thousand shares for a net effect of ~118 thousand shares sold. These sales represent less than 1% of shares outstanding.

There are currently 2 million shares sold short, which equates to 6% of shares outstanding and just over four days to cover. Short interest increased 20% from the prior month.

Critical Details Found in Financial Filings by My Firm’s Robo-Analyst Technology

Below are specifics on the adjustments I make based on Robo-Analyst findings in Domino’s 10-K:

Income Statement: I made $258 million of adjustments, with a net effect of removing $150 million in non-operating expenses (3% of revenue).

Balance Sheet: I made $187 million of adjustments to calculate invested capital with a net increase of $41 million. One of the largest adjustments was $35 million in operating leases. This adjustment represented 7% of reported net assets.

Valuation: I made $5.6 billion of adjustments to shareholder value for a net effect of decreasing shareholder value by $5.6 billion. Apart from total debt, one of the most notable adjustments to shareholder value was $108 million in outstanding employee stock options (ESO). This adjustment represents <1% of Domino’s market cap.

Attractive Fund That Holds DPZ

The following fund receives an attractive rating and allocates significantly to DPZ:

• O’Shaughnessy Market Leaders Value Fund (OFVIX) – 2.2% allocation

Disclosure: David Trainer, Kyle Guske II, and Matt Shuler receive no compensation to write about any specific stock, style, or theme.

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Domino's Marketing Strategy: How it is Dominating the Pizza Delivery Industry

Learn about domino's iconic marketing strategy and advertising campaigns. read how domino's aces the 4ps of marketing mix - product, price, promotion & placement..

• overview#goto" data-overview-topic-param="a-slice-of-domino-s-history">A Slice of Domino's History
• overview#goto" data-overview-topic-param="target-audience">Target Audience
• overview#goto" data-overview-topic-param="marketing-mix">Marketing Mix
• overview#goto" data-overview-topic-param="domino-s-marketing-strategies">Domino's Marketing Strategies
• overview#goto" data-overview-topic-param="domino-s-marketing-masterpiece">Domino's Marketing Masterpiece
• overview#goto" data-overview-topic-param="maximize-your-marketing-potential">Maximize Your Marketing Potential

Domino's is a mainstay of the global food delivery industry thanks to its delectable pizzas and lightning-fast delivery. With a core customer base predominantly from the US, followed by India and Malaysia, Domino's 2021 revenue reached 4.36 billion USD.

Behind the brand's phenomenal success is a well-thought-out marketing strategy that has set the company apart from its top competitors (Papa John's and Pizza Hut) and propelled it to the top of the industry making it the largest pizza chain in the world.

In the following article, we will delve into the key components of Domino's marketing strategy, exploring the creative marketing strategies that have allowed the company to thrive in a highly competitive landscape.

A Slice of Domino's History

In 1960, Tom and James Monaghan started Domino's in Ypsilanti, Michigan with a goal to revolutionize the pizza industry by delivering hot pizzas to customers' doors. Little did they know their small venture would become a worldwide success.

Source: Domino's

As the years passed, Domino's widened its scope and expanded into new markets. By the end of the 1970s, there were 200 stores nationwide, and by the turn of the century, the brand had firmly established itself on the international stage.

In the 2000s, the company underwent a modernization drive that resulted in the introduction of new menu selections as well as the creation of a cutting-edge website and mobile application that made ordering Domino's pizza easier and more convenient than before.

Today, with over 17,000 stores in over 90 countries, Domino's stands tall as one of the largest pizza chains in the world. With a steadfast commitment to quality and convenience, the brand continues to provide customers with the opportunity to enjoy their favorite dominos pizza and accompaniments.

The Dominos logo, which is a stylized representation of a domino tile with three dots, is more than just a decorative element.

The three dots in the company logo represent the first three Domino's locations in Ypsilanti, Michigan, and serve as a reminder of the company's origins. Pizza lovers all over the world may recognize the company name and emblem because of the vibrant blue letters and white background that they create.

Source: 1000 Logos

Target Audience

Domino's Pizza caters to diverse age groups including families, young adults, and busy professionals looking for a quick, convenient, and affordable meal. The focus of the fast food chain on delivery and technology appeals to people who value convenience and speed.

