Mixed Fortunes at Domino’s: Management Case Study- Report Writing Assignment

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Internal Code: TV454
Report Writing Assignment:

Task:

Case Study

Domino’s is an Australian pizza chain with a network of franchises and over 600 retail stores nationally. It has been hailed as a success story since it was listed on the Australian Stock Exchange in 2005. In just over a decade, Domino’s shares have surged more than 2500 per cent, making it one of the best performers on the market and making a lot of people wealthy. In 2016 the company generated total revenue of $939,976,000.

Background of Domino’s
Domino’s has the world’s biggest pizza menu with more than 200,000 options, helping boost Domino’s sales to more than 90 million pizzas annually with a guarantee to deliver pizza within 15 or 20 minutes for an extra cost. Domino’s business model is based on franchisees growing sales, not profit, with head office taking a royalty from every sale as Australians chomp through 1 million of its pizzas every week. Stores are bought and sold on a multiple of these sales, not on profit. The more stores in the network, means more sales are generated, which results in more profits for head office.

While the business is built on selling affordable pizza to the masses, with Group Chief Executive Officer (CEO) & Managing Director Don Meij Domino’s has transformed into one of Australia’s most intriguing tech companies with operations in New Zealand and Europe. Drones, cutting-edge IT, fast pizzas, happy franchisees and happy workers are all part of the Domino’s image. CEO Meij “lives the job” often working undercover in the stores to keep abreast of activities at the store level. To help managers keep track of their best and worst performers, Domino’s rolled out a new in-store computer system. The screens, which everyone in the store can see, constantly update statistics such as the average order size for each employee and how long it’s taking to get a pizza out the door. Store managers get a
quarterly bonus based on how much they improve store earnings.

Domino’s selects its franchisees carefully, those who genuinely believe Domino’s is a highly profitable business. However, when the store is not profitable franchisees are held to blame for bad business management. The stress of making ends meet took its toll on many franchisees who realised the business they had bought into was not viable, due to the company policies, especially on labour costs and a perception that the head office was only concerned about the welfare of people at the corporate level. Whilst Domino’s profit is doubling the cost of pizzas is getting cheaper due to high competition in the fast-food sector.

However, this cheap cost of pizza is borne by the franchisees who are struggling to make a decent profit due to them not being able to pass on the increasing high costs of running the stores.

Recquired:

1. Identify the major issues/problem and what caused it
2. Identify the minor issue/problem affecting Dominos and what caused it
3. Discuss the issues/problem using course notes and other information found from reading scholarly articles
4. Find solutions to the problems using information found from scholarly articles
5. Recommend the best solution to solve the major problem that has been identified earlier

Uploaded By : jack
Posted on : February 15th, 2018
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