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This study aims at developing a comprehensive strategic plan for the leisure enterprises Domino’s Pizza UK. There are four major parts throughout this study: the first part of the plan would be provide a review about the background of Domino’s Pizza UK; the second part of the plan is to perform a comprehensive strategic situational analysis in term of macro and micro environmental check; the third part of the plan would be to establish the strategic formulation in term of competitive positioning, growth strategy, resource based view and strategic methods selection; the last major part of the plan will focus on offering guideline on the strategic implementation such as marketing strategy, action plan and budgeting (in Gantt chart), analysis of the change management issues followed by a concluding remark.
List of figures, charts and tables
Figure 1 United Kingdom GDP Annual Growth Rate 8
Figure 2 United Kingdom Interest Rate Source: Tradingeconomics.com 2011 9
Figure 3 Porter (1979)’s Five Forces framework 11
Figure 4 The power/interest matrix Source: Themanager.org 2011 15
Figure 5 Porter (1980)’s Generic Strategies 17
Figure 6 Ansoff (1957)’s product-market growth matrix 19
Figure 7 Resources and competitive advantage 20
Table 1 Marketing actions and budget Gantt chart for 2012 23
Chart 1Pound sterling (GBP) exchange rate against Euro Source: Ecb.int 2011 8
Table of Contents
Executive summary 1
List of figures, charts and tables 2
Table of Contents 3
Strategic plan for Domino’s Pizza UK 5
1. Introduction 5
1.1 Company background 5
1.2 The Domino’s Franchise Story in UK 5
1.3 Product details 6
2. Objectives of this report 6
3. Strategic situational analysis 7
3.1 Macro environment check – PESTEL analysis 7
3.1.1 Political and legal analysis 7
3.1.1 Economic analysis 8
3.1.2 Social analysis 9
3.1.3 Technological analysis 9
3.1.4 Environmental analysis 10
3.1.5 Summary of the PESTEL analysis 10
3.2 Micro environment check 11
3.3 Industrial analysis – Michael E. Porter (1979)’s Five Forces Analysis 11
184.108.40.206 The risk of entry by potential competitors – High level 11
220.127.116.11 Rivalry among established firms – High level 12
18.104.22.168 The bargaining power of customers – Medium 13
22.214.171.124 The bargaining power of the suppliers – Medium 13
126.96.36.199 The threat of substitutes – Low to Moderate 14
3.3.2 Stakeholder analysis 14
3.3.3 Vision and Mission statement 16
3.3.4 Organizational culture – Teamwork orientation 16
3.3.5 Strategic orientations 17
4. Strategic formulation 17
4.1 Competitive positioning using Porter (1980)’s Generic Strategies 17
4.1.1 Competitive advantage – Relatively higher cost and differentiation 18
4.1.2 Competitive scope – Broad 18
4.2 Growth strategies – Ansoff (1957)’s matrix 19
4.3 Resource based view: resources and competitive advantage 20
4.4 Financial management 21
4.5 Strategic methods 22
5. Strategic implementation 23
5.1 Marketing strategy implementation: Action plan and budgeting (in Gantt chart) 23
5.2 Analysis of the change management issues 23
6. Concluding remarks 24
Appendix 1.0 Financial performance of Domino’s Pizza UK 26
Appendix 2.0 Summary of industrial analysis using five forces model 27
Appendix 3.0 Macro Environmental Analysis 28
List of References 29
Strategic plan for Domino’s Pizza UK
1.1 Company background
Founded in 1960, through half a century’s development Domino’s Pizza has established itself as one of the most recognized world leaders in pizza delivery by operating a network of company-owned and franchise-owned stores in the United States and international markets (Pradhan 2007, p.402). The first UK store was opened in 1985 while the first Irish store opened in later in 1991. As of February this year, there are over 660 Domino’s Pizza stores in a growing number of towns and cities throughout England, Scotland, Wales and Ireland (Dominos.uk.com 2011).