Furthermore, the company's menu caters to both meat eaters and vegetarians, with veg pizza and non-veg pizza which helps to attract a broader range of customers through franchise owners.

Marketing Mix

Domino's success is largely due to its well-planned marketing mix, resulting from thorough market analysis. Let's examine how the four Ps of Dominos marketing strategy contribute to its success.

Product Mix

The well-known pizza restaurant Domino's provides a wide range of menu options to accommodate the diverse tastes of its patrons including veg pizza and non-veg pizza. Dominos Pizzas, which are their specialty, are available in classic flavors which can be topped with different toppings.

Source: Domino's India

In addition to their well-known breadsticks, pizza burger, and salads, they provide a wide range of sides to go with their veg and non-veg pizzas. Domino's offers a selection of drinks, such as lemonade and soft drinks, as well as delectable desserts to satisfy its customers' desires for sweets.

Domino's masterful pricing strategy offers a tantalizing blend of affordability and excellence. Pizzas, the cornerstone of their menu, start at $5 for a medium size with toppings options. Accompaniments like breadsticks and salads begin at $3, while delectable desserts can be yours for as little as $2.

To further enhance the value proposition for its customers, Domino's routinely offers enticing specials and combo packages, allowing customers to try a range of menu items at a lower price. This pricing marketing strategy of Dominos helps it attract customers of all budgets.

Distribution

In 1967, Domino's opened its first franchise, laying the framework for the company's expansion into international markets. Today, the company operates more than 19500 locations worldwide, including 6619 in the US and 1,567 in India under Jubilant Food Works.

Company-Owned Stores

At the forefront of Domino's Distribution strategy are its company-owned stores, which offer customers a wide range of options for enjoying its menu offerings. Dine-in, carry-out, or delivery, the choice is theirs.

Using a vertically integrated supply chain, the company has established itself as a top-tier pizza supplier and is better able to compete in the market by successfully coordinating its resources and controlling the cost structure.

Franchise Stores

In addition to company-owned stores, Domino's also operates a large number of franchise stores. Domino's focus on a franchisee-owned business model and low-cost infrastructure investment aims at serving amazing food fast to people on move. This marketing strategy has helped Dominos to enter new markets while still being major cost component making it viable in developing nations where there is low capita income.

E-commerce Platform and Delivery Services

For those who prefer the comfort of their own homes, Domino's offers a user-friendly online ordering platform that can be accessed through a website or their own app, providing customers the ability to place orders whenever they want, from anywhere.

Domino's leverages technology for fast and efficient delivery, with real-time updates and GPS tracking. In 2014, they introduced Carside Delivery in the US.

Global Presence

Additionally, Domino's has a substantial international footprint. With the US as its main market, it operates in more than 90 countries allowing clients to relish its products anywhere in the world.

In several of its international regions and developing nations, Domino's has embraced a localization approach and offers menu items that are tailored to regional tastes and preferences. To cater to Indian pizza lovers Dominos replaced pepperoni beef-based topping with spicy chicken sausage topping.

The business's digital ordering system enables several payment methods and is available in multiple languages, making it simple for customers to place purchases.

Partnerships

By forming smart alliances directly with foreign delivery businesses, Domino's has been able to reach a wider clientele. Domino's partnerships include Lipton, Mountain Dew, 7Up, ITC, PepsiCo, etc.

Promotion Mix

Domino's stands out with innovative advertising and promotions, interacting with customers and staying ahead of trends. Let's examine their use of the elements of the promotion marketing mix and some of their top digital marketing strategies:

Advertising

Domino's advertising strikes a balance between consistency and impact, evoking a sense of togetherness. Their "Oh Yes We Did" campaign showcased new menu items like pizza recipe, desserts, and sides, while the "You Got 30 Minutes" commercial guaranteed 30-minute delivery or the pizza was free.

Domino's also uses billboard ads, such as the 2011 real-time consumer feedback billboard in Times Square, showing positive, neutral, and negative comments..

Source: Food Channel

Social media Marketing Strategy

Domino's uses the social media platforms Facebook, Instagram, and Twitter to keep their customers informed about sales and new goods. KFC posts pictures of their meals on social media and engage with the public by using popular hashtags.

Sales Promotion

To attract customers Domino's offers a wide range of momentary discounts and specials. Additionally, they offer extra promotions throughout specific times and events.

