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Case Study: Business Model Of Domino’s Pizza

Pizza…! this 5 letter word brings hunger and water to everyone’s mouth even if you are full. People of every age starting from the kids to old age, everyone loves the taste of pizza and how can we forget dominos when we are talking about it, it is just as pizza without cheese.

Are you feeling tired and not in a mood to cook and you are craving for pizza, just grab your phone and dial dominos, and within 30 minutes you will have pizza in front of you. Isn’t it just magic!

Dominos provides a large variety of pizza to its customers. It aims to be the best pizza delivery operator in the world, offering customers unique and high-quality pizza and also by maintaining the taste and related food products quickly and efficiently through its home delivery service.

BUSINESS MODEL OF DOMINOS PIZZA

It provides all these services for their customers, but now you must be thinking of how it earns money for themselves even after providing a variety of discounts and offers. Well, dominos has an amazing approach and techniques that help it to gain profits.

In this article, we will be discussing-

  • Founding History
  • Customer Segmentation
  • Value Proposition
  • Distribution Channels
  • Customer Relationships
  • Cost Structure
  • Revenue Stream

Business Model Of Dominos Pizza-

1.Founding History-

business model of domino's pizza

Back in the 1960s, Tom Monaghan and his brother James took over the operation of Dominick, an existing location of a small pizza restaurant that existed in Ypsilanti, Michigan.

The brothers paid a USD 500 and further borrowed $900 to pay for the store. The business saw some success in its early years, enabling Monaghan, who took over his brother’s share of the business to open further outlets by 1965.

Monaghan brought the restaurants together under the name Dominos,  basically in relation to the name Dominick brand.

Dominos opened its first franchise location in 1967 and in 1978, the company further expanded to 200 stores and started growing as a brand.

The company opened its first international location in 1983, by opening a store in Winnipeg, Manitoba. Followed by the expansion into the UK and Japan in 1985 and into the Dominican Republic in 1993.

In 1998, after 38 years of ownership, dominos founder Monaghan announced his retirement and sold 93% of the company to the private equity firm bain capital inc for around USD 1 billion.

In 2004 the company listed on the New York Stock Exchange under the ticker symbol DPZ, raising around USD 339 million in its initial public offering.

Dominos pizza thus finally been the largest pizza chain in the world.

2. Customer Segments-

business model of domino's pizza

Dominos Pizza serves a broad and diverse customer base across the globe. Dominos is available in 90 countries and sells barely 3 million pizzas a day. Is it just too amazing!

The company targets customers into different segments-

  • younger customers, these are from the age of 18 to 35 which brings a large amount of business to the company.
  • working professionals, which are the people from the job industry, or families who frequently require food options which are easy with little or even no effort and time-efficient.
  • event organizers, people who set up, and people who are involved in organizing events such as birthday parties.

So basically customers are accordingly segmented by the preferences and taste. This helps the business to earn efficient money.

Dominos Pizza is available across the earth. Its headquarter is in the US, which is the principal market. it also serves the customers of the other 90 countries spanning the Americas, Asia, Europe, the middle east, and Africa.

3. Value Proposition-

business model of domino's pizza

Dominos provides its best to customers in many ways. Whether it is brand reputation, brand building, accessibility, supply chain, etc. there are many platforms in which domino’s is certainly growing its value proposition. Let’s have a look.

  • Brand Building and Reputation-  Dominos Pizza it’s one of the largest and famous food chains which are running all over the globe. If we talk about brand building, then yes dominos is playing a hard role to stabilize and be consistent in its taste. As it offers a variety of food items to its customers and is playing a reputation for offering its customers high-quality products quickly and effectively.
  • Supply Chain-  Dominos Pizza has a vertical supply chain that is integrated from manufacturing to delivery. The supply chain looks over the quality, efficiency, and consistency of the franchise around the world.
  • International Reach-  Dominos Pizza has extensive sales in countries around the world. It is present in almost 90 countries and comprising more than 16,000 outlets in other countries. Thus, dominos have a great and established international reach and it is able to earn much better.
  • Ease and Accessibility- Dominos provides easy ways to order pizza. They provide the company’s number, online, or via the company’s online app by which the customers can order their food sitting in their home. Dominos cares for its customers even sitting far from places.
  • Innovation- Dominos is the one that comes up with their new recipes, new toppings of the pizza, and many more. Dominos provides other food items like tacos, chizza and many others which are so delicious in taste, and mouth-watering. Dominos always cares for its customers and provides the best and tasty food items.

4. Channels-

business model of domino's pizza

 

Dominos Pizza offers its deals and has franchise and outlets opened in approx 90 countries in the world and almost 16,000 franchised restaurants are opened around the globe. This network is spread among the Americas, Asia, Africa, Europe, and the middle east. It comprises of the staff and services who serves the customers directly.

Orders can be placed both online and offline. Customers can have home delivery of delicacies just by dialing a number, yet they can also have the option to come to the restaurant and order their favorite pizza.

Dominos Pizza sales operation is supported by its own manufacturing, distribution, comprising dough production facilities, supply chain centers, and storing facilities.

5. Customer Relationships-

business model of domino's pizza

The company’s principal point is to give quality food and provide the best services to its customers. The company provides restaurants where people can take a hand to hand orders and also provide food delivery which is just a call away. Dominos provide a 30 min food delivery guarantee service for its customers which attracts them the most.

The company also responds to queries and complaints of the customers which they are troubling with and also offer advice on menu items. The company also sees the queries and complaints on the phone.

Dominos Pizza also provides offers and coupons for their regular customers as a means of encouragement and trust between the buyer and seller. By this, the customers can access deals, discounts, and special promotions.

The company also offers a wide range of information on its website www.dominos.com, which includes information regarding stores, menu, etc. Customers can gather any type of information which they have a query of. Additionally, the company communicates with its customers on different social media platforms like Facebook, Instagram, Twitter, and Youtube.

6. Cost Structure-

business model of domino's pizza

Dominos Pizza incurs a cost for its essential services like procurement of ingredients, supplies, for the operation of delivery which includes fuel and maintenance, the operation of manufacturing, and supply infrastructure.  the operations of physical properties which include utility cost. Management of its partnerships, cost of marketing and advertisement campaigns, and the payment of salaries and benefits to its employees.

Dominos Pizza had global retail sales over $14.3 billion in 2019, with over $7 billion in the U.S and nearly $7.3 billion internationally.in the 4th quarter of 2019, dominos have a retail sale of over $4.5 billion, with over $2.2 billion in the  U.S and over $2.3 billion internationally.

7. Revenue Streams-

business model of domino's pizza

Dominos Pizza generates its revenue from the operations of pizza outlets across the U.S and other countries.

The company derives its revenue in the form of sales which is collected from the customers at the point of sales, including its restaurants and its online sales channels, as well as a collection of franchises, royalties, and fees from its franchisees.

Conclusion-

business model of domino's pizza

So, you must be now familiar with what is the business model of dominos pizza and how it serves the best for its customers. wherever you eat, the taste remains the same, that is one of the specialties of dominos pizza and the pizza they offer, you will not get anywhere else.

Dominos Pizza earns a good amount of money. This is the way it earns money even by offering so many services and offers for its customers. Tell us which food item you love the most of dominos, we will love to know!!

 

810 465 Mansha Handa
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