1.2 The Domino’s Franchise Story in UK
Besides a dedication to the outstanding product, service, image and safety, the founder Tom Monaghan also encouraged all Domino does Pizza franchisees to foster positive relationships with the communities they serve, delivering local people something more than just great taste pizza. As part of the Domino’s corporate culture, this commitment would be shared by all the franchisees. And the company anticipates that the franchisees will invest not only money, but time, energy and a sense of passion into the business. In UK, the franchise business of Domino is under the management of Domino’s Pizza Group (DPG), a public listed company which has a localized management team to offer close management service of the brand and also the system. With the strong support from the DPG, the Domino’s franchise business became a success since the mid 1990s when the DPG was acquired by Halpern brothers (Dominos.uk.com 2011).
1.3 Product details
Domino’s Pizza as a home-delivery brand Like many other leading brands,Domino’s Pizza came up with something new. The something new in this case was home-delivery pizza by offering a pizza delivery service. In 1967, Tom Monaghan introduced a 30 minute delivery pledge at a new store near the University of Michigan with 20,000 students on a single campus; his strategy and product positioning win a word of mouth rapidly. As now still stated in the official website, Domino’s exists to fulfill a basic need for the customers – to provide a high quality, freshly prepared, hot meal delivered on time, every time (Haig 2011, p.240).
2. Objectives of this report
The objectives of this report could be divided into four major parts with the overall target to provide suggestions on the strategic direction to Domino’s Pizza UK:
To provide a review about the background of Domino’s Pizza UK
To perform a comprehensive strategic situational analysis in term of macro and micro environmental check
To establish the strategic formulation in term of competitive positioning, growth strategy, resource based view and strategic methods selection
To provide guideline on the strategic implementation such as marketing strategy, action plan and budgeting (in Gantt chart), analysis of the change management issues and stakeholder management
3. Strategic situational analysis
3.1 Macro environment check – PESTEL analysis
PESTEL analysis which focuses on the analysis of the political, economic, socio-cultural, technological, environmental and legal factors provides a framework to analyze and categories external environmental influences in the environmental scanning component of strategic management (Coles & Porter 2008, p.143).
3.1.1 Political and legal analysis
Based on the view of Ellen R. Auster, Krista K. Wylie and Michael S. Valente (2005, p.22), political forces can refer to governmental regulations, political stability of governments and in a broader sense it can even include how activists and lobbyists might drive change in the organizations. In term of political stability, there are some negative factors in the recent time. In 2010, with the approaching of the election, While the opposition Conservatives were in pole position to take power with the possible backing of the Liberal Democrats, the third largest party, and at that time it was without a clear idea of who will form the next government, and as a result during last year, the sterling suffered great fluctuations as shown in the chart below. Stepping into the year 2011, the political instability seems to continue with major event such as the phone-hacking scandal (Theworld.org 2011). But despite the political instability still the UK government offers a competitive tax environment with lower corporate tax rates than many key competitors and one of the lowest personal tax rates in the EU which make it more attractive as a market.
Chart 1Pound sterling (GBP) exchange rate against Euro
Source: Ecb.int 2011
3.1.1 Economic analysis
Economics factors according to Mercedes Sobrino Salvá (2011, p.7) are about the macroeconomic factors such as exchange rates, trade cycles and disparity in economic growth rates among the countries. As illustrated below, after the global economy crisis the UK economy started to step out of most severe impact at the beginning of the 2010 but according to Bank of England governor Mervyn King and the most recent economic data Britain’s economic recovery will be much slower than previously expected and output is unlikely to return to pre-crisis levels for a “considerable period” (Guardian.co.uk 2011).
Figure 1 United Kingdom GDP Annual Growth Rate
Source: Tradingeconomics.com 2011
Figure 2 United Kingdom Interest Rate
Source: Tradingeconomics.com 2011
3.1.2 Social analysis
In term of the social and cultural factors, actually all over the world there has already been a trend of speeding up life pace. According to A secret analysis of pedestrians in more than 30 cities around the world, including London, Edinburgh and Cardiff, revealed that the average pedestrian now speeds along at almost 3.5mph (Dailymail.co.uk 2007). And reasonably, it is believed that the increasingly fast pace of life will drive up the need for fast and standardized food and punctual delivery service.