Public Relations

Domino's uses PR strategies like "Dominos Cares" and "Domino's Carside Delivery," which offer contactless delivery options, to build strong relationships with customers and enhance brand perception .

Email Marketing and SMS Marketing Strategy

To reach customers and foster brand loyalty, Domino's uses targeted internet advertisements and direct marketing methods like email marketing, SMS Marketing, and direct mail with a call-to-action buttons. They use consumer data to provide customers with personalized offers based on their past purchases.

Domino's partners with sports leagues, music festivals, and events to attract customers and raise brand awareness. In 2001, they teamed up with the Make-A-Wish Foundation for a two-year partnership. They also collaborated with the Spanish esports organization Liga De Videojuegos Profesional (LVP).

Source: LVP

Domino was RCB's official partner for the entire IPL season in 2018.

Source: Facebook

SEO and Search Engine marketing

To boost its brand's presence on search engines, Dominos pizza uses both organic and paid searches. Domino's paid search includes Google ads, sponsored Facebook ads, and YouTube advertisements to target their audience based on their location and age group.

In the restaurant sector, according to Semrush traffic figures for December 2022, Dominos.com came in third with 54 million visitors, an average session time of 10:51, and a bounce rate of 31.64%.

Source: Semrush

17% of visitors to Domino.com use a desktop computer, while 80% use a mobile device. There were 25.7 million organic visits and 1 million paid visits to the Domino website in December.

Domino's Marketing Strategies that Made a Difference

With a history of game-changing campaigns, and creative adverts, Domino's has risen to become one of the world's largest pizza chains. Let's take a closer look at other best marketing strategies that have made a difference, and put Domino's on the map as a global brand.

Digital Platforms

Domino's has taken the lead in using technology to enhance customer satisfaction by embracing digitalization. Customers can easily and quickly place orders with the use of the company's mobile apps, delivery tracking, and ordering online capabilities.

Domino's Pizza has integrated cutting-edge technology into their ordering system with the introduction of their "Domino's Voice Search" feature. This allows customers to effortlessly place their pizza orders via voice commands through the use of either the Domino's mobile application or Amazon Alexa/Google Assistant enabled devices.

Client-Centered Methodology

Client satisfaction forms the most of the Dominos marketing strategy. As Domino's has always prioritized its customers' needs and wishes and placed a high priority on doing so. The company continuously solicits customer feedback and uses it to improve both its services and the overall customer experience .

Value Proposition

Domino's has developed a strong value proposition based on its track record for timely and reliable delivery. The company's motto, "You Got 30 Minutes," has come to signify that hot, fresh pizza will be delivered within 30 minutes of receiving an order. This plays a main role in Domino's having a high market share compared to other pizza outlets like Pizza Hut, and Papa John's.

Diverse Menus

For its customers' benefit, Domino's appeals its customer base with Dominos veg menu and non-veg menu and it frequently introduces brand-new menu items and technological innovations. This has helped Dominos to keep the brand fresh and relevant while bringing in new customers.

AI-based chatbots

An excellent illustration of Domino's dedication to innovation is the use of AI-powered chatbots for customer service. These chatbots are available 24/7 and can handle a variety of consumer inquiries, providing prompt and efficient replies.

Design for an immersive pizza theatre

For its locations, Domino's has adopted an innovative "Pizza Theater" design that incorporates technology and interactive components to provide customers a fully immersive experience. This design strategy sets Domino's unique and exemplifies the company's dedication to innovation and technology, from digital menu boards to open kitchens.

Source: Crain's Detroit

Domino's Marketing Masterpiece: A Look at its Game-Changing Ad Campaigns

Ad campaigns are the heart and soul of any marketing strategy, and Domino's has been delivering on this front for decades. From its iconic "30 minutes or less" promise to its more recent forays into digital marketing, Domino's has consistently raised the bar for pizza chains around the world.

With a focus on creative storytelling, customer engagement, and memorable slogans, Domino's ad campaigns have played a crucial role in shaping the brand's image and driving sales. Let's look at some of Domino's most memorable and game-changing ad campaigns:

Domino's Fashion Week Debut

In the midst of the bustling festivities during London Fashion Week of 2019, one unlikely brand made its mark on the fashion world - Domino's. With a unique collaboration with designer Liam Hodges, the pizza chain crafted a comfort-driven collection, dubbed "Night In," inspired by the growing trend of staying in rather than going out.

