Domino’s Pizza Inc (“Domino’s Pizza”) aims to be the premier pizza delivery operator in the world, offering customers unique and high quality pizza and related food products quickly and efficiently through its home delivery service.
Domino’s pizza traces its roots back to 1960, when Tom Monaghan (“Monaghan”) and his brother James took over a small pizza restaurant in Ypsilanti, Michigan that had been part of the DomiNick chain.
The brothers paid a USD 500 and borrowed a further USD 900 to complete the acquisition. The business saw some success in its early years, enabling Monaghan, who took over his brother’s share of the business, to open a further two outlets by 1965.
Monaghan brought the restaurants together under the name Domino’s , having been forbidden from using the DomiNick’s brand.
Domino’s Pizza opened its first franchise location in 1967 and by 1978, the Company had expanded to 200 stores.
The Company opened its first international location in 1983, launching a store in Winnipeg, Manitoba. This was followed by expansion into the UK and Japan in 1985, and into the Dominican Republic in 1993.
In 1998, after 38 years of ownership, Domino’s founder Monaghan announced his retirement, and sold 93 percent of the Company to 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.
It currently operates more than 16,000 locations cross 85 markets in the Americas, Asia Pacific, Europe, the Middle East, and Africa. The Company has a current market capitalisation of around USD 11.73 billion.
Business model of Domino’s Pizza
Domino’s Pizza serves a broad and diverse customer base across the general consumer population.
The Company primarily targets customers in the following categories:
- Younger Consumers, primarily comprising consumers aged between 18 and 35 who make a large proportion of the Company’s customer base;
- Working Professionals, comprising busy working professionals, working couples, and young families who frequently require food options that require little effort and that are time efficient; and
- Event Organisers, comprising customers who are involved in organising either corporate or private events, such as birthday parties.
Domino’s Pizza also employs marketing campaigns that target sports fans, offering deals and discounts that coincide with major sporting events around the world.
Domino’s Pizza is headquartered in the US, which remains its principal market. The Company, however, also serves customers across 85 markets spanning the Americas, Asia Pacific, Europe, the Middle East, and Africa.
Domino’s Pizza provides value to its customers in the following ways:
- Brand Strength and Reputation – Domino’s Pizza is one of the largest and most well-known pizza chains in the world and the leading pizza delivery provider in the US, with a reputation for offering its customers high quality products quickly and efficiently;
- International Reach – Domino’s Pizza has an extensive international sales reach, comprising more than 16,000 outlets across 85 markets spanning the Americas, Asia Pacific, Europe, the Middle East, and Africa;
- Ease and Accessibility – Domino’s Pizza offers customers a simple and accessible way to order pizza and schedule deliveries in its stores, over the phone, online, or via the Company’s mobile app, ensuring that customers can place orders from anywhere and at any time;
- Supply Chain Efficiency – Domino’s Pizza implements a vertically integrated dough manufacturing and supply chain system that ensure the quality, consistency, and efficiency of its franchise operations around the world; and
- Innovation – Domino’s Pizza is dedicated to developing new and innovative recipes and toppings for its pizzas, as well as innovative technological systems for its sales and service channels, ensuring that it remains at the cutting edge of its industry.
Domino’s Pizza primarily serves its customers via its network of more than 16,000 owned and franchised restaurants around the world.
This network spans markets across the Americas, Asia Pacific, Europe, the Middle East, and Africa. The Company’s restaurants are staffed by sales and service personnel who serve customers directly.
Domino’s Pizza also offers products to customers on a self-service basis through its regional online ordering portals.
Through these channels, customers are able to browse products, place orders, and schedule deliveries online.
Customers are also able to place orders for delivery or collection from the Company’s outlets in-store and over the phone. Domino’s Pizza completes deliveries through its own team of delivery drivers.
Domino’s Pizza’s sales operation is supported by its own manufacturing and distribution infrastructure, comprising dough production facilities, supply chain centres, and store facilities.