3.1.3 Technological analysis
There are three major trends in the technological field that has close relationship with . Firstly, There is a continual increase in broadcasting, information and telecommunications technologies for Internet access that strengthen the importance and popularity of the use of Internet service in term of online booking for food and Internet advertisements; secondly, with the widely usage of the mobile phone with Internet access, the mobile phone as platform for electronic commerce and as a way to pay would become more and more popularized and welcome; thirdly, another trend that is enhanced by the above two trends is the wide usage of social networking marked by the raise of Facebook and other social networking websites that provide platform for people to exchange their view on any topics.
3.1.4 Environmental analysis
Like many other European countries, there is an increasing awareness of environmental protection among the consumers in term of the preference of green food and being will to pay extra for products that are more environmentally friendly and request of recyclable packaging.
3.1.5 Summary of the PESTEL analysis
The economic recovery, technological and social progresses suggest that the fast food market in UK has a suitable macro environmental conditions thought there is some political instability. And as a developed economy, the legal system has been well developed and suitable for the majority of the common business activities. But still the micro environment check is needed in order to understand the attractiveness of the fast food market in UK in which the Domino’s Pizza in this study engages.
3.2 Micro environment check
3.3 Industrial analysis – Michael E. Porter (1979)’s Five Forces Analysis
Figure 3 Porter (1979)’s Five Forces framework
Source: Adapted from Hill & Jones 2008, Strategic Management Theory: An Integrated Approach, 9th edition, Mason: South-Western Cengage Learning
The fast food industry in UK like in many other developed markets is a mature and competitive market in term of a great number of the well established fast food providers in different products such as burgers and pizzas (McDonald, Ward & Smith 2007). Below we will look at the competitive level of the fast food industry in UK by analyzing the five forces in the market using the Porter (1979)’s Five Forces framework which is frequently used to describes the complexity and volatility of the competitive environment in which businesses operate (Blenkhorn 2005, p.27).
188.8.131.52 The risk of entry by potential competitors – High level
The risk of entry by potential competitors refers to the possibilities that substitutes to the products might be introduced, and the risk depends on the extent to which barriers to entry exist (Nelling 2011, p.129). Barriers to entry in the fast food industry in UK are few in numbers. Though the relative government departments may restrict the number of the new outlets of a particular type of fast food that may open, it is a rather limited barrier. There are several factors that contribute to the low level of barrier of entry. Firstly, it has been shown that as a mature market, the fast food restaurants that one will often find that potential customers are very keen to try new offerings (Chambers 2008, p.41); Secondly, the cost incurred to start a new business in the fast food industry is relatively low; Thirdly, though it may not be easy for a new beginning fast food firms to get into some of the prime high street location, they could start from streets that are farther from the central prime street locations to get established and what’s more it seems that the new competitors do not necessarily rely on the extensive marketing support. In conclusion, the risk of entry by potential competitors in UK fast food industry is at a high level because of the low level of barriers.
184.108.40.206 Rivalry among established firms – High level
Rivalry among established firms refers to the competitive struggle between companies in an industry to gain market share from each other (Hill & Jones 2009, p.57). The rivalry among the established companies in the fast food industry is intense. According a survey by market analyst the Local Research Company released in the end of 2009, the leisure sector on a whole has seen a closure rate of 10%, fast food restaurants in the UK’s top 10 cities have risen by 8.2% to more than 1,450, though Pizza chain Domino’s has increased its presence by a whopping 50%, the healthy fast food group Eat boosted its portfolio by 36.4% and sandwich chain Prêt A Manger by 29.7% and across all 705 UK town centers analyzed by the report, sandwich chain Subway grew the most, increasing its portfolio by 25.9% to 734 units (Caterersearch.com 2009, see also the appendix for the details of UK top 10 fast food cities).