The collection, consisting of the "Controller Coat," a stylish cape with pockets for holding essentials like tv remote, and gaming controller; the "Gaming Bag," a cozy sleeping bag suit; and the "Boxset Blanket," a three-person blanket for TV bingeing, was designed to elevate "nights in" to be more memorable. The campaign generated buzz on social media, amplified by a competition that offered users the chance to win one of the three highly coveted designs.

Source: Fads magazine

The Last Slice

In 2022, as the globe celebrated International Friendship Day, Domino's India began a moving social experiment to show the impact of just one slice of pizza. Schbang, who conceptualized and carried out the #Thelastslice campaign, brought complete strangers together for a humorous experiment that fostered new friendships.

Source: Schbang

Three pairs, consisting of creators and influencers, were given only the last slice of a pizza and with each bite, conversations started flowing and bonds were formed. The last piece served as the ideal icebreaker, showing us all that even the tiniest things can draw people together. A new bond was formed as the last bite was taken.

Who says you need an entire pizza to have a meaningful connection?

Domino's Puts Local Marketing on the Map

As a global giant, Domino's knows the importance of forging a personal connection with consumers on a local level. In 2018, the brand set out to tackle a common pain point for drivers and pizza lovers alike - potholes. With its ' Paving for Pizza ' campaign, Domino's invited customers to nominate their town for a paving grant, ensuring their pizzas would make it home in one piece.

Source: Paving For Pizza

This lighthearted take on a serious subject not only generated discussion and interaction on social media, but it also showed Domino's dedication to having a positive effect on neighborhood communities.

The campaign garnered an astounding 35,000 organic mentions on social media in just its first week. Domino's increased the budget after seeing how well it worked to cover all 50 states , demonstrating that even the most powerful businesses can create meaningful change, one pothole at a time.

Tweets for Treats

In March 2012, Domino's UK introduced the "Tweets For Treats" Twitter promotion to boost lunchtime orders. By offering a discount for each tweet that included the hashtag #letsdolunch, they amassed 825 tweets and reduced the price of the Pepperoni Passion pizza from £15.99 to £7.74.

With 13% of digital purchases made on mobile devices, the campaign increased online pizza sales by 43% and overall revenues by 14.6% to £43.6 million . It was a successful marketing strategy of Dominos that raised brand awareness and gained more fans and followers.

Source: Skipedia

Maximize Your Marketing Potential with Lessons from Dominos Marketing strategy

Marketing strategies can often be dry and uninspiring, but Domino's innovative approach to the industry serves as a lesson in creativity and customer-centricity. Here are six key takeaways from marketing strategy of Dominos that marketers can learn:

Convenience is King

Domino's places a strong focus on the importance of simplifying customers' lives through a steadfast commitment to delivery and user-friendly digital ordering.

Inventive Methods

The customer experience is improved by Domino by integrating technology into its daily operations, such as AI-powered chatbots and GPS tracking. This also increases operational transparency.

Putting customers first

By prioritizing client feedback, Domino's illustrates how a customer-centric marketing strategy is necessary for success in any industry.

A Strong Brand Identity

Domino's has expertly crafted their brand to stand out in consumers' minds, in such a way that elements such as their iconic logo and memorable jingles contribute to their distinctive image.

Global Growth with Regional Accents

Domino's exemplifies the importance of maintaining a strong brand identity when entering new markets by adjusting to regional tastes and cultural norms.

Unwavering Concentration on Quality

With a vertically integrated supply chain Domino maintains its position as a market leader in the pizza sector by consistently enhancing the flavor of their goods, demonstrating that quality should always come first.

The success of Domino's in the intensely competitive fast-food industry has been significantly attributed to the marketing strategy of Dominos. By conducting a thorough market analysis, Domino's has been able to secure a significant market share, outpacing its competitors like Pizza Hut, and drive sustainable growth through innovative and data-driven marketing strategies. How Domino's retains innovation and its competitive edge with its marketing strategy as the food market matures will be an intriguing thing to watch.