Domino’s Pizza seeks to secure recurring business from its customers by providing high quality products and efficient service.
The Company’s principal point of contact for its customers is its in-restaurant personnel, who are on hand to take orders, respond to queries and complaints, and offer advice on menu items. The Company’s sales personnel also deal with customer orders, queries, and complaints over the phone.
Domino’s Pizza operates a membership and rewards program for its regular guests as a means of encouraging repeat business, through which customers can access deals, discounts, and special promotions.
The Company also offers a range of information to customers through its website at www.dominos.com, including store locations and menu items, which can be accessed on a self-service basis. The Company is additionally able to communicate directly with its customers through its various social media accounts, including with Facebook, Twitter, Instagram, and YouTube.
Domino’s Pizza operates as a pizza restaurant chain company.
The Company operates a network of more than 16,000 store locations across 85 international markets spanning the Americas, Asia Pacific, Europe, the Middle East, and Africa. Domino’s Pizza organises its operations into three business segments: Domestic Stores, comprising its store operations in the US; International Franchise, comprising its international franchise activities; and Supply Chain, comprising the operation of its regional dough manufacturing and food supply chain centres.
The Company offers a wide selection of products across its restaurants, including pizzas, side dishes, salads, appetisers, and drinks.
Domino’s Pizza works with a wide network of partner companies around the world.
These partners can be organised broadly into the following categories:
- Supplier and Vendor Partners, comprising suppliers of ingredients and equipment used in the Company’s pizza and dough preparation operations, as well as third party providers of services that support the Company’s corporate activities;
- Franchise Partners, comprising a range of foodservice operators, individual business professionals, and other commercial enterprises that operate pizza delivery outlets on behalf of and in partnership with Domino’s Pizza;
- Marketing and Sponsorship Partners, comprising various brands, commercial enterprises, and organisations with which the Company collaborates on marketing and sponsorship programs;
- Community and Social Partners, comprising various non-profits and charitable organisations with which the Company collaborates on social and community projects across its operating markets, primarily in the US; and
- Strategic Partners, comprising various other companies and organisation with which the Company works on other business development projects.
Domino’s Pizza has a number of partnerships in place. This includes tie-ups with brands such as Schweppes, Primo, Tibaldi, Kagome, and Visy, as well as partnerships with SingularityNET, CP+B, and Deliver Media.
Domino’s Pizza’s business model depends on its ability to serve customers with high-quality products quickly and efficiently.
As such, its key resources are its network of restaurants and franchised outlets, its manufacturing and supply infrastructure, its fleet of delivery vehicles and drivers, its kitchen equipment and tools, its network of partners, its brand and intellectual properties, and its personnel.
Domino’s Pizza notably owns and or leases a number of restaurant locations around the world, as well as five supply chain centre buildings and two store buildings in the US.
The Company also owns several trade and service marks, notably the Domino’s Pizza brand.
Domino’s Pizza incurs costs in relation to the procurement of ingredients and supplies, the procurement of third party services, the operation of its delivery fleet – including fuel and maintenance cost, the payment of franchise-related fees, the operation of its manufacturing and supply infrastructure, the operation of its physical properties – including occupancy and utility costs, the management of its partnerships, the implementation of marketing and advertising campaigns, and the payment of salaries and benefits to its personnel.
In 2018, Domino’s Pizza recorded total cost of sales of USD 2.13 billion, general and administrative expenses totaling USD 372.5 million, and US franchise advertising costs in the amount of USD 358.5 million.
Domino’s Pizza generates revenue through the operation of pizza outlets across the US and internationally.
The Company derives its revenue in the form of sales fees collected from customers at point of sale, including at its restaurants and via its online sales channels, as well as through the collection of franchise royalties and fees from its franchisees.
In 2018, Domino’s Pizza recorded total revenue of USD 3.43 billion, up from the USD 2.79 billion recorded by the Company in 2017.