220.127.116.11 The bargaining power of customers – Medium
Bargaining power of buyers refers to the ability of buyers to negotiate and create favorable terms for them. A particular industry becomes more attractive if its buyers have low bargaining power (Ungson & Wong 2008, p.66). Though the fact customers of the buyers are mostly individual customers whose personal choice would not bring too much influence to the business operations of the Domino’s Pizza, the bargaining power of the customers are medium due to the industrial rivalry is high and there are a number of fast food restaurants and alternatives available to the customers. If the customers do not like to choose Domino, they could also choose other restaurants such as Pizza Hut and also such bargaining power of the customers is enhanced by gathering of fast food restaurants in many of the uptown streets.
18.104.22.168 The bargaining power of the suppliers – Medium
Supplier power refers to the ability of a company to force suppliers to bear cost, that is, to pass along cost increases to the suppliers (Boyes 2011, p.113). The bargaining power of the suppliers for Domino’s Pizza UK is medium in the fast food industry in UK for two major reasons: on one hand with over 660 Domino’s Pizza stores in a growing number of towns and cities throughout England, Scotland, Wales and Ireland (Dominos.uk.com 2011), the large business scale of Donino’s Pizza UK will provide lucrative business opportunities to the suppliers and hence the bargaining power of the suppliers will be lowered; but the high quality requirement and uniqueness of the products and also a fixed product favor known by the customers will increase the suppliers’ bargaining power. For example, Domino’s tomato sauce is made in Portugal to the company its recipe. The tomatoes are picked and processed within six hours and just over two kilos of tomatoes will be used to produce one kilo of sauce that is good enough to use on the pizzas (Takeafreshlook.co.uk 2011). Such high quality requirement suggests that only few of the suppliers could meet such needs, and hence it means the bargaining power of the suppliers will be increased. Based on these two reasons we conclude that the The bargaining power of the suppliers is in a medium level.
22.214.171.124 The threat of substitutes – Low to Moderate
Threat of substitutes refers to other products in other industries that could be substituted for the fast food that the companies in the industry offer (Desmond 2004, p.33). Though the pizza that Domino’s Pizza offers has many substitutes such as burgers (McDonald’s) and fried chicken (KFC), we range the threat of the substitutes as low to moderate level for two reasons: on one hand, Domino’s Pizza offer not only pizza but pizza rapid delivery service which has fewer substitutes especially with the time constrain; and on the other hand the major product and service offered by domino’s Pizza UK as mentioned is provide a high quality, freshly prepared, hot meal delivered on time, every time, and such fresh and nutritious food delivery would also have fewer substitutes in particularly in the fast paced working and daily life of the UK residents.
3.3.2 Stakeholder analysis
A stakeholder is considered to be anyone who has an interest in the success of the (Nanda & Robinson 2011, p.388), stakeholder analysis is an approach used to identify and describe stakeholders based on their attributes, interrelationships, and their interests related to a given issue to a company (Chinyio 2010, p.122). Based on the definition and the case of Domino’s Pizza UK, there are several key stakeholders involved: the government, suppliers, customers, shareholders or owners, employees and local community. Below we will use the power/interest matrix which is a useful tool for evaluation the expectations and the impact of particular stakeholders.
Figure 4 The power/interest matrix
Source: Themanager.org 2011
The government could be divided into the high power / low interest category, as we known the government under many situations have high power or even absolute power over the business entities, if there should be any contradictions that the company engage in with the governments, it will receive relative penalties. And the shareholders or owners will have high power and also high interest on the business of Domino’s Pizza UK because they have invested their money on the company and also they have power to veto any decision or vote for any decisions that are critical to the company’s future development. And the employees have high interest and low power over the business while the local community will have low power but high interest on Domino’s Pizza UK business practice. Suppliers will have low interest but high power due to their medium bargaining power. And customers will have low interest and high power towards the business because to the company customer behaviors do influence the company’s decision making by making choices.
3.3.3 Vision and Mission statement
Mission in business refers to the reasons for an organization to exist. A mission statement according to Hess, Orthmann and LaDue (2011, p.67) is a written explanation of why an organization exist and identify the driving forces for the organization, and should provide instruments of organization communication with the ability to shape the attitudes and the behavior of individual in the organization and shape the perception of the public.