If Domino's Case Study intrigued you check out McDonald's marketing strategy for further details on the fast food industry.

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OUR PURPOSE & VALUES

Domino’s is a purpose-inspired and performance-driven company with exceptional people who are committed to feeding the power of possible, one pizza at a time. At the heart of our brand is a set of values that define our core beliefs on how we run our business, treat our people, support our franchisees and serve our customers:

Do The Right Thing

We act with integrity and make disciplined decisions, even when it’s difficult or unpopular. High ethical standards and uncommon honesty are at the heart of how we work together. We are committed to safely and responsibly serving our customers, and giving back in the communities where we live and work.

Put People First

We create an inclusive culture, knowing our people are core to our success. We treat each other with dignity, respect, and we value the differences each team member brings. We strive to be a company where all team members can bring their full selves to work and know that they belong, contribute and reach their potential.

Create Inspired Solutions

We are a company built on entrepreneurship and innovation. We become better every day by having the humility and courage to embrace and lead change. Together, we unlock our collective potential to be bold, think big. We have a bias for action – to solve customer needs in new and relevant ways.

Champion Our Customers

We deliver on our promises, treating each order and interaction as an opportunity to deepen relations by delivering great product, service, and experiences. We hold ourselves accountable, and if we don’t deliver on a promise, we’ll make it right.

Grow And Win Together

We are not playing a finite game. We are committed to building an enduring brand that outlives any of our individual contributions. We will grow together, deliver exceptional results together, celebrate wins together, have fun together and leave the brand in a better place for those who come after.

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Franchise Business Plan – Domino’s Pizza

Domino’s Inc. is the second-largest pizza company in the world based on the number of units and retail sales. The company sells over 1.5 million pizzas globally each day. Founded in 1963, Domino’s currently has over 13,000 company-owned and franchised locations worldwide. The company operates in all 50 of the United States and has locations in more than 70 other countries. Domino’s earned $6.1 billion in the United States sales in 2018.

Initial Investment

The total estimated initial investment of starting a Domino’s franchise business ranges from $99,950 to $561,000. The initial investment includes a wide range of expenses such as the initial fee, furniture and equipment, inventory and supplies, advertising, training, and insurance expenses. Joorney Business Plans has extensive experience in developing long-term financial projections for Domino’s restaurants.

The franchisor approves the restaurant location. The franchisees will not receive an exclusive territory, except in the case of a traditional store franchise agreement where the area of primary responsibility is assigned. The area of primary responsibility is approximately a 1-mile radius around the store, a 1-mile radius from a street intersection, or a written description equivalent to a 1-mile radius. In densely populated areas the assigned area of primary responsibility is a ½ mile radius. Domino’s will not operate or grant a franchise for a restaurant whose area of primary responsibility overlaps the area of primary responsibility. Joorney Business Plan Writers develop in-depth competition and market analyses helping franchisees estimate their growth potential and operating expenses in a specific territory.

Domino’s provides training for specific franchise employees . The franchisor has the right to charge a training fee for these training programs or classes. The franchisee will be responsible for the travel, living expenses, and any other costs incurred during these training programs and classes. The franchise holder is responsible for training the employees to legally, safely, and properly perform duties, to follow appropriate procedures for their own safety and the well-being of the public. Joorney Business Plans develops detailed personnel plans and links the proposed employees’ training to their designated roles.

Advertising

Domino’s is continually working on innovative traditional and online advertising strategies. The company invests in technological innovation, especially digital ordering services, such as the one that allows customers to order using pizza emojis in a text message. Other marketing efforts include extensive advertising through television, web-based promotions, radio and print, targeted mailings, and affiliations with brands such as Coca-Cola.

The franchisee is expected to participate in all national, local, and regional advertising and promotions and pay 4% of the weekly royalty sales of the restaurant to the advertising fund. Joorney Business Plan Writers help in writing advertising and marketing strategies and developing budgets in line with the franchise agreement.

The main benefit of starting a Domino’s franchise is that it is one of the most recognized names in the pizza industry. Another distinct benefit of Domino’s is that it mostly focuses on carry-out and delivery, which makes day-to-day operations easier and simpler. In addition, the company has an established market of customers and a proven system of profitability.

Contact us today to develop a personal franchise plan that works for you.

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