Domino’s Pizza’s vision illustrates a company of exceptional people on a mission to be the best pizza delivery company in the world. The business priorities of the company are to (Dominos.uk.com 2011) :
Recruit, recognize and retain the best people
Deliver consistently high quality food on time
Take great care of our customers
Innovate in ways that matter to our team members and customers
Ensure high image standards at our stores
Treat others how we’d like to be treated
Take time out to enjoy ourselves
3.3.4 Organizational culture – Teamwork orientation
As proposed by Tom Monaghan who change the name of the store to Domino’s Pizza in 1965 as the sole owner of the then struggling business, Domino’s Pizza starts with regular people and teaches then to be exceptional through teamwork and the vision of the firm (Lawfer 2004, p.192). With a franchise business, it is important to maintain and promote such teamwork orientation corporate culture due to the franchise business’ nature to have standardized products through standardized production procedures. And teamwork corporate culture is believed to able to help enforce and implement the production standards and SOPs (standard operational procedures) by eliminating the misunderstandings through communications. As mentioned in the company’s “Our Mission, Culture And Priorities” that the company will always deliver consistently high quality food on time and also innovate in such a way that matter to the customers. It can be concluded that since the establishment the Domino’s Pizza persistently put the interest of the customers in the first place.
3.3.5 Strategic orientations
4. Strategic formulation
4.1 Competitive positioning using Porter (1980)’s Generic Strategies
Figure 5 Porter (1980)’s Generic Strategies
Source: Tassiopoulos, D. 2008, New tourism ventures: an entrepreneurial and managerial approach. Cape Town: Juta & Co Ltd., p.239
Porter (1980)’s framework of generic strategies has been extensively used in studying the strategies of companies in both domestic and international operations. And in this model, Porter identified three generic strategies which are cost leadership, differentiation and focus strategies. And according to this framework, any company needs to locate its generic strategy among these three option or else it will not be able to occupy market competitiveness. For Domino’s Pizza UK, it has used and is recommended to continue to use the differentiation strategy rather than using cost leadership strategy or focus strategy. The fundamental reasons for this strategic choice are stated as following according to the two dimensions of the Porter (1980)’s Generic Strategies: Competitive advantage and Competitive scope.
4.1.1 Competitive advantage – Relatively higher cost and differentiation
In term of the competitive advantage a company needs to decide how its products become attractive to the customers, whether is low cost based or unique to the customers (differentiation). And in the case of Domino’s Pizza UK, since its establishment, as mentioned above Domino’s exists to fulfil a basic need for the customers – to provide a high quality, freshly prepared, hot meal delivered on time, every time (Haig 2011, p.240), and competitive price has not been concentrated though it is also important. Instead, the company has invested on the product research and development in term of inventing more taste of pizza that satisfies the customers’ needs by using fresh food materials to make the product fresher, more nutritious and healthier than that of the competitors. Hence, Domino’s Pizza UK could not use a low cost strategy as better products tend to come with higher costs. And differentiation would be a good choice.
4.1.2 Competitive scope – Broad
On the other hand, in term of competitive scope, like many other fast food providers Domino’s Pizza UK also has a broad market and customer base. This is decided by both the nature of the product and the history and culture of the company. Firstly, pizza as a food product is suitable to the majority of people irrespective of races, ages, gender and income differences. Secondly, since the establishment, Domino has been serving the local community by offering the products and services and thus the competitive scope would be broad.
4.2 Growth strategies – Ansoff (1957)’s matrix
Figure 6 Ansoff (1957)’s product-market growth matrix
Source: Adapted from Kumar, D. 2010, Enterprise Growth Strategy: Vision, Planning and Execution.Farnham Surrey: Gower Publishing Limited. p.175
The ‘Ansoff growth vector matrix’ developed by Ansoff (1957) is a simple matrix diagram outlining the possibilities for growth of any organization. The Ansoff matrix helps a company to define its overall strategic and vision for the future (McLean 1997, p.196). And in the case of Domino’s Pizza UK, it could use growth strategy of market development in UK to expand its business for the following two reasons: on one hand, in term of product though Domino’s Pizza UK could develop new product but as a franchise business with strictly implemented production procedure, the product development could be rather slow and also the existing products seem to be able to satisfying the old and new customers; on the other hand in term of market, Domino’s Pizza UK could expand its business by exploiting into the new markets. By continuing to expand the franchise business to increase the franchisee numbers, it is expected that the business of Domino’s Pizza UK will see a growth.
4.3 Resource based view: resources and competitive advantage
Figure 7 Resources and competitive advantage
Source: Marketingteacher.com 2010
Emerged as a reaction to the dominance of the “strategyas positioning” and developed rapidly to become a major influence on strategic thinking, RBV (Resource Based View) proponents emphasize that competitive advantage stems from the uniqueness of a company’s resource (Angwin, Cummings & Smith 2007, p.124). A core competence is something the organization does that underpins a source of competitive advantage (Perry 2009, p.9). The core competences give a business a competitive advantage in a number of markets, markets where customers perceive a benefit from the product. To formalizing the relationship between the competencies of Domino’s Pizza UK and the resource, below we will apply a model of resources and competitive advantage to check the company’s competitive advantage.
In term of the material resource, the most obvious material resource of such kind of resources is the food material provided by the contract suppliers who own the material of high quality. But this kind of resource will be easy for competitors to achieve. And also as mentioned above, this will increase the bargaining power of the suppliers. In term of the human resources, the company has a highly talented and well trained management and supporting in-store team under the Domino’s Pizza Group (DPG) which is known as a “master franchisee” to provide support and needed training services to the franchisee. This kind of human resource is not easy to be copied. And in term of the intangible resource, the company two major and fundamental intangible resource: customer oriented corporate culture and large business scale. On one hand, the company’s culture to put the customer interest in the first place and satisfy a basic need for the customers – to provide a high quality, freshly prepared, hot meal delivered on time, every time (Haig 2011, p.240), this uniqueness of the Domino’s Pizza culture is difficult to be copied; on the other hand the large business scale in term of over 660 Domino’s Pizza stores in a growing number of towns and cities throughout England, Scotland, Wales and Ireland (Dominos.uk.com 2011) is also very difficult for starters to follow. What’s more the brand value that the company has long been cultivated in the whole history of Domino’s Pizza has given the UK division a very quality intangible resource. But still the intangible assets which are difficult to be copied of Domino’s Pizza still need to be strengthened, as proposed by Duncan Angwin, Stephen Cummings and Chris Smith (2007, p.124), “Domino used to be good at making and delivering pizzas but no better than their opposition and hence low price is still the only viable strategy in the delivered pizza industry”, though this view has not been authenticated and confirmed by factual data, to some extent it reflects that the intangible resource owned by the company is not sufficient to enhance its core competitiveness.
4.4 Financial management
According to the most recent quarter three interim management statement for the 13 week period to 25 September 2011, System sales for the period were up by 9.8% to £127.0m (2010: £115.7m) with year to date system sales up by 9.2% to £385.4m (2010: £352.8m). Despite the challenging global economic conditions, like-for-like sales for the period continued to grow, increasing by 3.9% in 605 mature stores (2010: 9.9% in 553 mature stores). In the UK only, like-for-like sales for the period are up by 4.1% (2010: 11.5%), while the equivalent figure for the Republic of Ireland is 1.8% (2010: -4.7%) (Investorrelations.co.uk 2011) (see also the appendix 1 for further reference). From this report we can see that the financial performance of the company seems to be normal with overall good performance.
4.5 Strategic methods
In term of strategic method selection, as described previously the company has long engaging in the franchising business. According to Rupa Tiwari (2009, p.215), franchising is a method involving two parties: the franchiser and the franchisee. In return for gaining access to the brand attributes, image, marketing and other support from the franchiser, the franchisee usually takes a substantial portion of the financial risk and pay fees to the franchiser. And based on the view of Barry Berman, Joel R. Evans and Tom Mahaffey (2005), franchising appeals to franchisees for several reasons. Most franchisers have easy-to-learn, standardized operating methods that they have perfected. In the case of Domino’s Pizza UK, it has already built up a marketing, management and support team to attract, assist and well manage the franchising business. Based on the features of the franchising business, there are three key jobs for Domino’s Pizza UK to sustain its business growth: firstly, the company should focus on promoting the franchising business by attracting more franchisees; secondly, the company needs to continue to innovate its efforts in supporting the franchisees in term of provide more easy to learn training programs for the in-store employees, management team and the investors; thirdly, the company needs to continue to strengthen its brand value by investing on the product and service research and development to provide better customer experience to customers.
5. Strategic implementation
5.1 Marketing strategy implementation: Action plan and budgeting (in Gantt chart)
Activities Jan Feb Mar Apr
May Jun Jul Aug Sep Oct Nov Dec Budget
Advertisement &Promotion × × × × × × × × × × × × 4,600
Management training × × × × 400
Sale force training × × × 300
Distribution maintenance × × × 250
Customer survey × × × × × 500
R&D × × × × 3,000
In thousands (£)
Table 1 Marketing actions and budget Gantt chart for 2012
5.2 Analysis of the change management issues
With an expanding business plan to be implemented in the future few years, there is a series of expected changes to be implemented to the company, for example, the company could change its corporate culture by adding the value such operating efficiency to better support the expanding strategy in UK. But there could be resistances to changes which could be detrimental to the company’s change management. New and Couillard (1981) listed five key and usual reasons for the development of resistance in the change process:
Threat to self-interest
Inaccurate perceptions about the nature or implications of the change
Disagreements in the understanding of information related to the change
Psychological effect shown by a strong motivation to maintain a sense of autonomy
Feeling of alienation
In the case of Domino’s Pizza UK, not only the company should closely monitor these possible resistances to changes propose by the company epically when these resistances could not only be coming from the employees but also the franchisees.
6. Concluding remarks
With the analysis above, here we can draw some conclusion on Domino’s Pizza UK regarding its current strategic position and the implications to its future plans. Firstly, with the macro and micro environmental checks, we can see that UK has a suitable macro environmental conditions thought there is some political instability. And as a developed economy, the legal system has been well developed and suitable for the majority of the common business activities. But the industrial competitiveness which is in a high level (The risk of entry by potential competitors – High level, Rivalry among established firms – High level, The bargaining power of customers – Medium and The bargaining power of the suppliers – Medium) has brought substantial pressure for the company to operate in the fast food industry; secondly, in term of strategic formulation it is concluded that the company has used and is recommended to continue to use the differentiation strategy rather than using cost leadership strategy or focus strategy; though product differentiation is recommended but the growth mode advised to the company in the future would still be the market development using the franchising business. And to enhance the core competitiveness of the business, methods had been mentioned to increase intangible assets of the company which are difficult to be copied. And in term of the implementation stage, the company should have a detail action plan for the future as well as maintaining the monitoring efforts to check the possible resistances to the changes needed by the company in the future.
Appendix 1.0 Financial performance of Domino’s Pizza UK
Appendix 2.0 Summary of industrial analysis using five forces model
Force Level of competition
The risk of entry by potential competitors High level
Rivalry among established firms High level
The bargaining power of customers Medium
The bargaining power of the suppliers Medium
The threat of substitutes Low to moderate
Appendix 3.0 Macro Environmental Analysis
Political & Legal
Lower corporate tax rates
One of the lowest personal tax rates in the EU Major political instability events such as the phone-hacking scandal
Fluctuations of currency
Well established economic order
Economic recovery is much slower than previously expected
Speeding up life pace
Increasing preference of standardized food Demanding on faster and more punctual delivery
Mobile phone as platform for electronic commerce
Online social networking
Customer’s willingness to pay extra for products that are more environmentally friendly Increasing awareness of environmental protection
Appendix 4.0 Porter (1979)’s Five Forces framework
Appendix 5.0 Porter (1980)’s Generic Strategies
Appendix 6.0 Ansoff (1957)’s product-market growth matrix
Appendix 7.0 Resource based view
Appendix 8.0 The power/interest matrix
Appendix 9.0 UK top 10 fast food cities
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